Inheritance Theft from Charity

[ryanf1475]

What is the name of your state? NJ

Quite frankly, my family is not made of great people; that's why I'm leaving it all to charity. But I am concerned that after I die, there may be some funny business on my brokerage accounts (both individual and IRAs), either before they notify my broker of my death, OR, maybe they will just never notify the broker, hoping that they die before it comes back to them. Is there any way to prevent this? What would happen if the broker discovered activity on the account AFTER the time of death noted on the death certificate? What incentive does the broker have for trying to recoup that money through what is probably a complex and costly legal process? (I understand that beneficiary designations override what's stated in a will, so I don't think this has anything to do with "choosing a trusted executor" or anything like that?)

I say this because when my granny died, she had an elaborate estate plan. However, nothing ever went to probate. The executor just divvied up the money as she saw fit, and nobody did anything about it.

Thanks!
Ryan

 

[Taxing Matters]

Don't let any of your relatives whom you do not trust have any of your online account names, passwords, etc. If those relatives don't know abouot the accounts and don't have the passwords then the accounts will be safe from any attempts they might make to get the money by trying to log in as you and empty the accounts.

If you use the brokerage's designated beneficiary form and name the charity as the beneficiary the broker won't give the money to anyone else unless presented a court order. Tell the charity of your plans to leave it the investments in the account so that the charity can be prepared to claim the accounts after you die. If you have a will or trust tell the executor/trustee you appoint to notify the charity. Although those investments will not be part of your probate estate the executor may still need to know at least some of the information about the account in order to complete final tax returns for your estate. Any income you earned on the investments before death would be reported on the final income tax return the estate files for you. If your state has an inheritance or estate tax, the executor may also need to know the total value of the accounts on the day you died to file the inheritance or estate tax returns.

Obviously you want to appoint executors and trustees whom you trust to carry out your wishes. I suggest you talk to those people before you die to be sure they are willing to do the job and are aware they've been nominated/appointed to those roles and so they'll know they need to act once they learn of your death.

It might be worth consulting a probate attorney for some help to make sure you don't overlook anything else you can do to lock down the accounts and that you've not left some back door open that they could exploit.

By the way, there are people who have relatives they adore who nevertheless leave most of their stuff to charity. It doesn't mean that they love them any less, only that they want their assets to do some good for others who are less fortunate. So whether you've got good or bad relatives, you shouldn't have to feel like you need to justify your decision to any of them. It's your assets, and you should do with them what makes you most happy.

I tell clients who do have a good relationship with their relatives to inform their relatives of their choice and that the choice does not reflect in any way how the client feels about them. That way when they die the surviving relatives won't be left with a lingering feeling that somehow the client really didn't care much for them because the client didn't give them anything.

But in your situation where you don't trust your relatives, the less they know about the assets you have and your plans, the less chance they have to scheme to get some of it.

 

[ryanf1475]

thank you, that helps a lot!