Their father died suddenly, leaving behind two sons. He rented an apartment in San Diego while his Sons lived in Los Angeles and San Francisco, requiring his Sons to make multiple trips down the coast to manage his estate. The father’s affairs were one challenge after another. Among other problems, the landlord refused access to the apartment; the neighbor had “helped himself” to important documents and valuables; his car had been impounded; and the apartment appeared as if it had been hit by a typhoon. But the Sons were determined to organize Decedent’s affairs and settle his estate. The Sons had to meet with the landlord, clean and surrender the apartment, handle and pay for funeral arrangements, dispose of personal effects, settle debts and negotiate with his creditors. After several trips over many months, the Sons finally accomplished what their father could not.
As they neared the end, the Sons discovered that their father had one liquid asset: an investment account with a total value of about $100,000. The math appeared easy: the Sons would pay his debts (about $40,000) and then split the remainder of the financial account. The Sons could use the money to reimburse their costs including travel, paying cleaning crews, etc. They could also use the moneys to establish college funds for their children, Decedent’s grandchildren. The Sons contacted the financial institutions only to be given the news: the Account had a beneficiary designation but it was not either of them. So, who was it? Who received their father’s only material financial asset?
Time would reveal that through the use of a #BeneficiaryDesignation, the Account had been bequeathed to their father’s girlfriend. A girlfriend that their father had not seen or had any contact with for more than 17 years!
What to do? The Sons reached out to the girlfriend and advised her that the estate was bankrupt. They told her that the Account had their father’s only assets. Would she help them? Would she share? The girlfriend’s first response was:
“Your father always wanted me to have that money.”
Did the father want her to have it more than his children? Or grandchildren? Or creditors? Unfortunately, the law presumes she is correct because for two decades, Decedent never updated his beneficiary designation on the Account. Without clear and convincing evidence that this was a mistake, it was unlikely that the #ProbateCourt would ever change it.
When was the last time you reviewed the beneficiary designations on your investment accounts? Please do not leave your loved ones holding the bag.
Cesar has received his Masters of Science in Integrated Design, Business and Technology from the University of Southern California.
- Protecting Your Digital Assets: What Happens to Your Online Accounts After You Pass Away? - March 23, 2023
- Peace of Mind in Contentious Probates: Why a Professional Fiduciary is Essential - March 20, 2023
- Expertise, Objectivity, and Efficiency: Why Single Individuals Need a Professional Fiduciary in their Estate Plan - March 18, 2023
