Whenever that time comes, what do you want to leave that will remain?
Most of us want to leave something to be remembered by, some type of enduring impact on our loved ones, our community and the world we know. It’s not only gifting money, heirlooms or possessions, but also knowledge, values, traditions and experiences.
Time slips away, you avoid the thought of it or the unexpected happens. And instead of a gift, you leave a disarray of convoluted accounts, usernames and passwords that no one knows about or how to access. The distribution of your property, assets, belongings (estate) end up being decided by a judge in probate court.
I learned about probate court before we moved to California. The estate attorney who drafted our wills told us that probate court in CA was “hell.” To avoid this, we set-up a trust for our assets including our house. At the time, California law allowed up to $100,000 including property to be held outside of a trust, will or beneficiary designation. Anything beyond that amount, the estate is sent to probate court. Each state has different regulations and thresholds.
Not all investment accounts allow beneficiaries to be named, especially the new ones like Robinhood, WeBull or even Bitcoin. WeBull recently sent me a notice on the availability of beneficiary designation. Bank accounts do with a Payable on Death (POD) form that I only recently learned about.
It wasn’t until I was the ghost executor of an estate that I understood how the distribution of an estate actually works. It’s a lot of work even with a current will, trust and everything in order. These documents don’t list each of your accounts or property unless specifically notated. I had to piece everything together into a list from each separate document that she had, bank statements, IRA, annuity, life insurance, because each were held at different financial institutions.
None of the accounts had online access. I dealt with phone calls, paper forms, sending paper documents via UPS, FedEx and the USPS but ALWAYS with a tracking number. Anything I sent without one usually had to be redone and resent with a tracking number so it wouldn’t get lost.
We are embarking on an era of transition where the paper process is replaced with a digital one. Financial institutions and estate attorneys have already started with video conferencing, tools like Docusign, secure portals and e-mails and assistance navigating the ones who are behind.
My father-in-law was the named executor. The local bank wanted him to drive 6 hours to sign a form surrendering all legal recourse, give them the safety deposit key and then drive 6 hours back. The estate attorney helped me get them to realize how absurd this was. They conceded and were able to overnight documents to him to execute in front of a notary to prove his identity. He then could overnight the executed documents and key back to them.
Estate attorneys don’t want your account lists of logins and passwords. Whoever you have named as the executor better know your method whether that is a digital password manager or physical password book. My husband and I have set-up password books for our parents since some passwords change often and others we keep in our digital password manager. If it’s all in your head, realize that you will be leaving hell for your spouse or kids to sort through.
The days of simple estates are waning. Our lives have become more complex. We live longer, staying in our homes longer and may never get to the point of enjoying the simplicity of life once again, never reaching that final pinnacle. It’s another aspect of our private financial lives that we rarely think or talk about. For something that is inevitable, is the legacy that you hope for attainable? If you don’t know or the answer is not yet, then you have work to do.
The 1 Thing I Wish Did With My Father Before He Died
Estate Planning Learning Center | Trust & Will
Featured Image – my FIL has made and gifted us stained glass replicas of all 4 houses we have owned.
There is a reason why I didn’t post this for the past weekend. I apologize. Stay tuned this weekend and you’ll find out why.