What would you do?

[Thrifty Ray]

This actually happened to a friend of mine a while back and I've always wondered how others would have handled it...

Jennie received a call one day that she was named beneficiary on 1. a 401k and 2. a life insurance policy. Each were worth about $50k.

However, the person who named her as the beneficiary did so 18 years earlier when they were attending college and living together. Jennie had since married and had two school aged children. She had just divorced her huband and was trying to start a new life for her and her kids. However, she hadn't spoken with the person in over 15 years.

While he had never married, he did have elderly parents...he had simply forgot to ever change the beneficiary...He was only 40 when he died- of cardiac arrest while jogging one day.

If you were in Jennie's shoes, what would you have done? :

[Firefly]

Re: What would you do?

Given most of the money to the parents. Kept a small portion for myself due to recently being divorced and needing to get back on my feet.

[Lori63]

Re: What would you do?

Given most of the money to the parents. Kept a small portion for myself due to recently being divorced and needing to get back on my feet.

definitely

[sweeps]

Re: What would you do?

I'm not a lawyer, but it seems the parents would have a strong case if they sued for the money.

[Ima saver]

Re: What would you do?

First of all, do the parents even need the money? If she is going thru a divorce and has kids, she might need the money.

[Thrifty Ray]

Re: What would you do?

Well, here is what actually happened....

Jennie was completely shocked about her long ago friend's death. She had known his parents from those college days. So she contacted them and went to visit.

They sat down and talked about the money...and the parents said that, even though it had been 18 years, their son had occaisionally wondered out loud how Jennie was doing....
So, the parents felt that he probably would have wanted Jennie to have the money. Jennie ended up keeping one and signing one over to his parents.

Jennie went on to buy a beautiful home in a city where she was able to get a great job...and got her new life off to a very successful start. This was about 15 years ago...and she has paid that house off- which has tripled in value and built a nice little nest egg.

Moral of the story- You should evaluate your beneficiary options every couple of years (if not yearly) to make certain that the people you want to take care of are taken care of...life is fragile, and you never know....

[Ima saver]

Re: What would you do?

That is a very nice ending, Jennie should feel proud of herself.

[Snoopy2645]

Re: What would you do?

Thats just what I was thinking I would give half to the parents & keep half. Although I am not sure what other people would do I know for a fact from my own family matters people get GREEDY when it comes to money & DEATH sad but it is so true in my family

[tgavin71]

Re: What would you do?

I am pleased that everyone was happy with the outcome. Although as a parent you would rather have your child than any amount of money.
My husbands family is also money obessed. My husband is 38 his grandfather died when he was 3. There are still arguements about his will.
His wife is 85 and for years there has been tension between the 3 daughters about who will get what. It is disgusting. They even fight about stupid things like cutlery. WHen my husband informed me that because we lived closer to Nanna we would be able to get there first to pick out the good stuff when she died I told him that if they did occur when he came back the kids and I would be gone. Thankfully he is ashamed of his behaviour and for the first time can see what it is really like.
The more money involved the worse cases like this become.
In this case Nanna estate has an estimated worth of just over $8,500 000. Thats US.

[Thrifty Ray]

Re: What would you do?

oh....I was so there one day!!! My husbands grandfather had passed away, and the kids decided it was time for grandma to go into 'a home'....

So, with grandma sitting there, all the daughters and DIL's took a number...then they went through the rotation OVER and OVER again until everything was divied up....the argued over tupperware...now mind you, most of them could have easily bought 10 sets each...and given some to the grandaughters (not me, I wanted nothing to do with it)---there were two there that REALLY needed it...but no, they were too busy fussing with each other..

..after about 5 minutes of watching what was going to be an all day event...I stood up and told my husband- NOPE, I am NOT staying for this....poor Grandma, she gathered a few small things on the sly and handed them to her grandaughter who was a single mom.... a couple days later she gave me a sweet cow cookie jar that she had 'hid' before it started...

UGH...I had never seen anything like it...

[cercis]

Re: What would you do?

Why assume that he hadn't made a conscious decision to leave the beneficiary as is?

The parents would have no legal argument to prevent her from getting the money. Now, a spouse would, but not the parents.

I would probably have done what she did, but I wouldn't assume that it wasn't his choice.

Let me interject a little legal knowledge (with the disclaimer that I am not an attorney). If you name a beneficiary on your IRAs, CDs, bank accounts, etc, your will cannot dictate how that money is used. That money MUST go to the named beneficiary. So be extremely careful who you name as your beneficiary. Same for assets held in joint tenancy.

Now, there are issues in community property states and the laws will vary there, but not much.

[Thrifty Ray]

Re: What would you do?

Great point about the beneficiaries Cerci...I worked in IRA's for many years....and there were times when an owner died and had never taken an ex-spouse off as the beneficiary, leaving such an unhappy mess to be weeded through by loved ones. (and in alot of cases, left loved ones hands tied and there was nothing that could be done.)

It is so important to keep an eye on beneficiary designations.