Listing Asset (Investment Acct) in Will

[24601NoMore]

Working on our Wills, and have a financial institution that does not support listing TOD beneficiaries (unbelievably) on a joint account. So, we need to cover how that account would be distributed across our two families in the event we both are deceased.

For a scenario like this, how would we list the account in our will? Do we need to say "Money Market account #123456 at XYZ company"? It's a good chunk of $$ so want to make sure it isn't just lumped in with the rest of our "estate" and the instructions for these funds are unambiguous and crystal clear to all. I'm not super comfortable listing account numbers in the will, but not sure how else you'd describe the asset.

I have all of our other non-retirement accounts set with TOD / POD beneficiaries to keep the $$ out of probate, and am astounded this company can't / won't do it. (They insist the only way to designate intent for inheritance on a joint account is via a will or trust, neither of which we currently have). The obvious answer would be to transfer to a company that does support TOD / POD on joint accounts, but I'm getting a yield on the $$s that I can't match elsewhere and also have some post-tax funds that I don't want to swap out for another company's funds..the other option is to split between "his" and "hers" accounts and then have POD/TOD beneficiaries, but it's OUR money not "his" or "her" money and that then creates different issues. Frustrating, to say the least, as this is the ONLY company out of all the companies I deal with that won't do TOD/POD on joint. UGH!!

Thanks for any and all help..

[pb4uski]

I'm guessing that it is Vanguard as I have run into that with them.

You have the two options that you wrote in the OP.

Another option would be to split the joint account 50/50 into two separate individual accounts and name the surviving spouse as the primary beneficiary and the people you want as contingent beneficiaries... effectively sidesteps their policy in a clunky way.

[24601NoMore]

Yep - it's Vanguard. Can't match the yield and liquidity that I get with Prime MM anywhere else, and have some other VG investments that I want to keep. Frustrating beyond words and I've gone round and round w/VG on this, including escalating to managers and have gotten basically nowhere. They are the ONLY company that won't do beneficiary on joint accounts. Unbelievable. I've actually considered moving the funds to Fidelity or somewhere else, but it makes no sense to have VG funds at Fidelity (Fidelity like everyone else supports beneficiaries on joint accounts) simply to get around this issue, and I'd then have the other problem of $49 per transaction fees also, where it's obviously fee-free at VG to move those funds.

I really don't want to split the joint account into two individual accounts as it's not "my" or "her" money, but OUR money. Plus, while it's conceivable to split the MM fund, splitting the investment funds would mean two of each - or, some of the funds in hers and some in mine. Basically, a nightmare to administrate as some of the funds pay regular dividends, so I'd then need to entering and tracking dividend and cap gain info 2X what I do now. Crazy!

So, assuming I want the funds covered by the will vs POD/TOD..do I need to list "VG Money Market Fund Account #123456", VG fund X Account #Z" in the will, or how do I specify the assets to be divided between the two families?

[pb4uski]

I decided not to sweat it. It would only create a problem if the two of us were to die at the same time and that is a small probability. More likely is that one or the other of us will die and the joint account money would be transferred to the surving spouse's taxable account which already has beneficiary designations.

As an interim solution, describing in detail how you want the balances in those accounts treated in your will might not be as helpful as you think, because a joint account will automatically go to the surviving spouse should one of you die... in other words if it is a joint account it is outside probate by default and wouldn't be included in your will.

https://www.nolo.com/legal-encyclope...hapter1-3.html

[Alan]

We had 1 Vanguard joint account that we decided to split into individual accounts for other reasons. The account is in my wife’s name with me as the primary beneficiary and our 2 children as the secondary beneficiaries. We also did agent authorization on all our Vanguard accounts (we also have IRAs) so we both have full access to all our Vanguard accounts.

[Souschef]

We have a loose leaf binder given to us when we did our estate planning. In the front cover There are 3 pieces of paper. One has all my passwords, The second is a listing of all our accounts including account numbers, institutions with addresses and phone numbers.The third is a list of all the liquid assets and who the beneficiary is on each one.

[OldShooter]

Quote:

Originally Posted by 24601NoMore Working on our Wills, ...

Without professional help? Bad idea IMO. As a % of most estates here, my guess that a competent and professional estate plan will be a very small number. Ours is under 0.1%. Very cheap insurance, as you cannot correct errors after you are dead.

[Souschef]

Quote:

Originally Posted by OldShooter Without professional help? Bad idea IMO. As a % of most estates here, my guess that a competent and professional estate plan will be a very small number. Ours is under 0.1%. Very cheap insurance, as you cannot correct errors after you are dead.

Agreed. Ours was about $400, including advance directives, POA for health and financial, and pour over wills, all in a neat indexed binder.
That way we are assured all the documents are specific to our state..

[24601NoMore]

Ha - you guys got a great deal. I was quoted $6,500 - $8K for a Trust and $2K for a will. I obviously need to shop around more, but I don't have either amount in my budget for sure, nor do I have enough time before an upcoming trip to get everything completed..

[24601NoMore]

ETA - having POD/TOD beneficiaries on literally every other account we have, VG's obstinance on this basically means I have to create a Trust or a Will to cover our joint investments with them. That would be the single reason I'd need to do so as everything else we own has clear, unambiguous inheritance via POD/TOD.

I'm thoroughly annoyed with VG on this and believe they are being totally unreasonable. If I was able to live with less yield or liquidity on something other than Prime MM and could find "comparable" investments to my other VG funds, I'd move in a heartbeat - I'm that frustrated with them. That said, I also can't cut off my nose to spite my face either and give up Prime MM yield or allocation to VG funds that I can't buy elsewhere without TX fees that I don't pay at VG..

[SecondCor521]

Quote:

Originally Posted by 24601NoMore For a scenario like this, how would we list the account in our will? Do we need to say "Money Market account #123456 at XYZ company"? It's a good chunk of $$ so want to make sure it isn't just lumped in with the rest of our "estate" and the instructions for these funds are unambiguous and crystal clear to all. I'm not super comfortable listing account numbers in the will, but not sure how else you'd describe the asset.

This is of perhaps incidental help, but when my Mom passed away, we had to file some estate paperwork listing accounts and values, including an account at Vanguard.

Like you, we were not comfortable listing full account numbers, so what we did, which the attorney approved of, was to list it as a Vanguard account, with Vanguard's mailing address (PO Box 2600 Valley Forge or whatever), and the last four digits of the account number: "Account #******1234"

If you chose to list it in your will that way, I think that would work. It would create a new worry to me that you might subsequently move some or all of those assets from that account into other accounts and possibly creating an ambiguity about the intent of your will. However, since you seem certain that you'll leave this account at Vanguard, maybe that's a risk worth taking.

[gwraigty]

Quote:

Originally Posted by 24601NoMore ETA - having POD/TOD beneficiaries on literally every other account we have, VG's obstinance on this basically means I have to create a Trust or a Will to cover our joint investments with them. That would be the single reason I'd need to do so as everything else we own has clear, unambiguous inheritance via POD/TOD. I'm thoroughly annoyed with VG on this and believe they are being totally unreasonable. If I was able to live with less yield or liquidity on something other than Prime MM and could find "comparable" investments to my other VG funds, I'd move in a heartbeat - I'm that frustrated with them. That said, I also can't cut off my nose to spite my face either and give up Prime MM yield or allocation to VG funds that I can't buy elsewhere without TX fees that I don't pay at VG..

I'm no fan of Vanguard. If my husband's 401k weren't with them...Anyway, there's nothing sacred, IMO, about Vanguard. Even though unlikely you'd both leave this Earth at the same time, I agree with your concern. My husband and I have our kids as contingent beneficiaries on all of our financial accounts, including joint.

In the meantime, I don't think you have to list the account specifically in your will. The will is meant to catch anything that doesn't have a specific beneficiary designation. You can make sure you have a list of accounts, or copies of account statements, so that your executor/contingent executor will know of them. Label the TOD accounts as such, and this one needing probate as such.

After you've met your immediate need in this, take the time to review your options with Schwab/Fidelity/TDAmeritrade. I guarantee you'll find something close enough to meet your needs. It's easy enough to transfer assets to an account elsewhere, wholly or partially.

[OldShooter]

Quote:

Originally Posted by 24601NoMore Ha - you guys got a great deal. I was quoted $6,500 - $8K for a Trust and $2K for a will. I obviously need to shop around more, but I don't have either amount in my budget for sure, nor do I have enough time before an upcoming trip to get everything completed..

Yes, that sounds quite high. But even if you can't do better and still get a competent specialist, my recommendation doesn't change. This is tricky stuff. DW was an SVP and business unit manager at a megabank trust department and she frequently came home with horror stories, including with documents drafted by non-specialist attorneys. It was not uncommon for her to have to go to court to get a mess straightened out. The cost of that necessarily comes straight out of the estate.

[24601NoMore]

Quote:

Originally Posted by gwraigty Anyway, there's nothing sacred, IMO, about Vanguard.

There are several things that I find compelling about VG including Prime Money Market. It's very tough given VG's focus on super low expenses to find a comparable MM (or Online Savings) rate anywhere - and I've checked lots of times..I can find higher CD rates, but then you give up liquidity..

Also VTMFX which is a heck of a solid, tax-managed balanced fund for after-tax $$s. I'm not aware of a good alternative to it, and it's consistently in the top quartile if not the upper 10% of all funds in it's class..ditto VTMSX for tax-managed small cap. Then, there's always Wellesley and Wellington that are very compelling but we're covered on those as they're in individual IRA accounts..

[24601NoMore]

Quote:

Originally Posted by OldShooter Yes, that sounds quite high. But even if you can't do better and still get a competent specialist, my recommendation doesn't change. This is tricky stuff. DW was an SVP and business unit manager at a megabank trust department and she frequently came home with horror stories, including with documents drafted by non-specialist attorneys. It was not uncommon for her to have to go to court to get a mess straightened out. The cost of that necessarily comes straight out of the estate.

Yes..understood..but our situation is very straightforward - no divorces, children we wish to disown , etc. I can't imagine a more vanilla scenario actually..and NOLO and others do seem to have viable DIY solutions that aren't $2K+..

I read a pretty good article on how many attorneys are basically doing the same thing that NOLO, LegalZoom and others do - they collect the info from you, have a paralegal enter it into their own software package, and the docs get generated from there. So, while the attorney does (hopefully and in-theory) review the generated docs, there doesn't appear to be anything that's significantly different from DIY with software that generates docs compliant with the laws in your state.,.

I did have an experience last year with an attorney that we paid a reasonable fee to for review of a property purchase offer. Turns out he probably never even read the docs I gave him, as we wound up pulling the offer and he found AFTER we were walking away from the deal that something in the doc regarding escrow was not stated properly. To this day I'm convinced he charged us for the review and never even did the review..if he did, he sure didn't do a good job as he later told us that what was in the doc would never fly..thankfully it was all void at that point anyway since we bailed on the purchase..

I wouldn't mind paying an attorney a "reasonable" fee to do this, but the fees are IMHO not reasonable for what they are doing ($2K for such a simple will is not reasonable in my opinion and $6-8K for a trust is just ridiculous) and the bigger issue is that I need this all completed faster than it seems any attorney can complete it all..we plan to circle back on this after our trip and do it all "right" but in the meantime need to make sure the basics are covered, just in case one of the tiny little planes we're going to be on has an issue staying airborne - or God forbid, any number of other things were to happen..

[OldShooter]

There are many things I have done and do for myself. Important legal documents do not fall into that category for me. Obviously, YMMV. Its your decision.

The good news is that if there are problems you will never know.

[24601NoMore]

Appreciate the concern and good advice..

What I probably didn't mention is that I spent 25+ years writing very complex legal contracts for Fortune 500 companies in my w*rk. This involved working with attorneys at well-known F500 companies with household names trying to tear my work apart and rip me to ribbons - which they never succeeded at. So, in short - I get it. This is what I did for a very long time..

I'm extremely confident in my ability to take a basic will from any of the online sites or PC apps and review it to the point I'm confident. Not as confident in the whole trust aspect, as I don't pretend to to understand all the ins and outs of trusts - but am also convinced we don't need that. But based on writing literally hundreds of contracts for F500 companies over the years..if I can't write something that is equal to what an attorney is going to OVER charge me (by 10X), something is seriously wrong with my professional experience..

In short, while I appreciate the concern, you guys are going to have a very hard time convincing me that an attorney is going to have some magic pixie dust that is going to materially impact the net result of a will. In the end, these are comparatively simple unless you have some wonky personal situation, which we don't. I simply don't believe it, and $2K to spend an hour with me and have a paralegal put a bunch of data into an app to generate a template-based doc that they then give me is simply not worth $2K+.

[pb4uski]

Quote:

Originally Posted by 24601NoMore There are several things that I find compelling about VG including Prime Money Market. It's very tough given VG's focus on super low expenses to find a comparable MM (or Online Savings) rate anywhere - and I've checked lots of times..I can find higher CD rates, but then you give up liquidity.. Also VTMFX which is a heck of a solid, tax-managed balanced fund for after-tax $$s. I'm not aware of a good alternative to it, and it's consistently in the top quartile if not the upper 10% of all funds in it's class..ditto VTMSX for tax-managed small cap. Then, there's always Wellesley and Wellington that are very compelling but we're covered on those as they're in individual IRA accounts..

FZDXX is pretty similar to VMMXX.... and do you really need the added liquidity compared to short CDs?

[PatrickA5]

This was one of the (more minor) reasons we changed everything over from VG to Fidelity earlier this year. All of our retirement accounts were in VG Lifestrategy funds which we moved over "in-kind" (for no fee). You might check and see if your funds can be moved over. The only problem (which didn't apply to us) is if you want to ADD to your funds, you'll get charged the fee. But, there are plenty of good low-cost Fidelity funds if we wanted to add money.

As pb4uski pointed out above, FZDXX is pretty close to VMMXX - which is what we have our money market money in at Fidelity. The process was extremely easy - taking a little over a week to move everything (4 IRAs). We actually went to our local office to open up the CMA account just to get an idea of what a local office has to offer. Very pleased.

I made the same calls to VG as you did. They never gave me a good reason other than "you need a Will to do that". Stupid.

[PatrickA5]

You could probably use Nolo's Willmaker and get what you want. I don't recommend it necessarily, but I did use it to do Wills for my daughter and SIL. But, they were very simple situations.

Are you wanting your VG account to be distributed differently from other assets in the Will? If not, I'm not even sure why you would want to split it out in the Will?