Mattson Financial Blog

Are Your Accounts Really Up to Date? What You Need to Do for Your Heirs

Do things really happen in threes?

This was a question we asked ourselves earlier this year. We were surprised, shocked, and saddened when we learned of the passing of three clients. We thought, “Okay, it’s done. These things happen in threes.”

Then we learned three more clients had passed away, bringing us to a total of six clients who are no longer with us in 2020. Our thoughts have been with the families of these clients.

Through this trial of loss, we — and the families of our now-passed clients — learned some valuable lessons. These are lessons we want to share with you.

Sometimes, clients come to us with work still yet to be done on their accounts and their estates. Then, the time comes for them to go home and their account changes do not happen. Or they may think everything is in order, only for the heirs and beneficiaries to discover that isn’t the case.

As an estate is divided, some beneficiaries may end up on the hook for a huge tax burden, while others may be uncertain about what taxes they will owe.

Then there are the promises made by family members (estate owners) to other family members (heirs) that they will receive certain assets after the estate owners’ passing. Promises, however, don’t always reflect reality.

We have had this happen with clients. Their intentions were in the right place when they made promises to their loved ones, but when we started work on their accounts and we went through our process to make sure their financial assets lined up with the client’s wishes, things didn’t always line up.

Unfortunately, when a client passed away recently, family members who thought they were going to receive certain assets did not. Instead, the assets went to another family member’s estate — a family member who had previously passed away.

What’s even more unfortunate about this is that these assets are going outside of the family bloodline, which wasn’t the intention of the original estate owner. Why did this happen?

It turned out that their estate and accounts were not completely up to date. While their will reflected their wishes accurately, the beneficiary listed on the account itself had not been updated. It still had the name of a since-passed family member.

This is why you need to revisit your beneficiaries listed on all your accounts. If the name or names are different than what’s listed in your will, it overrides your will or trust intentions. It will go to the person named on the account.

The good news is that it will bypass probate, but your family may be left confused and without the assets they thought they would receive.

This is also why it is imperative for us to have all the proper information so we can make these kinds of updates across the board. We need to have every detail to make sure accounts match up with your will to ensure your assets go to exactly who you intend.

But on top of that, you want to ensure you aren’t passing on major tax implications to your beneficiaries. This can take some strategizing, but it’s possible.

While this is tier one of our planning principles, sometimes not all assets are under our control, and as a result, the unfortunate takes place, as it did for our client.

Don’t let this happen to you and your family. Call our office for an asset review for your beneficiaries. We will walk you through everything you have and make sure everything is as you intend it.

Just remember one thing: You can’t promise all seven grandchildren your classic 1960 Cadillac Eldorado.

-Gary Mattson