Steerpike

I've been very lazy in terms of dealing with account beneficiaries, and I'm sure I'm taking a big risk by not having them on some of my accounts.

Basically, I have no kids / no immediate family, and no one 'dependent' on me as such. So my choices seem to be, my mum in the UK, or my girlfriend here.

If I name my mum in the UK as a beneficiary, is that a practical action - will she be reachable (without an SSN, etc), and will it get bogged down in bureaucracy?

If I name my girlfriend in the US as a beneficiary, will that have tax consequences on her? I was thinking of naming her as beneficiary, and then separately asking her to pass on the money to my mum. Let's assume, for the purposes of this discussion, that she is trustworthy .

I guess this is going to bring up the subject of a will also ... which I don't have ... sigh ...

Rete

I can't discuss tax implications since the gf is not a spouse and I believe the law is different. Depending on the size of the accounts you would be better off talking about this with a financial advisor and/or accountant and your lawyer in regards to a will.

You don't need to have only one beneficiary. You can have several as I do to my accounts. So it can be your gf and your mother.

scrubbedexpat097

I don't know what is best for your first question but for your last statement; WHAT? ???
Get a Will sorted now.

We are the most tardy people ever and hadn't bothered with any financial plans if we popped our clogs.M 's heart attack was our wake up call. We are plain and simple so we went the Legal Zoom route. A definite peace of mind.

Do it !!

Giantaxe

Yes, agree, except I would get a living trust (with a backup will) and retitle assets into it including real estate. And durable powers of attorney for financial and healthcare in case of your incapacity. A living trust will help you avoid probate costs which are crazy high. I'm in the process of updating mine and it's been a really useful exercise in re-focusing on where I want my estate to be distributed to.

Steerpike

Thanks everyone. I've always been hesitant to go down these paths due to my aversion to lawyers, but I also have no real 'sense' of what's involved so probably do need a lawyer. How much should I expect to spend on setting up a living trust, and a backup will? 10 hours of a lawyer's time?

Rete

The time allotment would depend on the complexity of the will(s) and power of attorney. For the will itself, healthcare proxy, and power of attorney, 10-20 hours should suffice as you have a relative in the UK and that will add to the complexity of the will. Of course, being that Mum is older and not in the US, I wouldn't recommend that she NOT be listed as the person to make the medical decisions on your behalf as usually those decisions need to be made immediately. Your girlfriend or a good friend is a good choice if they are trustworthy to carry out the provisions of your healthcare proxy. It should also be filed with your physician and given to the hospital if you were to go into the hospital for any condition that might result in you becoming comatose, etc.

Be warned that you really have to trust the person you designate in this situation. If they have a viewpoint that differs from yours on what they would do if it were them, then don't list them as your spokesperson. List the doctor or an attorney instead.

As for the financial end of things, depending on the amount of your estate and its holdings, i.e. investment, real estate, etc. I would get advice from an accountant first and foremost and then take that into account when constructing your will.

The money that you spend on this while you are living is to provide you with peace of mind that your wishes will be carried out upon your death and will make things easier for those who inherit. Don't scrimp.

For us it was super easy as our holdings are small and the monetary funds are limited and covered by law that the accounts go to the person listed as beneficiary or to the living spouse if no beneficiary is listed. Retirement accounts must go to the spouse unless the spouse signs off on it. Life insurance beneficiaries are designated by you and usually are not included in the will.

Steerpike

Thanks for the input.

My situation is very simple - I have two major investment accounts (Schwab and Fidelity), each with some Tax Deferred and some post-tax funds, and I have one piece of property. Total of everything is lower than any estate tax thresholds, it seems.

If my accounts were to have beneficiaries defined, that is apparently an overriding legal directive; this is from the Schwab beneficiary form: "Subject to applicable law, the Designated Beneficiary Plan will generally take precedence over any estate planning vehicles such as a will or trust" - so what role does a will have in this type of situation?

Giantaxe

It would deal with your real estate, assuming that it is owned solely by you and not in a form such as "joint tenancy with right of survivorship". You could also title your car as being in your trust, although my car is worth so little I've never bothered doing that.