I worked at a bank prior to attending law school. Working at a financial institution opened my eyes to some common misconceptions that exist about where someone’s money actually goes after he or she passes away. I read an online article recently, by Miranda Marquit, and it does a very good job explaining the various parties that can receive a piece of someone’s inheritance when they die. I’d like to highlight three of the parties she discusses:

• Spouses – One of the misconceptions I heard when I worked at the bank, and it still exists amongst clients I meet with, is that a surviving spouse will receive the deceased spouse’s assets upon his or her death. While there are some statutory protections for surviving spouses, assets can pass to unintended beneficiaries depending on how the assets where titled, or held, at the time of the death. An example would be if you own assets as joint tenants with right of survivorship with a business partner and you pass away expecting that your share of those assets will pass to your surviving spouse. Unfortunately, you would be mistaken. Those assets now fully belong to the business partner, even if your Will states otherwise.
• Children – Believe it or not, we would typically find out about the death of a client at the bank when their children would come into the branch to attempt to collect the proceeds of their deceased parent’s account(s). They just assumed that since their parent(s) had passed and they were the children that they should be able to collect what their parents left behind. Little did the children know that if their parents did not name beneficiaries on the account(s), or did not own the account(s) in the name of a trust, that the children typically had to proceed with the probate process and may not even see the proceeds for months or even years until the probate process was completed. Most children are not expecting this.
• Named Beneficiaries – The last misconception is if you divorce but still have your ex-husband/wife listed as the beneficiary of your life insurance policy or retirement account and then you die, that the money will now go to your children instead. This is wrong, and your ex-spouse will be entitled to the proceeds instead of your children. Typically, account ownership and beneficiary updating occurs during a divorce, but the lesson is to make sure your named beneficiaries match the person you want to receive the funds. This can’t be changed after death.

If you have questions about how to structure your assets to achieve the results that you desire for you and your family, please call us today to schedule a free consultation with one of our attorneys.

Morris Hall Can Protect You in Today’s Litigious Society:
We live in a litigious society, where over 1 million lawsuits are filed every year in America alone.  Financial predators are looking for ways to take funds from others and often use litigation as their means to do so.  At Morris Hall we provide your assets and your loved ones with important protections that can prevent financial predators from taking advantage of you.  We do this through proper and current estate planning techniques.  With an MH living trust, we can also protect your property, assets and loved ones from probate, estate taxes, gift taxes, creditors, Medicaid spend-down, conservatorship or guardianship proceedings, ex-spouses and more.  A living trust also keeps your asset and beneficiary information private and secure to avoid giving financial predators information to use against you and your family.  Without a living trust, this information will be made public.  For those living in Arizona, we serve the areas of Phoenix, Mesa, Gilbert, Fountain Hills, Scottsdale, Cave Creek, Prescott, Flagstaff, Sedona, Tucson, Sonoita, Arrowhead, Avondale, Goodyear and Tempe.  In New Mexico we serve the areas of Albuquerque, Santa Fe, Las Cruces, Rio Rancho, White Rock, Alamogordo, Truth or Consequences and more.  Contact us today at 888.222.1328 to schedule an appointment with an attorney in your area!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.