Man's Mistake cost his Children $400,000 of an IRA inheritance. What he did wrong

This is so sad... The VIDEO interview goes a bit deeper, with the message from one of the daughters.
A Great heads up from them...

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Before Leonard Smith lost his battle with cancer in 2008, he worked with his financial advisors and attorneys to make sure his children received the balance of his retirement funds when he died.

A single mistake, however, thwarted his well-laid plans. Family members realized a year after he died that his IRA beneficiary form was filled out incorrectly. Instead of specifically listing the names of his children along with the percentages designated to each heir, Smith wrote: “To be distributed pursuant to my last will and testament,” where the disbursement of funds was spelled out.

But Smith’s failure to complete the form correctly invalidated the document, making his surviving spouse the beneficiary by default.

“I had no idea that a will could be trumped by an IRA beneficiary form,” Deborah Smith-Marez, 50, Leonard’s daughter, told Yahoo Finance.

Smith-Marez and her siblings fought in court to recover the money, but the court awarded the $400,000 in the IRA to their father’s wife, who married Smith two months before he died. (the vile woman gave the children nothing, ignoring their father's wishes and intention)

Like Smith-Marez, many Americans are unaware that long-forgotten beneficiary forms can override wills and undermine their loved ones' intentions.

How does this happen? Beneficiary forms are meant to be a straightforward method for heirs to bypass the probate process and receive funds in a timely manner. But sometimes account holders forget they’ve filled out these forms and fail to update them with major life changes.

Your estate is governed separately from your accounts with beneficiary designations, which include retirement accounts, life insurance policies, bank accounts, certificates of deposit, stocks, annuity contracts, bonds, and mutual funds. So if your last will and testament designates one person as the beneficiary and your IRA designates someone else, the IRA will outrank stipulations in your will.

Americans now store more and more of their wealth in retirement accounts, with $6.5 trillion held in IRAs, and $5.9 trillion in employer-based defined contribution plans like 401(k)s, according to the Investment Company Institute -- all of which require beneficiary forms to designate recipients upon the account holder’s passing.

Unfortunately, there are no automatic reminders to update these forms on a regular basis – the account holder has the responsibility to keep them current and valid.

After losing a loved one, fighting with family over money compounds the emotional toll. To keep this from happening, follow these five tips from certified estate planner Jean-Ann Dorrell:

When is the last time you've updated your financial forms?

(or checked your parents forms??)



Special thanks to Bella Cucina for making this video possible.... v

http://finance.yahoo.com/news/man-s...-400-000-of-an-ira-inheritance-152712809.html

 

Very wise post!

 

Wow, I agree.

 

the "a"s and the "the"'s dont matter till they matter.

 

Excellent post. Thanks for this! Food for thought.

 

that must have been some good head for him to fuck the paperwork.
she was in the office double dick clutching her hubby and the fin-advisor for them to fuck that up

 

For the life of me I cannot understand why these guys (although this wasn't the case here) leave money to women instead of their children, especially if she is not the mother of your children. After you have provided for your child, okay, but in lieu of? I don't get it. And what kind of self-respecting woman would do this to the children of a man she claims to have loved? Casey Kasem's kids are fighting his widow now on some ish like this (although they don't want money, as he left them money while he was alive).

 

I've pondered on this for years....

 

sting and his wfie said they arent giving their kids a dime of thier estate

 

Are they doing this as a variation on Bill Gates' rule about limiting his children's inheritance to ensure that they are productive and accomplished in their own right? With the kind of upbringing these kids should have had in terms of education and access, they should already have a head start in life even without the inheritance.

 

Gates likely got the idea from Warren Buffett, who gave his kids $100,000 each and said, 'That's it. Now go make your own living'.

BTW, he still lives in Omaha in the same 5-bedroom stucco house he bought in 1958 for $31,500...(can you believe it?)

 

I saw that the other day....said he's basically going to spend it all anyhow. ($300 mill)

He also made a great comment about his kids' work outlook...

I think I would cry a little if I was any of their kids though, tbh. I mean c'mon, don't be stingy Pops! :smt109

(I would give my children way more than they are if I had their kind of bank).

 

Of course I can its a gorgeous house and he's only one human being how much room do you need?
The conspiracy theorist in me thinks he has a bunker four times that size underneath though lol

 

1% each would be plenty the rest to charities of my choice or a public orchard like they did in Washington to feed the hungry of that area.

 

Yeah, he loves what he does.

 

i was thinking the same thing

 

From my broke-ass vantage point, the Buffett home is a study in luxury. Not extreme, but very comfortable and well-off nonetheless. And I bet they have had top-knotch educations to boot. They should all do very well. I saw a 60 Minutes spot on Buffett the Elder and the Younger and he was very interested in agriculture and assisting the developing world and rationalizing the agriculture markets. It was a great piece.

 

That Buffet name rings bells. Your dad is the second richest dude on planet earth, that by itself opens untold doors even if he only gives you a 100k. Shit I can think of three firms off the top of my head that would hire them as equity traders without any proof of education or experience lol

 

Bah.

I still think it's fucked up if you're worth millions or billions of dollars to basically stiff your kids, particularly if they've shown themselves to be well-grounded and responsible adults.

Take the Kennedys.

Some of those heirs are fuckups.

But many of them inherited millions from Joe Kennedy and his sons and still dedicated their lives to public service.


Make the kids work for that money by running a family sponsored charitable foundation, but leaving your kid 100K when you're personally worth more than 50,000x that number IMO is a slap in the face.

It's one of the reasons I always felt sorry for Tory(sp) Spelling and her brother. Aaron Spelling was one of the most successful TV producers in Hollywood history and was worth hundreds of millions of dollars when he died, yet his last wife was given his estate and money. Not his kids.:smt022

If you've dedicated your life to making MONEY by selling and trading stocks and other securities and not really building or creating anything, obviously the possession of money itself has a deeply intrinsic value to you.

It's not like Buffett was some Catholic monk who won the Powerball.

And when the one thing that gives your life meaning is somehow too valuable to leave to your children comes across as shitty to me.

It's almost as if guys like Buffett and Gates are transmigrating their guilt for being obscenely wealthy onto their offspring by making them working class.

Almost working class.lol


You're rich. You had kids. Step and don't punish your children for being born to you.

$5 million clear and a house for each one of your offspring when you're rich like Buffett/Gates is too much indulgence??

GTFOH.

 

Or they can look at it like I gave my kids a nice safe home and world class educations not to mention both of those men started out with less when building their companies not to mention the name and connections they made by just being born into those families are worth millions. Like I said there are at least three private equity firms I can think of off the top of my head that would hire the Buffet kids without any experience and give them a six figure salary just to have their names on a letter head because the Buffet name instills confidence.
Parents are obligated to raise their children and teach them how to fend for themselves not set them up for life without a care in the world because that breads weak ass people fam. It's part of why many in the wealthy class are greedy ass hoarders because they've had wealth so long and believe its owed to them. It's interesting to see that those who are self made are usually far more charitable because they some idea of struggle.