Designated ‘Drivers’ — 4 Lessons Learned

 Your best laid plans can quickly go awry if your beneficiaries are clueless.

For the past several months, I’ve been dealing with the disposition of my late mother’s estate. In the overall scheme of things, it is neither large, nor particularly complex. As I’ve noted before, Mom did a solid job of not only managing her finances while alive, but in terms of making sure that I (as eldest perhaps, but more specifically as executor) was aware of the various insurance policies, retirement accounts and property. 

In that respect, she was doubtless “better” than many parents in discussing such matters before her passing (though none of that happened until after my father passed). Moreover, despite their modest means, they set up a living trust back when my Dad was with us — specifically to avoid the complexities of going through probate in an effort to make it easier for us. And prior to her passing, Mom made sure I had all the account numbers and phone numbers, and we set up online access to everything — allowing me to help her manage those accounts from afar well before her passing.

That said, and despite all that preparation — there were some “bumps” along the way. Here’s what I learned.   

Lesson #1 — Make sure that you share (or get) information about insurance, retirement and property with trusted individuals/families while you are still able.

Now, for all the headlines about dead people on Social Security rolls, they were “johnny on the spot” in notifying — well, everyone — about Mom’s death. Her pension stopped — immediately — as did access to her online insurance and retirement accounts. That is, of course, a good thing from a fraud standpoint. There are miscreants aplenty who troll death notices and look for opportunities to take advantage of those situations. That said, if I hadn’t already known what accounts Mom had set up — I wouldn’t have had a clue as to how to go about the process of closing and cashing them out.

Lesson #2 — Make sure that you know WHO the designated beneficiary(ies) are for each of the insurance, retirement and properties in question.

Now I had assumed — based on prior conversations that all of Mom’s holdings were set up in the name of the trust. And, armed with account numbers, I proceeded to file claims on that basis.[i] Mind you, everybody wants an original copy of the death certificate — and that means that you have to ship it to folks via a traditional delivery service (FedEx, UPS, USPS, etc.). And, as you might expect, they also want some evidence that you are legally positioned to act on behalf of the trust (though this they will accept electronically). This all takes time.

Then I started getting mail BACK from various entities that said the trust was NOT the beneficiary (this is all via mail, so weeks are passing). Of course, when I called to inquire who WAS the beneficiary — well, they wouldn’t tell me, as my legal status of trustee mattered not (nobody talks to anybody (else) until they get the aforementioned death certificates).

Fortunately, as it turned out, Mom had designated — probably back to the time before she had the trust established — her children as beneficiaries. Being one of those, I was then able to pivot — and got a response. They wouldn’t confirm the remainder of the beneficiaries — but knowing Mom, I was pretty sure that she had named each of us as beneficiaries (she had), and so I was able to proceed with my claim (though my siblings had to proceed “individually” with theirs). 

Lesson #3 — It doesn’t “pay” to wait.

With regard to the latter, my experience was that, despite the rapid (if not immediate) cessation of access to Mom’s accounts, the notification to beneficiaries was slow (and, as noted before, via USPS). Moreover, people tend to move over time, and so the beneficiary address that was provided back in 2006 might no longer be accurate. The claim forms, when they did arrive, were bulky, confusing and intimidating — with little reference as to which account was involved, or what kind of account it was. In sum, it would have been easy to see it as junk mail. 

It didn’t help matters that, over the years, consolidation in both the insurance and retirement industries meant that those massive forms came from companies whose name didn’t match the original source (and in two cases, they now bore the same name, but not that of the original companies). As noted above, and through no fault of these companies, the addresses on file were out of date (though one managed to find its way to a nephew of a different brother — in a completely different state — and we still have NO idea how THAT happened).

More than that, my well-educated siblings struggled to make heads or tails of the options.  In their defense, you had to wade through 12 pages of “explanation” to get to those options — and then even this industry “insider” found it to be a head-scratcher. Seriously, do the people who draft these forms have a clue what plain English looks like (p.s., annuity companies really make it hard to request a straightforward lump sum)?

Lesson #4 — You can count on customer service, but only during business hours.

Now, and without exception, everyone I spoke with at the various firms was kind, understanding and helpful — in spirit, if not in what they were allowed to tell me. Much of the claims filing (except for the death certificate) could be done online. Everything — eventually — worked out. 

But if you do have a need to talk to someone at the firms, know that dealing with these matters is something that’s hard to do during “regular” business hours (the one exception — Mom’s 403(b) retirement account!). Fortunately, my “retired” status helped, but for those still working a full-time job, note that most didn’t offer 24-hour — or even evening hours — customer support. Budget your time accordingly. 

And my thanks here to all of those customer service reps who were understanding, kind and patient.

• Nevin E. Adams, JD

Encouraging Words

 On what turned out to be the longest day of 2024, I said good-bye to my dear 94-year-old mother.

It wasn’t how any of us had planned to spend that day. Two days earlier, she was returning from getting new hearing aids with my sister when she slipped and fell — broke her femur, sending her to the hospital for what was to be a weekend surgery. Mom was amazingly self-sufficient — still living on her own (with some assistance from my sister, who lives nearby) — and she had gone through heart valve replacement and a pacemaker — with COVID in between those two years back.

But this time, as is often the case with older folks, the trauma to her body was more than she could fight off. Thankfully, she managed to hang on until her kids (including this one) and several grandkids were able to get to Chicago to be with her as she went to be with the Lord.    

I moved out — and my parents moved for my Dad’s new job — just as I graduated college.  My parents (and three siblings) lived in a house and a community that I only rarely visited — even less so as my own work and family drew me hundreds of miles away. As a consequence, there was a big chunk of my mother’s life that occurred outside my experience — neighbors, co-workers, and church members. Many of whom had rich and touching stories of the impact Mom had had on their lives.    

Not that Mom and I didn’t talk. After my Dad’s passing in 2006, I committed to calling her every Saturday morning — not always at the same time, and at times (I found later) wresting her out of bed when she, otherwise, probably had been sleeping. We covered a lot of ground on those Saturday mornings — weather, politics, family, investments — and religion. Mom’s faith was the central focus of her life — as the wife of a minister you might expect that — but as have many others of my acquaintance, she had a life — and a profession — outside of the church. 

See, Mom was a teacher from a long line of teachers — what some might think of as the school librarian, though in later years as a “learning center director,” she also became “custodian” and master of the school’s technology investments — video, computers, etc.  It was a skill she relished and nourished — regularly corresponding on email and using her Kindle Fire (and PC) to keep up with photos and YouTube videos. Both her love of books and reading — and technology’s gifts — she passed on to her kids, notably this one. Despite her age, Mom was no luddite, though in recent years the pace of change (the iPhone operating system updates were a particular challenge) was frustrating (and thank goodness for TeamViewer!).

I’ve shared in previous columns the lessons I picked up along the way from Mom (and my Dad, as well). Her decision to set aside money in a 403(b) when my dad insisted they couldn’t afford to (and trust me, it took some sacrifice — that was on top of the 8-10% of pay mandated pension contributions). But she also had the foresight to buy pension credits for the years she stopped teaching to raise a family.

And she, along with my Dad, bought long-term care insurance before it was “cool” (and when it was considerably more affordable) because she didn’t want to be a burden to her family — and had seen first-hand with her parents the financial toll that can take. Mom’s retirement finances — because of the thoughtful and prudent sacrifices my parents made along the way — were comfortable.  Indeed, her retirement income was better than her pre-retirement take-home even after nearly three decades of retirement.

It was, however, her faith that gave purpose to her life. And even when it was no longer safe for her to drive — and COVID kept her home — she believed with all her heart that the Lord’s purpose for her — despite, and perhaps because of those limitations — was to be an encouragement to others.

And so she did — by phone calls, texts, and an astounding amount of “snail mail” — she found ways to reach out, to support and encourage what turned out to be an incredible network of friends, family, church members — even co-workers from three decades ago.  The week she passed those notes were still arriving, encouraging those in her network(s).

I’m already missing my Saturday morning phone calls with Mom. But what a difference we could make in this world if we would all take to heart her “mission” to support and encourage those around us — to provide those “encouraging words” — because you just never know how much difference it could make…

• Nevin E. Adams, JD

5 Steps to Cyber Security

Recent reports of 401(k) thefts and an ongoing concern about cybersecurity (should) have everybody on the alert. Here’s some things you, your plan sponsor clients, and their participants should check out—now.

Find Your Account(s)

It may have been a while since you checked out your 401(k) balance—indeed, many may not have ever  checked it out online. Start by tracking down the website, your user id, your password. If you haven’t done so in a while, you may have lost those credentials—or your access may have been disabled. Even if those credentials are still valid, it’s probably a good time to change them. Make sure you remember those account(s) at previous employers’ 401(k)s that you may have left “behind.” 

Oh, and it will be less frustrating if you don’t do this on the weekend. In my experience, few offer customer service support then, and if you need help getting on, you’ll need some help.

You might also find that it’s a good time to consolidate those 401(k) accounts so that your “check up” can be a bit less burdensome in the future.

Make Sure ‘They’ Can Find You, Too

Addresses change, phone numbers too. You’ll want to make sure that your contact information is up to date. That old work email address probably doesn’t work anymore, either—make sure those “old” 401(k) accounts know where you are.

Change the ‘Locks’

Chances are the last time you logged into your 401(k) account, you were told to come up with a password that was a combination of so many letters and characters you lost count. You may have been prompted to come up with answers to a handful of seemingly random “security” questions (what was  your first concert, after all?). You may have been asked if you wanted something called “multi-factor” authentication (for example, you might be asked to enter a code that is sent to a phone or email account that you have previously authorized). And, if you logged in from a different device (smartphone, or even a different browser), you may well have been asked to confirm that as well.

Frustrating as that series of hurdles can be if you are in a hurry, they’re all designed to stop, or at least slow, someone hacking your account. So, change your password regularly, use a password manager to help you keep up with passwords no human brain could possibly be expected to retain, and definitely go with multi-factor—because when someone who isn’t you accesses your account, you want to know it before  they get in. 

Check Your Beneficiaries

One of the most common areas overlooked is that of beneficiaries—the folks that you want to receive your account balance if you’re no longer “here” the receive them. This is so critical that the Plan Sponsor Council of America focused its recent 401(k) Day campaign on the topic. 

The default assumption if you’re married is your spouse (if you want to designate someone else you’ll need their acquiescence), but—like addresses, spouses have been known to change, children have been known to come along, children have been known to marry individuals that wouldn’t be your first choice, and life situations change. I actually had a situation where my beneficiary designation was (apparently) “lost” during a provider change.  

You’ll want to make sure that who’s on record as your beneficiary is current because things change—and the plan administrator will almost certainly distribute benefits to the person(s) you’ve designated—regardless of “circumstances.” 

Get a ‘Ready’ Read

Oh, and while you’re at it—you might want to check out your retirement readiness—how much you’ll need to retire comfortably, and how close your savings and other assets are to making that a reality. 

That might, in turn, not only provide you with good insights as to how much you need to be setting aside—but provide a sense of comfort as you work with your advisor/investment professional. 

It’s important that your savings be secure, after all—but ultimately you need them to be… enough.

- Nevin E. Adams, JD

It's About Time

Most of the surveys and research in our industry focus on the shortcomings – a lack of savings, of diversity in investment, of failure to maximize the employer match, or to have access to the programs that support those opportunities. There is, however, a shortfall that doesn’t garner much attention.

I’m talking about time.

And while time is often treated as an “enemy” of retirement planning (sometimes under the “longevity” label), certainly when there is a concern about outliving one’s resources, or perhaps when too little time remains to make preparations, there is another aspect: a retirement cut short.   

This is heavy on my mind of late – not just because this week marks the anniversary of the Sept. 11 attacks, though that’s certainly a factor.

My recollections of that awful day notwithstanding, I’ve been particularly mindful of the untimely passing of three individuals of my acquaintance in recent weeks: a relative, a colleague, and an associate here. Two were not even thinking about retirement when their time came – one had been eagerly looking forward with anticipation to a retirement she’ll never have.

Now I’m not privy to the particulars of the financial plans of these individuals – the needs that their unexpected passing may present for others – or what steps, if any, they may have taken to ease the financial circumstances for those they left behind. I hope they had that opportunity, but know all too well that many don’t.

People die tragically and prematurely every day, of course. Most of them are unknown to us, and nearly all are unnamed to us. And as the recent mass shootings remind us, on any given day, any one of us could go to work, or to the store – and simply not come home.

Ironic as it sounds, death is a part of life. Thoughtful individuals prepare for the possibility of death –through faith, sacrifice and, with luck, sound financial planning. However, most don’t dwell on those realities, and that’s doubtless a good thing.

In this business, we spend a lot of time worrying about the risks of outliving our retirement savings. In fact, surveyed workers increasingly seem to rely on an assumption that they will work longer, or save more later, to make up for their current shortfalls.

However, and perhaps particularly on this anniversary eve of the Sept. 11 attacks, it’s worth remembering that we don’t always have as much time as we might think – or want.

It’s time we did.

- Nevin E. Adams, JD