Estate Transfer On Demand

This is Michael Carbone with the Truth Network. We're partnering with Bible League International on Open the Floodgates, Bibles for Africa.

In many parts of countries like Kenya, Ghana, Tanzania, and Mozambique, as many as 9 out of 10 Christians are denied God's word by corrupt governments, majority religions, and poverty and remoteness. $5 sends a Bible. $100 sends 20. $500 sends 100. Call 800-Yes-Word.

That's 800-937-9673. Thank you for caring. Hey, this is Jim Graham from the Masculine Journey Podcast, where we explore relationship instead of religion every week. Your chosen Truth Network Podcast is starting in just a few seconds. Enjoy it, share it, but most of all, thank you for listening and for choosing the Truth Podcast Network.

This is the Truth Network. Welcome to Finishing Wealth, brought to you by CardinalGuide.com, with certified financial planner Hans Scheil, best-selling author and financial planner helping families finish well for over 40 years. On Finishing Wealth, we'll examine both biblical and practical knowledge to assist families in finishing wealth, including discussions on managing social security, Medicare, IRAs, long-term care, life insurance, investments, and taxes. Now let's get started with Finishing Wealth. So today on Finishing Wealth, we have an interesting topic for you.

I think you're going to like it. It's called estate payments on demand. Like, oh my goodness. So it's a really neat topic and something that we're going to get into in length, but I've got my certified financial planner Hans Scheil with me today, and we don't want to miss what the Scriptures have to say about along these lines. So in 2 Timothy, which, you know, obviously Paul has explained it to Timothy, you know, some of his last words on how he's going to take over this ministry, you know, one of my favorite verses that he tells Timothy is to guard the good deposit through the Holy Spirit who lives in us. In other words, Timothy, you've been given something very, very, very precious, which is essentially the truth about Jesus. And now you've got to guard that through the Holy Spirit, which is also entrusted to us. And in so many ways, right, we all have estates, even if they may not be significant in your eyes, I guarantee in God's eyes, it's significant. He's entrusted it with you. And he would really like to get that at the point where you finish to finish well, that it would be on demand as quickly as possible for your heirs, right Hans? Oh, yeah. And this whole idea of beneficiary designations, I think our listeners is today I'm going to assign you some work on this show to do because I haven't found too many people that don't have something a little bit out of line in this whole area of beneficiary designations in bypassing the will and probate. Yeah, there's just, it's a beautiful opportunity.

So I think as you listen to this show, there's going to be some really practical ways that you can apply this to your own situation. So you know, go ahead and assign the homework. The homework is going to be to go in and look at your IRA accounts, your 401k account, your 457b account, if you have one of those, or 403b, which are all retirement accounts. And by the way, if it doesn't have a beneficiary designation, it's not a requirement. It's not a retirement account. You know, in other words, all retirement accounts by law have to have a beneficiary designation, because the IRS, they want to collect their taxes, because most of these things, you've never paid the taxes. And so they want you to pass this on to somebody, and then they're going to collect the taxes from them. They're going to get the taxes from some good anyhow, the beneficiary designation, it's there. And for many of you that are kind of in the age where you're talking to me or in your 50s or your 60s, and you've worked somewhere for a long time, you haven't looked at this thing since you first went to work many times. Now, many people are sharp enough that they when they leave work or something happens in their life, they change it.

But this is only part of the homework. So IRAs, 401ks, 403bs, 457s, all those retirement accounts, then you go to your life insurance policy. Every single one of those has a beneficiary designation on it. You made it when you bought it. And like most people, there aren't a lot of people that change their beneficiaries.

People buy it young. I know I've changed mine four or five times. I mean, I bought some policies before I was married. And when I got married, I changed it, put her on there as the beneficiary. And then when I started having children, I'd add them as contingents, and so on and so forth.

So life events have something to do with this as you evolve through life. And then annuities, you know, any type of annuity, it's got a beneficiary on it. Like I said, your life insurance policy. And then most financial accounts, they don't have a beneficiary designation by exactly that term. They have a thing called TOD, or transfer on death. And this is one of the most underutilized features on financial accounts. I mean, my experience has been that most accounts have that availability. But it wasn't exercised, because when you open an account at the bank or the stock brokerage or the institution, you know, there's just a form there.

And most people go in and open them in a rush, and they just want the stuff and get the money in there and get out of the bank. But there's a whole section you can skip, and it's called transfer on death. And you can put down a person that if you die, that money is going to go to them. It works just like a beneficiary.

So the homework after we convince you to do this, and that's really what the show is about, is going to be to get all of those things out. You can get them off the web if you've got online access. You can call the people.

You can get out your policies if you've got your policies stored somewhere. You can get every single dollar that you have on deposit somewhere and look for the beneficiary designation, and then get a copy of it, and then lay them all out beside each other across the table and see if they're all the same. Yeah. It could be a real eye-opener. And clearly, I guess four years ago, somebody had told me something about probate. I thought that those were those rubber worms that the big bass fishermen used. I didn't know what probate was. Yeah, probate. But I found out on my father's death that, wow, this is a significant term. And so just to put some story behind what we're describing, so my father did have some of these transfers on death, and he did have beneficiaries for his IRAs. And so I watched, and he had life insurance.

And so I watched as these things went down. And just to give you a timing on it quickly was that the stuff that was transferred on death or the stuff that was done through beneficiaries, all that money was transferred before a month was out. And of course, they'd locked down all his other accounts, including his checking account, because they were, you know, what his Social Security was coming in and out of that.

So that got locked up. And it didn't have a transfer on death. And so that went into, as well as his other assets, probate. Well, the probate, literally because of taxes and a number of reasons, went on for over a year. So those things that my siblings got, the money distributed, you know, early on that were transferred on death or that were on, you know, the beneficiaries, that all went fairly quickly, with the exception of one life insurance policy, and I'll get into that in a second. But everything else, when it went to probate, it was well over a year before that money was distributed to, you know, my siblings, which again, the name of the show we talked about was, you know, transfer on demand of your assets, right, to get this stuff out as quickly as possible. And oh, by the way, if it goes through probate, everything that went through his estate, that's all taxed. As opposed to the other stuff that was outside of the estate before the probate process, all that stuff went straight out to all his beneficiaries and the transfer on death and never went through the probate process. And so you had that. And then there was the life insurance policy that unfortunately, you know, Hans and I hadn't had a chance to get to him on that one. Because it had a beneficiary of his deceased wife was the primary beneficiary and the secondary beneficiary was a trust that had actually never even been started.

No account had ever been set up. So, you know, there began a long process of working through all that. And again, you know, having Hans there where I could talk to him and doing all that was involved.

We got that straight eventually. But oh, my goodness, if we'd have had all the homework done, then that whole idea of, you know, on demand, like, as soon as possible, after I pass, I want, you know, people to have those resources in their hands rather than them waiting on going through all these processes, right, Hans? Well, yeah. And so I'm thinking that when we get into the homework here, and you go get that beneficiary designation, or the beneficiary statement, whatever you want to call it, from all these different accounts, and you get it so you can print it out, or you can just look at it, or save it or do something, then you also want to ask the institution or find it online, a change of beneficiary forms. These things are so easy to change.

You don't need somebody like me to change it. I mean, if anybody wants to call me and have me help them with this and do estate planning, but this is, this is simple stuff. It just asks you, who do you want this money on this account to go to when you die?

That's it. You just put their name and a lot of times they're going to ask for their address, phone number, cell phone number, social security. And if that becomes a stop sign to you getting it righted, just send them in their name and address and just skip the social security number.

They'll find that after you die. I'd much rather have that than a wrong beneficiary form. Does that make sense? Oh, yeah.

Yeah. And so, so the one thing that I find in a lot of people that we bring them in for financial planning, because we do this for people, it's just part, we're looking at all this stuff anyhow. And they, they, they just have inconsistencies. They have, you know, maybe they got divorced or they had a, like your father, they had a prior spouse passed away before they did and they never changed the beneficiary.

You find all kinds of stuff in there. And so, so the answer to this really is get them looking like you want your will to look. And, you know, I can speak like when I'm bringing in new clients and I start talking to them like I'm talking on the show and then a lot of people shut me down. Oh, we've got all that taken care of in the will. Let me tell you how that works. Is it my son's getting this and my daughter's getting this and, you know, I'm just sitting there thinking and, you know, they're going to be probating that will about a year after you're deceased. And that money that's in accounts with the beneficiary is already going to go to who you named 30 years ago. And it's going to be gone and passed on according to however you put down 30 years ago. And that will sounds fine and good. Some of the stuff's going to work out that way. These things are two separate deals.

Right. Which is just like a critical understanding that the probate, the will, those things are essentially a legal process, right? Versus a financial, what would you call the other word, you know, where the money is just financial instrument is in a contract and it's a matter of the contract, the transfer following your death. So one thing is private, nobody can see it and it just goes on and it just goes to the contract and the change of beneficiary form or the original beneficiary form is part of the contract. And so just as a matter of the contract person's deceased, money goes to the beneficiary. It's that simple. Wow. And you can see we got a whole, we're loaded for bear today on Finishing Well, which again is brought to you by cardinalguide.com where you can get Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement.

You can get it absolutely free. Just email Hans, but we have so much more information and you know, we've already told you the homework, so we're not going to add any more homework to what we got, but we give you some more ideas on how you can get on demand estate transfer when we come back. Hans and I would love to take our show on the road to your church, Sunday School, Christian or Civic Group. Here's a chance for you to advance the kingdom through financial resources by leveraging Hans' expertise in qualified charitable contributions, veterans aid and attendance, IRAs, Social Security, Medicare and long-term care. Just go to cardinalguide.com and contact Hans to schedule a live recording of Finishing Well at your church, Sunday School, Christian or Civic Group. Contact Hans at cardinalguide.com.

That's cardinalguide.com. Oh, welcome back to Finishing Well, and today we're talking about on-demand estate transfer. So, you know, when it comes to Finishing Well, like here we are, this is the last stages of, you know, essentially my estate and what's going to go out there and my stewardship of that. You know, Hans, there's some horror stories that go along with this whole beneficiary designation, right, if we don't do our homework?

Oh, there are. I mean, one of my buddies, he's a golfing buddy, he's a little younger than I am, and he's very interested in the work I do. He listens to the show all the time and watches the show on Facebook where we put it out there, and so he's really interested. And I've kind of gone through the show within the context of his father, because his father's about my age. I've never met him, but so he's telling me this story a few months ago about his dad, that his dad's wife passed away. And I'm guessing she was in her 50s, and she brought into the marriage two daughters that are his, that are Phil's stepsisters. Phil's dad has pretty much taken care of these young girls, or taken care of them as daughters, and now their mother's deceased. And Phil was just telling me that when the mother died, there was a life insurance policy that paid off the ex-husband, or the estranged dad, this woman's first husband, because he was the named beneficiary on a life insurance policy that had never been changed. You know, Phil wasn't really asking me what to do about it, he was just telling the story.

He's smart enough to know that there's nothing can be done about it. So essentially, this lady had been married before, left her ex-husband, actually just left her ex-husband, actually just left him, and left the daughters, and all that stuff. And he ended up with the money, and he kept it?

Oh yeah. I mean, apparently this was an ugly deal, and the daughters and the woman, I mean, I just, you know, things, they just hadn't seen him in years, but she dies, he gets the money. And because the beneficiary, she'd been paying the premium, or both of them had been paying the premium, she just had this life insurance, she just never thought about it.

So, you know, you can go through this, and you can talk about all these bad things, and he's gotten beyond it. And then Phil was just saying that his dad is taking care of these girls, and I think they're in their early 20s, and they're, you know, whatever. And so, I looked at Phil, and I said, you know, we've been talking about your dad all along, and I said, I'll bet you some money right now, that if you can get every beneficiary form that your dad has out on a table here, and you could print them out, including his life insurance, I'm going to bet you we could find some inconsistencies, or somebody placed that he's got the wrong person put down, or something, Mark, where he was giving it to you and your brother before he met her, or something, or he put her down.

Well, obviously, if you put her down, and now she's deceased, you know. So, anyhow, I was just making the point that all kinds of people are sitting on this problem, so much so that I'm willing to bet anybody that I'm going to probably find it in their situation. So, that's how urgent this is. All right. So, you know, I got a 401k that I started clear back when I, you know, 30 years ago, before Mariah was born, and my other children were born. You're saying I need to get that thing, and look at the benefit, because, you know, oh my goodness, you know, I would hope that her brother and sister would be fair with her, but it'll be distributed, you know, and that's the way it's going to go. Well, yeah, and we just did your will, and your powers of attorney, and all that kind of stuff for both you and your wife. You just did all that. So, it'd be real easy if you weren't really thinking, so, well, I just did all that. I took care of, you know, all that you know, all that stuff is up to date.

Well, yeah, it is, but it's not going to matter when beneficiaries are paying off, because it's going to go by the form from 30 years ago. So, that's why I'm telling you folks. Let's go to another story real quick. So, a lady got in touch with me about her mother's life insurance policy that we sold her, and she was really like, man, I'm really happy that she got somebody, you know, like a real person that was interested in her, and she knew that we only had the one company's policy here, and I said, well, I'll tell you what, I'll help you with all the policies.

I mean, I just, you know, and I'm real good at giving up my people that work for me's time, because I delegate a lot of this, but it's my time, and so we're going through, I just wanted to help the lady. So, I said, let's get out all the policies, and then we'll call some of these companies together, and I'll get them straight on helping you. So, we get down to the company where we sold her the policy, and, well, I can go ahead and say what their name was, Mutual of Omaha, who's a very modern company, and I was kind of a little upset, because I was on the web trying to find a claim form, and I just couldn't find one anywhere, and I thought, that's odd, why are they making it so hard? So, anyhow, I called the number, I got on a recorded line with the lady, she was so helpful, and she said, we had my client, or really my client's daughter, who's the beneficiary, on the phone, and the lady started taking, she said, now we're on a recorded line, let me take some information from you, and because the policy was two years old, or more, so the policy, I think, was about five years old, she didn't even ask how she died, none of that, because once a life insurance policy is two years old, it's incontestable. So, when a life insurance company is just very easy for them very easy for them to pay off, because they couldn't get out of the claim if they wanted to, and then she took a little bit more information, and she said, I need to put you on hold for a sec, and I thought she was going and talking to a supervisor, she was going into Google, and looking up an online obituary for my client's mother, or for this lady's mother, and then she came back after a couple minutes, she says, we've just verified this through an online obituary, so we're going to be sending you the payment, the claim's approved, and she said, do you have banking information where we could draft the money to you?

Lady gets out her checking account, gives her the checking account number, and I mean, the money was in there, you know, a day later. I mean, how cool is that? That's right, I mean, that's the whole, right, on demand, like estate transfer, there you go. And it was just, it was just really something. And so, you know, we got that. And, you know, I just wanted to make the point to the whole crowd here, that when I'm, you know, quote, selling life insurance, and I've been doing for 45 years. You know, I was taught something is really, this is where we're going to start is on the beneficiary. I mean, we're going to get the client to sit down with me and say, okay, what do I want to happen money wise at my death?

Okay. And we're going to, you know, who do, how much money do I want to have available to my heirs, to my children, to my spouse? And then how do I want that divided up?

What does that look like? And some people want to give gifts to the church or to their nieces and nephews. And with the stroke of a pen with life insurance, we can sit down and fill out this beneficiary form. That's the first part of the application. And then we can work our way backwards to see how much insurance we're going to buy and what kind of insurance and from what company but it makes the whole life insurance buying process more meaningful to start with the real effect of life insurance, which is creating a whole bunch of money at death. Darrell Bock That's right. And, you know, clearly, when you're thinking about it, and recently, I read this that, you know, blessed is the man who leaves an inheritance to his children's children, that you can even begin, like secondary beneficiary designations to your grandchildren.

Robert Chisholm Oh, sure. You know, and so a contingent beneficiary and a secondary, I mean, they call them contingent beneficiaries today and as opposed to a primary beneficiary. So if you buy a life insurance policy, Robbie, and you name your wife as the primary beneficiary, and then you as the contingent beneficiaries, okay, the only way your children are going to get anything out of this is if your wife is deceased, the primary beneficiary before you die, because if you die, and she's alive, she gets it all. But if you die, and she's gone, then the contingent beneficiaries just all step up into her spot. And they actually become the primary beneficiaries. That make sense?

Oh, absolutely. And so actually, this isn't something just on your life insurance, this same formula, so to speak, works on your IRAs and your other financial instruments, even that the transfer on death statements that you're doing? Robert Chisholm Well, yeah, well, people have moderate middle, even some of the higher middle people, you know, they want us to do estate planning. And, you know, a lot of people are gonna say trust, put it in a trust, you'll avoid a probate, and they're real expensive. Look, we can sit down with beneficiary designations, and just about everything but the house and the cars, we can pass through beneficiaries. And then you're still going to have to have your house pass through a will or through probate. I mean, there's some ways to deal with that, too, is you could put your kid's name on the house, which I don't necessarily recommend. But anything that's in a financial account, which is that there's a way to just avoid the whole will and probate.

Darrell Bock Right, which is avoiding a lot of time and a lot of issues. And, you know, not to mention estate taxes. Robert Chisholm Yeah. Now, the estate taxes that you're talking about are like the county taxes and the state. I mean, this is not an issue of income tax, because if you have income tax due on a financial account, like a retirement account, somebody's going to have to pay that even if it passes by beneficiary. And I think what Robby's referring to is by avoiding probate, because the county down there in the clerk's place, they got their hand out. Darrell Bock Oh, yeah, they do.

Robert Chisholm And they absolutely do. And they have fees, they don't always call them taxes, but there's money coming out of there to get things processed through the probate court. And then you got to pay an executor and all that kind of, this doesn't have any of that. This stuff just goes straight to the people.

Darrell Bock Yeah. And I mean, it's everything from your checking account, your savings account, right? And so part of the homework is to actually take a look at your checking account. Do you have a transfer on debt? Take a look at your savings account. And any other financial instrument, because again, those are transferred, as you mentioned, by contract, you know, not through a legal process.

Robert Chisholm Yeah. So and, you know, we've mentioned earlier beneficiary change forms, you can just go get those just by downloading them. And you know, if you have trouble finding one, we can use one from another institution and just white out their name.

They're pretty much standard. And just just fill it out, write out the policy number, and we can send that into them. And if they don't like it, my guess is, is they'll send you back one of their forms. So you know, I have a lot of experience doing this.

We do this for a lot of clients where we don't necessarily move their money, a lot of elderly people, but we get all this stuff straightened out when they're, you know, when they're retired and counting on us. Darrell Bock Right. So what an opportunity we have to line up our state so that it's easy for everyone and it goes to where, you know, God would have it go.

So pray about this and consider doing your homework. Again, this is Finishing Well with certified financial planner, Hans Scheil, brought to you by CardinalGuide.com. And thank you, Hans, another great show. Hans Scheil Thank you. Darrell Bock This is the Truth Network.