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Wednesday, April 14, 2010

When Will You Get a Round Tuit?

When I was a child my father sold life insurance. Insurance is a lot like a will in that everyone knows they need it, but no one wants to discuss it, much less take steps to make it happen. Because of that, he was often, much like I, relegated to a New Year's Resolution in the lives of his clients.

To counteract this, he kept a supply of Round Tuits on hand. Think about that: A Round Tuit. Whenever a client would tell him that they would purchase life insurance one day when they got around to it, he would reach into his desk drawer and hand them one. It was essentially a wooden nickel, but it said (and I am paraphrasing) "Have something you've been putting off? Now you've got a Round Tuit!"

Despite the kitch-ness of it all, I have often considered purchasing a supply of Round Tuits to keep in my desk. We all have something for which we need a Round Tuit as inspiration. An Estate Plan is something you should definitely get around to, sooner rather than later.

Monday, April 5, 2010

If Not I...

Oftentimes when clients come in the office to have a new estate plan drawn up, they only have one beneficiary in mind.

Maybe the client is married without children and only wants their assets to pass to their spouse upon their death. If both spouses come in at once and request mirror image wills to this effect, legal practitioners refer to these as sweetheart wills.

Maybe the client is a single parent with one child. In that case, they might want all of their assets to transfer to that child upon their passing.

In any case, it is imperative that a client consider the possible consequences of their "all or nothing" decision. What if the spouse designated as beneficiary in a sweetheart will perishes in the same car accident as the client? In a case like this, it might be best for a secondary benefiary to be named.

A secondary beneficiary is exactly what it sounds like: you want A to receive the item or account contents. If not A, then B. If not A or B, then C. And so on. Some attorneys do not name secondary (or contingent) beneficiaries at all, and these wills create a lot of questions. Some attorneys go on, ad nauseum, naming beneficiary after beneficiary for contingency after contingency. After reading one of these clauses, it is enough to make you want to hunt down the attorney and put the language out of it's misery.

Generally, three levels of beneficiary are enough. Unless the named beneficiaries are very elderly, very irresponsible with their lives, or might not want the item being bequeathed to them: undisclosed "gifts" of problem animals should probably have more levels of beneficiaries- and come with a sizable cash endowment to care for said animals.

These same concerns can be had when naming caretakers for small children. Not to compare children to animals, of course, but just because your parents raised you well does not mean that they will be around long enough to raise your children too. But that can of worms shall be left for another day.