Payable On Death Account to Complement Will

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Leesbro63
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Payable On Death Account to Complement Will

Post by Leesbro63 » Tue May 21, 2019 10:31 am

I have a close friend who has a fairly simple estate planning situation, I think. He's single and does not intend to get married, is in his late 50s and has fair health. He will have two heirs (his niece and nephew...both post-college young adults). He has no children of his own. He will retire soon with no business interests. The lion's share of his nest egg is in a taxable Vanguard account. I've suggested that he make the Vanguard account as a "Payable On Death" account, with the niece and nephew as beneficiaries, to simplify his situation. He wishes them to receive his assets, upon his death, outright, with no restrictions.

His question to me was a good one that I'm having trouble answering: "What's the downside?" And "If this is so good, why aren't many more people doing it".

I'm wondering what the responses here will be.

EDIT: I just went through the process on the Vanguard site. It seems that they ask for a "Primary" and "Secondary" beneficiary, but ask for percentages. How do I set this up for two primary beneficiaries, each getting 50%? Since I was just playing around on my own account to see how this works, I did not click the final "CONFIRM" button. Once that's done, is the Vanguard system smart enough to know that a 50% primary and 50% secondary is 50/50 to each?
Last edited by Leesbro63 on Thu May 23, 2019 2:54 pm, edited 3 times in total.

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dm200
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Re: Payable On Death Account as Will Substitute

Post by dm200 » Tue May 21, 2019 10:37 am

Leesbro63 wrote:
Tue May 21, 2019 10:31 am
I have a close friend who has a fairly simple estate planning situation, I think. He's single and does not intend to get married, is in his late 50s and has fair health. He will have two heirs (his niece and nephew...both post-college young adults). He has no children of his own. He will retire soon with no business interests. The lion's share of his nest egg is in a taxable Vanguard account. I've suggested that he make the Vanguard account as a "Payable On Death" account, with the niece and nephew as beneficiaries, to simplify his situation. He wishes them to receive his assets, upon his death, outright, with no restrictions.

His question to me was a good one that I'm having trouble answering: "What's the downside?" And "If this is so good, why aren't many more people doing it".

I'm wondering what the responses here will be.
My opinion is that he have a will that can provide for multiple possible scenarios, that cannot be dealt with using POD.

One, or both, of the intended beneficiaries may pre-decease him - and their might be child(ren). Wouldn't he want a share to go to those children? Or, perhaps to the surviving spouse.

I do not believe such a will would cost that much to do.

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Re: Payable On Death Account as Will Substitute

Post by sailaway » Tue May 21, 2019 10:46 am

The downside is that most people have some assets outside of POD accounts.

We currently have each other listed as primary beneficiaries and our respective mothers as secondary beneficiaries. However, it is also possible to have your beneficiaries listed as a percentage (in OPs case 50/50) per stirpes, which means if the beneficiary has passed, their children will get it.

In our case, our heirs will have no legal right to our personal belongings until/unless they go through probate, and then it will be according to state laws, and so may be our siblings, rather than our parents.

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Re: Payable On Death Account as Will Substitute

Post by mptfan » Tue May 21, 2019 10:48 am

Leesbro63 wrote:
Tue May 21, 2019 10:31 am
His question to me was a good one that I'm having trouble answering: "What's the downside?" And "If this is so good, why aren't many more people doing it".
There is no downside, he would be foolish not to do it, and he should do that regardless of whether he has a will. And how does he know that more people aren't doing it?

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Re: Payable On Death Account as Will Substitute

Post by bsteiner » Tue May 21, 2019 11:03 am

It's penny wise and pound foolish. Some possible downsides are:

1. If one of them doesn't want to contribute to the debts, taxes or expenses, it may be difficult and expensive to sort it out.

2. It may be harder to get his final tax returns filed. If there are refunds, how will they be deposited? A bank might not accept tax refund checks for deposit other than to an account in the name of the decedent's estate.

3. It may make it harder to provide for contingencies. What if one of them dies first?

4. He may think he wants to provide for them outright, but a lawyer would point out that if he provides for them in trust rather than outright it would keep their inheritances out of their estates, and it would protect against their creditors and spouses, and Medicaid. It's easier to do this in a Will.

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RickBoglehead
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Re: Payable On Death Account as Will Substitute

Post by RickBoglehead » Tue May 21, 2019 11:07 am

Leesbro63 wrote:
Tue May 21, 2019 10:31 am
I have a close friend who has a fairly simple estate planning situation, I think. He's single and does not intend to get married, is in his late 50s and has fair health. He will have two heirs (his niece and nephew...both post-college young adults). He has no children of his own. He will retire soon with no business interests. The lion's share of his nest egg is in a taxable Vanguard account. I've suggested that he make the Vanguard account as a "Payable On Death" account, with the niece and nephew as beneficiaries, to simplify his situation. He wishes them to receive his assets, upon his death, outright, with no restrictions.

His question to me was a good one that I'm having trouble answering: "What's the downside?" And "If this is so good, why aren't many more people doing it".

I'm wondering what the responses here will be.

EDIT: I just went through the process on the Vanguard site. It seems that they ask for a "Primary" and "Secondary" beneficiary, but ask for percentages. How do I set this up for two primary beneficiaries, each getting 50%? Since I was just playing around on my own account to see how this works, I did not click the final "CONFIRM" button. Once that's done, is the Vanguard system smart enough to know that a 50% primary and 50% secondary is 50/50 to each?
Primary comes before secondary. So, if a primary beneficiary is alive, they get it all. Period.

Sounds like he would want two primary beneficiaries, each getting 50%. Then, he sets up secondary beneficiaries if one or both of the primary beneficiaries are deceased.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

increment
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Re: Payable On Death Account as Will Substitute

Post by increment » Tue May 21, 2019 11:08 am

If he later wants to write a will, the POD designation is not autorevoked. It takes precedence over any will.

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Leesbro63
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Re: Payable On Death Account as Will Substitute

Post by Leesbro63 » Tue May 21, 2019 11:12 am

RickBoglehead wrote:
Tue May 21, 2019 11:07 am
Leesbro63 wrote:
Tue May 21, 2019 10:31 am
I have a close friend who has a fairly simple estate planning situation, I think. He's single and does not intend to get married, is in his late 50s and has fair health. He will have two heirs (his niece and nephew...both post-college young adults). He has no children of his own. He will retire soon with no business interests. The lion's share of his nest egg is in a taxable Vanguard account. I've suggested that he make the Vanguard account as a "Payable On Death" account, with the niece and nephew as beneficiaries, to simplify his situation. He wishes them to receive his assets, upon his death, outright, with no restrictions.

His question to me was a good one that I'm having trouble answering: "What's the downside?" And "If this is so good, why aren't many more people doing it".

I'm wondering what the responses here will be.

EDIT: I just went through the process on the Vanguard site. It seems that they ask for a "Primary" and "Secondary" beneficiary, but ask for percentages. How do I set this up for two primary beneficiaries, each getting 50%? Since I was just playing around on my own account to see how this works, I did not click the final "CONFIRM" button. Once that's done, is the Vanguard system smart enough to know that a 50% primary and 50% secondary is 50/50 to each?
Primary comes before secondary. So, if a primary beneficiary is alive, they get it all. Period.

Sounds like he would want two primary beneficiaries, each getting 50%. Then, he sets up secondary beneficiaries if one or both of the primary beneficiaries are deceased.
I understand that. But the Vanguard site set up for beneficiaries, for taxable accounts, gives you a single option for a Primary beneficiary. Then it asks the percent for that single beneficiary. I am guessing that once it's submitted, another screen will come up asking for a second primary beneficiary, for the remaining percentage. But it's not clear this is the case. In other words, it seems that the Vanguard site makes a provision for more than one primary beneficiary, because it allows percentages, but there is no input for the second primary beneficiary on the main input screen.

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Mlm
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Re: Payable On Death Account as Will Substitute

Post by Mlm » Tue May 21, 2019 11:21 am

I have two primary beneficiaries set up on my Vanguard retirement and non retirement accounts. I did it online but it was a long time ago.
I also have other bank accounts that I I intentionally did not name a beneficiary so that the money goes to my estate to pay bills. I do have a will.

rj342
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Re: Payable On Death Account as Will Substitute

Post by rj342 » Tue May 21, 2019 11:22 am

If he owns a home he needs a will.
Typically a deed has no beneficiary/POD option beyond a home purchased in husband and wife's name automatically going to surviving spouse, protected from probate (in some states, forget the legal term).

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Re: Payable On Death Account as Will Substitute

Post by Sandi_k » Tue May 21, 2019 11:30 am

increment wrote:
Tue May 21, 2019 11:08 am
If he later wants to write a will, the POD designation is not autorevoked. It takes precedence over any will.
I don't think you are correct on this. My understanding is that any financial account with a beneficiary listed ensures that the account passes OUTSIDE of the estate covered by a will.

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Re: Payable On Death Account as Will Substitute

Post by sailaway » Tue May 21, 2019 11:32 am

Sandi_k wrote:
Tue May 21, 2019 11:30 am
increment wrote:
Tue May 21, 2019 11:08 am
If he later wants to write a will, the POD designation is not autorevoked. It takes precedence over any will.
I don't think you are correct on this. My understanding is that any financial account with a beneficiary listed ensures that the account passes OUTSIDE of the estate covered by a will.
How is that different than what you are responding to?

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Leesbro63
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Re: Payable On Death Account as Will Substitute

Post by Leesbro63 » Tue May 21, 2019 11:33 am

I am the original poster: Clarification: This family member does have a will that names the same two people as his sole heirs. He doesn't want to change that. It just seems to me that having the POD account simplifies his intentions, since his Vanguard taxable account is his main financial asset. But there is a will for anything outside the POD account.

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Leesbro63
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Re: Payable On Death Account as Will Substitute

Post by Leesbro63 » Tue May 21, 2019 11:34 am

rj342 wrote:
Tue May 21, 2019 11:22 am
If he owns a home he needs a will.
Typically a deed has no beneficiary/POD option beyond a home purchased in husband and wife's name automatically going to surviving spouse, protected from probate (in some states, forget the legal term).
He owns no real estate.

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RickBoglehead
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Re: Payable On Death Account as Will Substitute

Post by RickBoglehead » Tue May 21, 2019 11:37 am

Leesbro63 wrote:
Tue May 21, 2019 11:12 am
RickBoglehead wrote:
Tue May 21, 2019 11:07 am
Leesbro63 wrote:
Tue May 21, 2019 10:31 am
I have a close friend who has a fairly simple estate planning situation, I think. He's single and does not intend to get married, is in his late 50s and has fair health. He will have two heirs (his niece and nephew...both post-college young adults). He has no children of his own. He will retire soon with no business interests. The lion's share of his nest egg is in a taxable Vanguard account. I've suggested that he make the Vanguard account as a "Payable On Death" account, with the niece and nephew as beneficiaries, to simplify his situation. He wishes them to receive his assets, upon his death, outright, with no restrictions.

His question to me was a good one that I'm having trouble answering: "What's the downside?" And "If this is so good, why aren't many more people doing it".

I'm wondering what the responses here will be.

EDIT: I just went through the process on the Vanguard site. It seems that they ask for a "Primary" and "Secondary" beneficiary, but ask for percentages. How do I set this up for two primary beneficiaries, each getting 50%? Since I was just playing around on my own account to see how this works, I did not click the final "CONFIRM" button. Once that's done, is the Vanguard system smart enough to know that a 50% primary and 50% secondary is 50/50 to each?
Primary comes before secondary. So, if a primary beneficiary is alive, they get it all. Period.

Sounds like he would want two primary beneficiaries, each getting 50%. Then, he sets up secondary beneficiaries if one or both of the primary beneficiaries are deceased.
I understand that. But the Vanguard site set up for beneficiaries, for taxable accounts, gives you a single option for a Primary beneficiary. Then it asks the percent for that single beneficiary. I am guessing that once it's submitted, another screen will come up asking for a second primary beneficiary, for the remaining percentage. But it's not clear this is the case. In other words, it seems that the Vanguard site makes a provision for more than one primary beneficiary, because it allows percentages, but there is no input for the second primary beneficiary on the main input screen.
Read more carefully. After you put in the Primary beneficiary, right underneath it says "Add a primary beneficiary".
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

increment
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Re: Payable On Death Account as Will Substitute

Post by increment » Tue May 21, 2019 11:38 am

Leesbro63 wrote:
Tue May 21, 2019 11:33 am
This family member does have a will that names the same two people as his sole heirs. He doesn't want to change that. It just seems to me that having the POD account simplifies his intentions, since his Vanguard taxable account is his main financial asset. But there is a will for anything outside the POD account.
Today, if he wants to change his plan, a new will is sufficient.

If he has a POD designation too, then if he wants to change his plan, he needs a new will and new POD designations. He must do the latter because an old POD designation cannot be overridden by a newer will.

if he needs a will anyway, how does it simplify his intentions to have to state them in two places, rather than one?

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Re: Payable On Death Account as Will Substitute

Post by RickBoglehead » Tue May 21, 2019 11:42 am

POD allows the asset to be transferred to the beneficiaries outside probate. Removing the beneficiaries and relying on the will means everything goes through probate. If nothing else, that usually means it takes longer and costs more - both because of attorney fees and the government taking their slice. Probate court fees are often asset-dependent.

Of course just having the money appear can create issues that a trust may avoid, so the age and financial maturity of the beneficiaries must come into play. Having a 19 year old suddenly have a lot of money is much different than a 35 year old. Or a 7 year old.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

increment
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Re: Payable On Death Account as Will Substitute

Post by increment » Tue May 21, 2019 11:47 am

RickBoglehead wrote:
Tue May 21, 2019 11:42 am
Removing the beneficiaries and relying on the will means everything goes through probate. If nothing else, that usually means it takes longer and costs more
Yes, using POD probably does simplify the execution of his intentions. But not the process of stating his intentions, in case he might want to change them later. It opens a space for things to go wrong. That's all that I meant.

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dm200
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Re: Payable On Death Account as Will Substitute

Post by dm200 » Tue May 21, 2019 12:28 pm

One reason for using a will (and not POD) is that the death may be many years into the future - and a lot may change over that time. A will can be written to take into account many kinds of changes that may take place over time - both changes in the nature of the assets and changes in the lives of the beneficiaries.

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Re: Payable On Death Account as Will Substitute

Post by SrGrumpy » Tue May 21, 2019 2:10 pm

Leesbro63 wrote:
Tue May 21, 2019 11:33 am
I am the original poster: Clarification: This family member does have a will that names the same two people as his sole heirs. He doesn't want to change that. It just seems to me that having the POD account simplifies his intentions, since his Vanguard taxable account is his main financial asset. But there is a will for anything outside the POD account.
You might want to change the headline, replacing "Substitute" with "Complement" - and update the original post.

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Re: Payable On Death Account as Will Substitute

Post by bsteiner » Tue May 21, 2019 2:19 pm

Just this week we got a new estate where the decedent left several million dollars in trust for her grandchildren. She subsequently named her husband as POD or TOD beneficiary on her accounts. So there's almost no money left in her estate to pay the bequest.

Fortunately for the grandchildren, her husband is going to disclaim the accounts since there's no portability for the GST exemption. But if it had been a second marriage he might not.

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Leesbro63
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Re: Payable On Death Account as Will Substitute

Post by Leesbro63 » Tue May 21, 2019 2:37 pm

SrGrumpy wrote:
Tue May 21, 2019 2:10 pm
Leesbro63 wrote:
Tue May 21, 2019 11:33 am
I am the original poster: Clarification: This family member does have a will that names the same two people as his sole heirs. He doesn't want to change that. It just seems to me that having the POD account simplifies his intentions, since his Vanguard taxable account is his main financial asset. But there is a will for anything outside the POD account.
You might want to change the headline, replacing "Substitute" with "Complement" - and update the original post.
You are correct. Thank you. Done!

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FIREchief
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Re: Payable On Death Account as Will Substitute

Post by FIREchief » Tue May 21, 2019 2:39 pm

bsteiner wrote:
Tue May 21, 2019 2:19 pm
Just this week we got a new estate where the decedent left several million dollars in trust for her grandchildren. She subsequently named her husband as POD or TOD beneficiary on her accounts. So there's almost no money left in her estate to pay the bequest.

Fortunately for the grandchildren, her husband is going to disclaim the accounts since there's no portability for the GST exemption. But if it had been a second marriage he might not.
That's a scary one. Hopefully the husband follows through. A lot of husbands (and wives) might have to think long and hard before relinquishing several million dollars to a grandchild immediately (versus keeping it with the intention to leave it to them eventually - regardless of tax consequences).
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Leesbro63
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Re: Payable On Death Account as Will Substitute

Post by Leesbro63 » Tue May 21, 2019 2:42 pm

RickBoglehead wrote:
Tue May 21, 2019 11:37 am
Leesbro63 wrote:
Tue May 21, 2019 11:12 am
RickBoglehead wrote:
Tue May 21, 2019 11:07 am
Leesbro63 wrote:
Tue May 21, 2019 10:31 am
I have a close friend who has a fairly simple estate planning situation, I think. He's single and does not intend to get married, is in his late 50s and has fair health. He will have two heirs (his niece and nephew...both post-college young adults). He has no children of his own. He will retire soon with no business interests. The lion's share of his nest egg is in a taxable Vanguard account. I've suggested that he make the Vanguard account as a "Payable On Death" account, with the niece and nephew as beneficiaries, to simplify his situation. He wishes them to receive his assets, upon his death, outright, with no restrictions.

His question to me was a good one that I'm having trouble answering: "What's the downside?" And "If this is so good, why aren't many more people doing it".

I'm wondering what the responses here will be.

EDIT: I just went through the process on the Vanguard site. It seems that they ask for a "Primary" and "Secondary" beneficiary, but ask for percentages. How do I set this up for two primary beneficiaries, each getting 50%? Since I was just playing around on my own account to see how this works, I did not click the final "CONFIRM" button. Once that's done, is the Vanguard system smart enough to know that a 50% primary and 50% secondary is 50/50 to each?
Primary comes before secondary. So, if a primary beneficiary is alive, they get it all. Period.

Sounds like he would want two primary beneficiaries, each getting 50%. Then, he sets up secondary beneficiaries if one or both of the primary beneficiaries are deceased.
I understand that. But the Vanguard site set up for beneficiaries, for taxable accounts, gives you a single option for a Primary beneficiary. Then it asks the percent for that single beneficiary. I am guessing that once it's submitted, another screen will come up asking for a second primary beneficiary, for the remaining percentage. But it's not clear this is the case. In other words, it seems that the Vanguard site makes a provision for more than one primary beneficiary, because it allows percentages, but there is no input for the second primary beneficiary on the main input screen.
Read more carefully. After you put in the Primary beneficiary, right underneath it says "Add a primary beneficiary".
Thank you. Actually mine did not say "ADD" a primary beneficiary, but by clicking "primary beneficiary" after I did the first primary beneficiary, it allowed me to add a second primary beneficiary. Thank you again for showing me how to do this.

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tadamsmar
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Re: Payable On Death Account to Compliment Will

Post by tadamsmar » Tue May 21, 2019 2:51 pm

You should look into adding the "per stirpes" prefix to the primary beneficiaries. Does he want that? Does Vanguard support that?
Last edited by tadamsmar on Tue May 21, 2019 4:14 pm, edited 3 times in total.

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Re: Payable On Death Account as Will Substitute

Post by Longdog » Tue May 21, 2019 2:51 pm

Leesbro63 wrote:
Tue May 21, 2019 11:33 am
I am the original poster: Clarification: This family member does have a will that names the same two people as his sole heirs. He doesn't want to change that. It just seems to me that having the POD account simplifies his intentions, since his Vanguard taxable account is his main financial asset. But there is a will for anything outside the POD account.
I think that is right. Leave enough outside the POD accounts to cover debts, taxes, burial, and other incidentals. But the bulk of his assets could be in POD accounts.
Steve

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Re: Payable On Death Account as Will Substitute

Post by Longdog » Tue May 21, 2019 2:54 pm

increment wrote:
Tue May 21, 2019 11:38 am
Leesbro63 wrote:
Tue May 21, 2019 11:33 am
This family member does have a will that names the same two people as his sole heirs. He doesn't want to change that. It just seems to me that having the POD account simplifies his intentions, since his Vanguard taxable account is his main financial asset. But there is a will for anything outside the POD account.
Today, if he wants to change his plan, a new will is sufficient.

If he has a POD designation too, then if he wants to change his plan, he needs a new will and new POD designations. He must do the latter because an old POD designation cannot be overridden by a newer will.

if he needs a will anyway, how does it simplify his intentions to have to state them in two places, rather than one?
Changing POD designations on the Vanguard site takes maybe a minute, but probably less. If his time is that valuable that an extra minute is intolerable, then he definitely should hire a top lawyer to write a will, and to update it whenever necessary.
Steve

increment
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Re: Payable On Death Account as Will Substitute

Post by increment » Tue May 21, 2019 3:02 pm

Longdog wrote:
Tue May 21, 2019 2:54 pm
Changing POD designations on the Vanguard site takes maybe a minute, but probably less. If his time is that valuable that an extra minute is intolerable, then he definitely should hire a top lawyer to write a will, and to update it whenever necessary.
I think that the danger (perhaps small) is that people may forget that it's necessary, or don't get around to it---similar to the stories about people who spend real money to set up trusts and yet never get around to funding them.

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Re: Payable On Death Account to Compliment Will

Post by fourwheelcycle » Tue May 21, 2019 7:38 pm

Leesboro63,

Estate planning is driven by a multitude of "what if" considerations. POD designations collapse all these questions to a single certainty on how the POD portion of your friend's estate will be disposed of. Each what if may represent a small likelihood by itself, but together all of these what if considerations add up to a very reasonable argument in favor of a carefully thought out set of estate planning documents.

You noted in a subsequent post that your friend does have a will. Does his will name a willing and qualified executor to pay his final bills, file his final taxes, and probate the portion of his estate that is outside of the contemplated Vanguard POD account? Are there sufficient funds outside the Vanguard account for his executor to perform these crucial tasks?

Does he also have properly executed DPOA designations for finances and health care decisions, and advanced directives that clearly state his preferences for end of life care, or for care in the event he becomes incompetent as the result of a car crash, stroke, or dementia? Importantly, in the event he becomes suddenly or slowly incompetent, has he executed the necessary forms with Vanguard to allow his designated DPOA for finances to access his money to pay his nursing home bills, or make changes to his contemplated POD designations if his niece or nephew experience life changes such as having children, getting sued or divorced, etc, that might it reasonable or necessary to modify his POD designations?

I am my elderly father's DPOA and executor. His will says to divide his estate, after final expenses, among his many children, per stirpes, with trusts for any minor heirs if needed. I have put sufficient funds to pay his final expenses in a separate Marcus joint savings account (with me) and I have put the bulk of his savings in a Vanguard account (where I have full transaction authority) with equal share TOD designations for each of his children. This set-up will avoid the need for me to probate his will and it will transfer any remaining funds to me and my siblings when he dies. But I am still competent (for now) to watch over his affairs and make changes to his TOD designations if anything happens in the lives of my siblings that would merit reliance on his will instead of the TOD designations (one of my siblings is my successor DPOA and executor if anything happens to me).

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Re: Payable On Death Account to Compliment Will

Post by FIREchief » Tue May 21, 2019 9:00 pm

fourwheelcycle wrote:
Tue May 21, 2019 7:38 pm
Leesboro63,

Estate planning is driven by a multitude of "what if" considerations. POD designations collapse all these questions to a single certainty on how the POD portion of your friend's estate will be disposed of. Each what if may represent a small likelihood by itself, but together all of these what if considerations add up to a very reasonable argument in favor of a carefully thought out set of estate planning documents.

You noted in a subsequent post that your friend does have a will. Does his will name a willing and qualified executor to pay his final bills, file his final taxes, and probate the portion of his estate that is outside of the contemplated Vanguard POD account? Are there sufficient funds outside the Vanguard account for his executor to perform these crucial tasks?

Does he also have properly executed DPOA designations for finances and health care decisions, and advanced directives that clearly state his preferences for end of life care, or for care in the event he becomes incompetent as the result of a car crash, stroke, or dementia? Importantly, in the event he becomes suddenly or slowly incompetent, has he executed the necessary forms with Vanguard to allow his designated DPOA for finances to access his money to pay his nursing home bills, or make changes to his contemplated POD designations if his niece or nephew experience life changes such as having children, getting sued or divorced, etc, that might it reasonable or necessary to modify his POD designations?

I am my elderly father's DPOA and executor. His will says to divide his estate, after final expenses, among his many children, per stirpes, with trusts for any minor heirs if needed. I have put sufficient funds to pay his final expenses in a separate Marcus joint savings account (with me) and I have put the bulk of his savings in a Vanguard account (where I have full transaction authority) with equal share TOD designations for each of his children. This set-up will avoid the need for me to probate his will and it will transfer any remaining funds to me and my siblings when he dies. But I am still competent (for now) to watch over his affairs and make changes to his TOD designations if anything happens in the lives of my siblings that would merit reliance on his will instead of the TOD designations (one of my siblings is my successor DPOA and executor if anything happens to me).
Best post of the thread. Responsible adults having open communications about intentions, and the tools/means to efficiently achieve them. In this type of scenario, I suspect that the OP's question may become largely irrelevant. Otherwise, regardless of approach there may be a disaster (for the executor) in the making.
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Re: Payable On Death Account to Compliment Will

Post by Alan S. » Tue May 21, 2019 9:20 pm

When the bulk of the assets pass by beneficiary designation, unknown final expenses including taxes, final cc bills, final medical bills, funeral/burial costs etc may not have adequate funding from the limited assets subject to probate.

If that happens, paying all the final costs including executor or other fiduciary fees can be a problem. When it should not be a problem is when the individual beneficiaries know in advance what these expenses could total to and know and agree in advance that they will fund them from their beneficiary proceeds.

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Re: Payable On Death Account to Compliment Will

Post by FIREchief » Tue May 21, 2019 10:20 pm

Alan S. wrote:
Tue May 21, 2019 9:20 pm
When the bulk of the assets pass by beneficiary designation, unknown final expenses including taxes, final cc bills, final medical bills, funeral/burial costs etc may not have adequate funding from the limited assets subject to probate.

If that happens, paying all the final costs including executor or other fiduciary fees can be a problem.
This is why I'm baffled that so many people just blindly agree to serve as executor, without having a clue what they are getting into. As I understand it, once somebody dies, nobody has legal right to access their property/records/etc. until appointed as executor by the courts. Once appointed, it is too late if there is a big mess of incoming bills/liabilities and no liquid assets (or no probate assets at all) to pay them. I'm guessing that if I hire a lawyer, I'm going to have to pay him/her if the estate can't. Same with a funeral home. It is clear from many of these threads that many of us Bogleheads either don't understand this or have only recently understood. This suggests to me that ignorance likely runs rampant out in the wilds.
When it should not be a problem is when the individual beneficiaries know in advance what these expenses could total to and know and agree in advance that they will fund them from their beneficiary proceeds.
This sounds great and likely works out in many (most?) such scenarios. That said, I can envision scenarios where mistrust and greed could easily derail such a plan. Two brothers inherit 100% and get along? Sure, shouldn't be a problem. Surviving son inherits 50% and deceased son's adult children inherit other 50%. Maybe a bit cloudier. I could go a bit further into dark territory, but I think I've made my point.
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Re: Payable On Death Account to Compliment Will

Post by HereToLearn » Tue May 21, 2019 10:59 pm

FIREchief wrote:
Tue May 21, 2019 10:20 pm
Alan S. wrote:
Tue May 21, 2019 9:20 pm
When the bulk of the assets pass by beneficiary designation, unknown final expenses including taxes, final cc bills, final medical bills, funeral/burial costs etc may not have adequate funding from the limited assets subject to probate.

If that happens, paying all the final costs including executor or other fiduciary fees can be a problem.
This is why I'm baffled that so many people just blindly agree to serve as executor, without having a clue what they are getting into. As I understand it, once somebody dies, nobody has legal right to access their property/records/etc. until appointed as executor by the courts. Once appointed, it is too late if there is a big mess of incoming bills/liabilities and no liquid assets (or no probate assets at all) to pay them. I'm guessing that if I hire a lawyer, I'm going to have to pay him/her if the estate can't. Same with a funeral home. It is clear from many of these threads that many of us Bogleheads either don't understand this or have only recently understood. This suggests to me that ignorance likely runs rampant out in the wilds.
When it should not be a problem is when the individual beneficiaries know in advance what these expenses could total to and know and agree in advance that they will fund them from their beneficiary proceeds.
This sounds great and likely works out in many (most?) such scenarios. That said, I can envision scenarios where mistrust and greed could easily derail such a plan. Two brothers inherit 100% and get along? Sure, shouldn't be a problem. Surviving son inherits 50% and deceased son's adult children inherit other 50%. Maybe a bit cloudier. I could go a bit further into dark territory, but I think I've made my point.
Having just settled (most of) my mother's estate, I have to say that I was one who blindly agreed to the executor role without fully realizing all the role entailed.

You are correct that there were some serious bills to pay within weeks of her death: funeral & luncheon, property taxes, current credit card/medical/house bills, etc. I was joint on her checking account, but did not keep a ton of money there because of the pitiful interest. I ran through the money in the checking account and had to ask each of my siblings to contribute so that we could all jointly fund the cost of running her house until we could clean it out and sell it. If everyone hadn't been cooperative, I suppose I would have funded the probate-related expenses and then reimbursed myself from the proceeds of the house sale.

The brokerage/IRA accounts were POD, so I had that money distributed promptly, and probate was processed within a month of the filing, but we still needed to keep the house heated and the lights on, in addition to paying the lawyer, etc.

I have spent hundreds of hours handling her estate. I never imagined it would be so involved, and now kind of wish there had been some sort of compensation.

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Re: Payable On Death Account to Compliment Will

Post by Big Dog » Tue May 21, 2019 11:18 pm

If he owns a home he needs a will.
While the OP has already responded that his friend does not own any RE, I'm just popping in to say, not necessarily. California now allows a ToD title transfer for real estate just by filing a simple form.

In our case, the wife and I have two kids, which each get 50:50. All assets but the checking account in PoD/ToD. The checking account has one kid as an additional signer, so she can pay final bills and any taxes due with final return. Don't see a need for a will.

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Re: Payable On Death Account as Will Substitute

Post by Christine_NM » Tue May 21, 2019 11:19 pm

dm200 wrote:
Tue May 21, 2019 12:28 pm
One reason for using a will (and not POD) is that the death may be many years into the future - and a lot may change over that time. A will can be written to take into account many kinds of changes that may take place over time - both changes in the nature of the assets and changes in the lives of the beneficiaries.
I've found that it is much easier to change PODs than to change a will. My will tends to become outdated shortly after it is written. I wait a few years, have a new one done, then things change again. Recently I found out my county accepts transfer-on-death deeds for real estate so that is the latest wrinkle I want to add, so there will be no delay in access to my house. But my bank and Vanguard PODs are always correct.

The only problem I can think of is if your POD designee dies and then you become incapacitated or die before you can change it. If a POD predeceases you, does the account go into probate? Probably.
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Re: Payable On Death Account to Compliment Will

Post by FIREchief » Wed May 22, 2019 12:21 am

HereToLearn wrote:
Tue May 21, 2019 10:59 pm
Having just settled (most of) my mother's estate, I have to say that I was one who blindly agreed to the executor role without fully realizing all the role entailed.

You are correct that there were some serious bills to pay within weeks of her death: funeral & luncheon, property taxes, current credit card/medical/house bills, etc. I was joint on her checking account, but did not keep a ton of money there because of the pitiful interest. I ran through the money in the checking account and had to ask each of my siblings to contribute so that we could all jointly fund the cost of running her house until we could clean it out and sell it. If everyone hadn't been cooperative, I suppose I would have funded the probate-related expenses and then reimbursed myself from the proceeds of the house sale.
Thanks for sharing. You have my sympathy. :beer
The brokerage/IRA accounts were POD, so I had that money distributed promptly,
I'm guessing that you simply helped connect the heirs with the account custodians. Is this correct? I didn't think an executor had a role here, other than perhaps having to understand the amounts in the event that federal or state estate tax was involved.
I have spent hundreds of hours handling her estate. I never imagined it would be so involved, and now kind of wish there had been some sort of compensation.
I believe that most wills allow for compensation, but many well intentioned family members who "volunteer" to serve as executor decline such compensation. Is this the case?

Full disclosure: I've never served as executor but have been close enough to be sacred silly, particularly in a situation where family relationships (including extended family heirs) are "complicated."
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: Payable On Death Account to Compliment Will

Post by fourwheelcycle » Wed May 22, 2019 7:33 am

HereToLearn wrote:
Tue May 21, 2019 10:59 pm
I have spent hundreds of hours handling her estate. I never imagined it would be so involved, and now kind of wish there had been some sort of compensation.
When she was about 78 my never-married aunt asked me if I would serve as her executor and DPOA for finances and health care. I said yes, and I never saw her actual will and DPOA documents until she had a series of falls at age 90 which required me to help her move from independent living in her home state to a very nice assisted living facility near me, and then to oversee all of her health care and manage her finances during the last three years of her life.

When I saw her documents I learned she had asked her lawyer, when the documents were prepared, what type of fee she should pay me for serving as her executor and DPOA. Her lawyer advised her a fee of 5% of her (relatively modest) estate would be appropriate, and he suggested she should include me in her will as 5% beneficiary rather than paying me a fee, which I would have to declare as income.

On the other hand, my father, for whom I am currently serving as executor and DPOA, made me promise not to charge any fee at all to his estate after his death!

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Re: Payable On Death Account to Compliment Will

Post by bsteiner » Wed May 22, 2019 8:00 am

FIREchief wrote:
Wed May 22, 2019 12:21 am
...
I believe that most wills allow for compensation, but many well intentioned family members who "volunteer" to serve as executor decline such compensation. Is this the case?
...
Most Wills are silent, in which case executors are entitled to commissions (compensation). About half the states have a statutory schedule, and about half the states allow reasonable compensation (which means that if the executors and beneficiaries can't agree, the court will decide).

Spouses rarely take commissions. Children usually take or don't take commissions based on tax considerations. When the estate tax rates were higher and the exclusion amount was lower, children often took commissions to get an estate tax deduction. Others take or don't take commissions based on various considerations.

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Re: Payable On Death Account to Compliment Will

Post by HereToLearn » Wed May 22, 2019 10:24 am

FIREchief wrote:
Wed May 22, 2019 12:21 am
HereToLearn wrote:
Tue May 21, 2019 10:59 pm
Having just settled (most of) my mother's estate, I have to say that I was one who blindly agreed to the executor role without fully realizing all the role entailed.

You are correct that there were some serious bills to pay within weeks of her death: funeral & luncheon, property taxes, current credit card/medical/house bills, etc. I was joint on her checking account, but did not keep a ton of money there because of the pitiful interest. I ran through the money in the checking account and had to ask each of my siblings to contribute so that we could all jointly fund the cost of running her house until we could clean it out and sell it. If everyone hadn't been cooperative, I suppose I would have funded the probate-related expenses and then reimbursed myself from the proceeds of the house sale.
Thanks for sharing. You have my sympathy. :beer
The brokerage/IRA accounts were POD, so I had that money distributed promptly,
I'm guessing that you simply helped connect the heirs with the account custodians. Is this correct? I didn't think an executor had a role here, other than perhaps having to understand the amounts in the event that federal or state estate tax was involved.
I have spent hundreds of hours handling her estate. I never imagined it would be so involved, and now kind of wish there had been some sort of compensation.
I believe that most wills allow for compensation, but many well intentioned family members who "volunteer" to serve as executor decline such compensation. Is this the case?

Full disclosure: I've never served as executor but have been close enough to be sacred silly, particularly in a situation where family relationships (including extended family heirs) are "complicated."
I thought I had copied an explanation of how to quote to respond, but clearly I have forgotten AGAIN, so I cannot drop my responses where below your questions. SORRY!

RE: Disbursing funds from brokerage account.

Yes, my sentence was poorly worded. I simply notified the brokerage account, uploaded appropriate paperwork to their estate account, followed up with them several times, and then explained to my siblings how to open brokerage, IRA and Roth IRA accounts. No tax implications. Just the usual back and forth, but this was relatively painless. I was trying to prompt the brokerage account along so that the transaction could be completed in 2018, but it ended up being the second business day of 2019. (One more set of 1099s.)

RE: compensation as executor. I took my mother to a lawyer to have a new will drawn up after my father passed ten years earlier. I am sure we discussed the compensation issue and I agreed that I would not want to be paid, but I have to say that all of this work feels very different than the time I spent managing her life when she was alive. I have been relentless in tracking down every $100. Some money is easy to 'claim' and other providers/vendors have been an administrative nightmare. SSA was effortless, but both the LTC and a mess up with her final pension payout being clawed back twice have not been worth the effort. Lessons learned. And I need to go look at my will to see how I addressed the topic of executor compensation.

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Re: Payable On Death Account to Compliment Will

Post by HereToLearn » Wed May 22, 2019 10:32 am

bsteiner wrote:
Wed May 22, 2019 8:00 am
FIREchief wrote:
Wed May 22, 2019 12:21 am
...
I believe that most wills allow for compensation, but many well intentioned family members who "volunteer" to serve as executor decline such compensation. Is this the case?
...
Most Wills are silent, in which case executors are entitled to commissions (compensation). About half the states have a statutory schedule, and about half the states allow reasonable compensation (which means that if the executors and beneficiaries can't agree, the court will decide).

Spouses rarely take commissions. Children usually take or don't take commissions based on tax considerations. When the estate tax rates were higher and the exclusion amount was lower, children often took commissions to get an estate tax deduction. Others take or don't take commissions based on various considerations.
My mother's will was not silent, but since I sat through the drafting of it and hired the lawyer for her, I have only myself to blame! The amount the state would have allowed stuck me as shockingly high. I never tallied the hours spent on hold with or sending off certified letters to various organizations. I still do not know how much I think is an appropriate compensation level, and I am musing here on behalf of my own will. If I were to die today, my estate would be relatively simple to settle, but dying at an older age after suffering a long illness, having LTC, pension & SS, and having to empty and sell the family home of 50 years...that took a lot of time.

I don't even know what the tax considerations would have been, so perhaps just as well that I was not compensated. Still need to figure out if it is worth filing a final tax return in order to claim the pass-through itemized deductions associated with the expenses of settling the estate. (AFAIK, deduction would flow to siblings in equal shares.)

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Re: Payable On Death Account to Compliment Will

Post by bsteiner » Wed May 22, 2019 10:40 am

HereToLearn wrote:
Wed May 22, 2019 10:32 am
...
My mother's will was not silent, but since I sat through the drafting of it and hired the lawyer for her, I have only myself to blame! The amount the state would have allowed stuck me as shockingly high. I never tallied the hours spent on hold with or sending off certified letters to various organizations. I still do not know how much I think is an appropriate compensation level, and I am musing here on behalf of my own will. If I were to die today, my estate would be relatively simple to settle, but dying at an older age after suffering a long illness, having LTC, pension & SS, and having to empty and sell the family home of 50 years...that took a lot of time.
...
The work isn't necessarily in proportion to the size of the estate. You can have a small estate with a great deal of work. You can have a large estate with a modest amount of work. You can spend a great deal of time dealing with nonprobate assets on which you don't get a commission (fee).

The benefit of having a schedule of executors' commissions is to minimize disputes so that the court doesn't have to spend time determining what's appropriate in each case where there's a dispute. It will give the executor a windfall in some cases, and will provide too little compensation in other cases. While it's no consolation to the executor who gets too little, in the long run it averages out.

The benefit of having reasonable compensation on a case by case basis it that (where the executors and beneficiaries can't agree) each executor who wants to be compensated will get what the court thinks is the correct amount for that case. The disadvantage is that it takes up more of the court's time (and more legal fees to bring the case to court).

To the original poster: please change "compliment" to "complement" in the subject line.

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Re: Payable On Death Account as Will Substitute

Post by MrBobcat » Wed May 22, 2019 10:42 am

increment wrote:
Tue May 21, 2019 11:38 am
Leesbro63 wrote:
Tue May 21, 2019 11:33 am
This family member does have a will that names the same two people as his sole heirs. He doesn't want to change that. It just seems to me that having the POD account simplifies his intentions, since his Vanguard taxable account is his main financial asset. But there is a will for anything outside the POD account.
Today, if he wants to change his plan, a new will is sufficient.

If he has a POD designation too, then if he wants to change his plan, he needs a new will and new POD designations. He must do the latter because an old POD designation cannot be overridden by a newer will.

if he needs a will anyway, how does it simplify his intentions to have to state them in two places, rather than one?
This

I knew an elderly gentleman, married to his second wife for 25ish years before passing. Had in his will he wanted $XX to go to his wife and the balance to go to his kids. His brokerage account with all his assets was TOD to his kids. Kids didn't get along with "new" wife, she got nothing.

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Re: Payable On Death Account as Will Substitute

Post by dm200 » Wed May 22, 2019 10:52 am

MrBobcat wrote:
Wed May 22, 2019 10:42 am
increment wrote:
Tue May 21, 2019 11:38 am
Leesbro63 wrote:
Tue May 21, 2019 11:33 am
This family member does have a will that names the same two people as his sole heirs. He doesn't want to change that. It just seems to me that having the POD account simplifies his intentions, since his Vanguard taxable account is his main financial asset. But there is a will for anything outside the POD account.
Today, if he wants to change his plan, a new will is sufficient.
If he has a POD designation too, then if he wants to change his plan, he needs a new will and new POD designations. He must do the latter because an old POD designation cannot be overridden by a newer will.

if he needs a will anyway, how does it simplify his intentions to have to state them in two places, rather than one?
This

I knew an elderly gentleman, married to his second wife for 25ish years before passing. Had in his will he wanted $XX to go to his wife and the balance to go to his kids. His brokerage account with all his assets was TOD to his kids. Kids didn't get along with "new" wife, she got nothing.
Exactly - example of "unintended consequences".

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Re: Payable On Death Account as Will Substitute

Post by bsteiner » Wed May 22, 2019 11:06 am

MrBobcat wrote:
Wed May 22, 2019 10:42 am
...
I knew an elderly gentleman, married to his second wife for 25ish years before passing. Had in his will he wanted $XX to go to his wife and the balance to go to his kids. His brokerage account with all his assets was TOD to his kids. Kids didn't get along with "new" wife, she got nothing.
The wife may (or may not) be entitled to an elective share.

We had one that was the other way around. The decedent had made detailed provisions for his third wife and for his children from his first marriage. Then he sold a business interest and put the proceeds in an account with the wife as beneficiary. There wasn't much left for the children.

We had another where the principal account went to someone as the named beneficiary, and there wasn't much left to pay the cash bequests. Fortunately in that one the beneficiary of the account made gifts to satisfy the cash bequests. But she didn't have to do that.

We had yet another one where the parents intended to provide for their daughter in trust to keep her inheritance out of her estate and to protect it against her spouse if she were to marry. Many years later after the mother died and the father was elderly, the father changed brokers, and the new broker had him name the daughter as TOD beneficiary, thus defeating their estate plan. Fortunately the estate tax exclusion amount went up so much in the interim that estate taxes were no longer an issue, and the daughter never married so protection against spouses wasn't an issue. Still, the broker should have told him to check with his lawyer before doing this, or asked for his permission to call us before doing this.

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Re: Payable On Death Account as Will Substitute

Post by bayview » Wed May 22, 2019 11:42 am

MrBobcat wrote:
Wed May 22, 2019 10:42 am
increment wrote:
Tue May 21, 2019 11:38 am
Leesbro63 wrote:
Tue May 21, 2019 11:33 am
This family member does have a will that names the same two people as his sole heirs. He doesn't want to change that. It just seems to me that having the POD account simplifies his intentions, since his Vanguard taxable account is his main financial asset. But there is a will for anything outside the POD account.
Today, if he wants to change his plan, a new will is sufficient.

If he has a POD designation too, then if he wants to change his plan, he needs a new will and new POD designations. He must do the latter because an old POD designation cannot be overridden by a newer will.

if he needs a will anyway, how does it simplify his intentions to have to state them in two places, rather than one?
This

I knew an elderly gentleman, married to his second wife for 25ish years before passing. Had in his will he wanted $XX to go to his wife and the balance to go to his kids. His brokerage account with all his assets was TOD to his kids. Kids didn't get along with "new" wife, she got nothing.
I'm always curious when I read this sort of thing. Unless someone is writing his/her own will, how on earth does a competent attorney not get the client to then and there log into brokerage and bank accounts and update PODs/TODs? And if the client can't or doesn't want to, shouldn't there be a few gentle nags/reminders? I know we're all supposed to be big boys and girls, but still.

edit to add: and the reverse, as Bruce Steiner pointed out above. In the case of the will change, I would think that the attorney would want to document that he/she had pointed out the necessity of updating POD/TOD. Seems like this could be done in the follow-up "thank you" letter: "Dear Client, Thank you for your recent visit to update your will. I want to once again remind you that you MUST update your POD/TOD accounts to comply with your will, or the instructions in your will will be overridden." Or some such.
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Re: Payable On Death Account as Will Substitute

Post by MrBobcat » Wed May 22, 2019 11:52 am

bayview wrote:
Wed May 22, 2019 11:42 am
MrBobcat wrote:
Wed May 22, 2019 10:42 am
increment wrote:
Tue May 21, 2019 11:38 am
Leesbro63 wrote:
Tue May 21, 2019 11:33 am
This family member does have a will that names the same two people as his sole heirs. He doesn't want to change that. It just seems to me that having the POD account simplifies his intentions, since his Vanguard taxable account is his main financial asset. But there is a will for anything outside the POD account.
Today, if he wants to change his plan, a new will is sufficient.

If he has a POD designation too, then if he wants to change his plan, he needs a new will and new POD designations. He must do the latter because an old POD designation cannot be overridden by a newer will.

if he needs a will anyway, how does it simplify his intentions to have to state them in two places, rather than one?
This

I knew an elderly gentleman, married to his second wife for 25ish years before passing. Had in his will he wanted $XX to go to his wife and the balance to go to his kids. His brokerage account with all his assets was TOD to his kids. Kids didn't get along with "new" wife, she got nothing.
I'm always curious when I read this sort of thing. Unless someone is writing his/her own will, how on earth does a competent attorney not get the client to then and there log into brokerage and bank accounts and update PODs/TODs? And if the client can't or doesn't want to, shouldn't there be a few gentle nags/reminders? I know we're all supposed to be big boys and girls, but still.

edit to add: and the reverse, as Bruce Steiner pointed out above. In the case of the will change, I would think that the attorney would want to document that he/she had pointed out the necessity of updating POD/TOD. Seems like this could be done in the follow-up "thank you" letter: "Dear Client, Thank you for your recent visit to update your will. I want to once again remind you that you MUST update your POD/TOD accounts to comply with your will, or the instructions in your will will be overridden." Or some such.
I agree, I think whoever drafted the will for him and his wife was negligent in not inquiring about how the accounts in question were set up and determining if they conflicted with his will.

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Re: Payable On Death Account as Will Substitute

Post by RickBoglehead » Wed May 22, 2019 12:04 pm

bayview wrote:
Wed May 22, 2019 11:42 am

I'm always curious when I read this sort of thing. Unless someone is writing his/her own will, how on earth does a competent attorney not get the client to then and there log into brokerage and bank accounts and update PODs/TODs? And if the client can't or doesn't want to, shouldn't there be a few gentle nags/reminders? I know we're all supposed to be big boys and girls, but still.

edit to add: and the reverse, as Bruce Steiner pointed out above. In the case of the will change, I would think that the attorney would want to document that he/she had pointed out the necessity of updating POD/TOD. Seems like this could be done in the follow-up "thank you" letter: "Dear Client, Thank you for your recent visit to update your will. I want to once again remind you that you MUST update your POD/TOD accounts to comply with your will, or the instructions in your will will be overridden." Or some such.
How many attorneys provide instruction sheets to clients after giving them a will or preparing a trust? Why don't they? Well, one could speculate that untangling the mess in the future provides billable hours.
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Re: Payable On Death Account as Will Substitute

Post by bayview » Wed May 22, 2019 12:08 pm

RickBoglehead wrote:
Wed May 22, 2019 12:04 pm
bayview wrote:
Wed May 22, 2019 11:42 am

I'm always curious when I read this sort of thing. Unless someone is writing his/her own will, how on earth does a competent attorney not get the client to then and there log into brokerage and bank accounts and update PODs/TODs? And if the client can't or doesn't want to, shouldn't there be a few gentle nags/reminders? I know we're all supposed to be big boys and girls, but still.

edit to add: and the reverse, as Bruce Steiner pointed out above. In the case of the will change, I would think that the attorney would want to document that he/she had pointed out the necessity of updating POD/TOD. Seems like this could be done in the follow-up "thank you" letter: "Dear Client, Thank you for your recent visit to update your will. I want to once again remind you that you MUST update your POD/TOD accounts to comply with your will, or the instructions in your will will be overridden." Or some such.
How many attorneys provide instruction sheets to clients after giving them a will or preparing a trust? Why don't they? Well, one could speculate that untangling the mess in the future provides billable hours.
I'll add "request instruction sheet" to the list when interviewing estate attorneys! :D

I see what you mean, but it seems as if it could bounce back in an unpleasant way if heirs and family could show that the attorney might have been more diligent in ensuring that the client cleaned things up on his/her end. For instance, my mother's will and trust have a separate "Instructions to Client" page emphasizing the importance of titling anything to the trust that she wants there (the house is already titled to the trust.) It is written in an impressively thundering manner, lol.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

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dm200
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Re: Payable On Death Account to Compliment Will

Post by dm200 » Wed May 22, 2019 12:43 pm

How many attorneys provide instruction sheets to clients after giving them a will or preparing a trust? Why don't they? Well, one could speculate that untangling the mess in the future provides billable hours.
As part of the fixed price for all of our documents, our attorney gave us a list of what we needed to do, such as beneficiaries on 401k, life insurance, etc.

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FIREchief
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Re: Payable On Death Account as Will Substitute

Post by FIREchief » Wed May 22, 2019 3:56 pm

RickBoglehead wrote:
Wed May 22, 2019 12:04 pm
How many attorneys provide instruction sheets to clients after giving them a will or preparing a trust? Why don't they?
I would imagine that all of the good ones do. If they're not a good one, why would anybody want to use them?

(jk - somewhat - I doubt that the in-network lawyers that spit out boilerplate documents under Megacorp legal plan benefits spend much time giving this type of guidance) :annoyed
Last edited by FIREchief on Fri May 24, 2019 8:04 pm, edited 2 times in total.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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