First, you should know that I don’t suffer from triskaidekaphobia (fear of Friday the 13th).  But, today’s post covers an issue that many of you may come to fear, should you not heed the warnings herein.

Over my life, I have bought life insurance plans.  The first one I bought was when I was a teenager, buying a small plan from Security Mutual Life.  When I was at MIT, I bought a more lucrative plan from John Hancock. While working for a firm, I was awarded a whole life insurance plan.   All of those were in my possession before I turned 30.  (I have purchased more plans since then.  Admittedly, about ½ are term policies (that pay enough dividends to cover current premiums about 4 or 5 years out of 7,  only three of my plans are whole life.)

I also have an up-to-date Medical Directives plan, a living will, and a last will and testament.  And, I can bet if you have such documents, you make sure that your beneficiaries are clearly listed in those latter documents.  But, what I will also bet you?   That the beneficiaries for your life insurance policies, your retirement accounts, your stock and bank accounts, are all a mess.

Having been married twice, I know that clearly reviewing and listing the desired beneficiary is critical.  Many of my clients find that the policies their spouse left them often do NOT include them as beneficiary, instead a prior spouse is listed to garner the benefits of the policy.  Or that children from a second marriaage0 (which were not the intended recipients of largess [NOTE: some are and do deserve such largesse; I am not making a value judgment.]) are also listed.(

Too many folks think that their will is the ultimate word on who gets what when they die.   Um… Nope!

Your retirement document beneficiaries will be those listed with the plan- not the ones you thought you named in your will.  The same applies for the bank and brokerage accounts, as well as your life insurance plans.

If you don’t keep those up to date, then someone is going to have a battle royale to prove that they really are the beneficiary.  (To be honest, they are not likely to prevail in such an action.)

Now, there is some relief.  If you have a 401(k) retirement plan, the spouse to whom you are married when you open the plan is automatically entitled to those funds, unless and until they have formally waived it.  (That waiver must be a notarized document.)   And, if you have no listed beneficiary and no spouse, then the plan documents will determine who is the beneficiary.

(Note that IRA’s let one name anyone a beneficiary- no waiver from spouses required.  Unless, of course, you live in California or Texas, or other community property states.  There a waiver is required.)

By the way, I really solved this problem long ago.  I set up two trusts- one is the Ackerman Children Trust and the other is a more wide-spread one.   I list the beneficiaries of my accounts as either the Ackerman Children Trust (which documents that each of my children is entitled to a per stirpes portion of the account), which the more wide range trust lists folks like close friends, relatives, and my children as participants.  I only have to update those two documents to ensure that my last wishes will always be met.

You might want to consider such an option for yourself.

Happy Friday the 13th!   Triskadekaphobia to the winds!

 

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I recommend you obtain a copy of “One Bold Move a Day”, written by Shanna Hocking.  The book shares hard-won advice and insights gleaned from 20 years as a successful manager of large teams.  Shanna helps you choose concepts and methods to reach your goals every day of your personal life.  And, the key point- the time to start is now!

Among suggestions in the book is seeking out a mentor, even a personal board of advisors,   as well as these other recommendations- stop relying on external validation, stop trying to prove yourself, there is no such thing as perfect or a perfect time, celebrate the progress you make each and every day, and practicing gratitude.

I am asking you- my loyal readers- to provide me a short blurb of what you are doing to make yourself better each day, how you are helping to remove the bias against women and minorities in STEM and management, and the like.  (Use this form, please.) I will choose among those items submitted between today and the 1rst of November and provide you a copy of Shanna’s book, One Bold Move a Day.

Good luck!