Keep your will, estate plan, and any beneficiaries up to date - opinion

The big event this coming week is of course Purim, but we are also starting the third of the five books of the Torah. For those who enjoy reading about all types of sacrifices, these next couple of months will be pure joy.

Rabbi Menachem Weiman on Aish.com writes, “The first word of this week’s portion, Vayikra – And He called – contains a scribal abnormality that is rarely found in the Bible. The last letter of the word, an Alef, is written smaller than its normal size. Why is this done? What lesson is God trying to teach us? Since the Alef is small, at first glance, you might read the word without the Alef and pronounce it vayikar. We find that word used when God appears to the character Bilaam in Numbers 23:4: ‘And God happened upon Bilaam.’”

He continues, “Although the two words have a similar meaning, the midrash tells us that the word vayikra (with the Alef) implies a loving, close relationship, as in Isaiah 6:3 when the angels are calling to one another. And the word vayikar (without an Alef) implies an accident and spiritual impurity.”

When it comes to setting up your estate plan, it is of vital importance not to let your loving, close relationship with certain children cloud your judgment and create discord among your children.

It’s also imperative to keep your estate plan current. Earlier this week I received a call from Europe from a child of a client of mine who wanted to set up a meeting with her elderly father who lives here, to review his account. I explained that I was unable to speak to her about her father’s account and would need him to speak to me.

After I got off the phone with her, I checked the beneficiaries on the account, and it turned out that this daughter was not one of them. Then I remembered the story. It was six or seven years ago, and the father told me he wanted his son, who lives in Israel, to inherit this account, and the daughter would inherit a property that he owned in Europe.

At that point, each child was looking at about $750,000 potential inheritance. Over these last years, the value of the property has moved up marginally, but the brokerage account is now worth nearly $1.5 million. What’s worse is that the father has been suffering from early-stage dementia, which means that it’s going to be difficult if not impossible to change his estate plan. Neither child knows about his plan but after 120, they are going to find out and the daughter in Europe is not going to be happy.

The importance of making sure estate plan is current

I can’t stress enough that you need to make sure your estate plan is current. The last thing you want is for the blessing that you want to leave your heirs to turn into a curse. As an aside, the same thing holds whenever there is an account with beneficiaries.

I know of a case where a wife owned a sizable Individual Retirement Account (IRA) in the US, and then the couple got divorced. When you set up an IRA you name your beneficiaries. When she had set it up, she named her then-husband as her 100% beneficiary. She never changed that after the divorce. You can guess what happened. She passed away and the ex husband ended up inheriting this particular account.

Schwab.com has a primer on estate planning which discusses the issue of beneficiaries. “Regularly reviewing your account beneficiaries should be part of your financial and estate planning strategies. But certain life events and account changes demand immediate attention. Marriage, divorce, the birth of a child or grandchild, the loss of a spouse or child – all these events can prompt a change in beneficiary decisions.

“Keeping your beneficiaries up to date helps ensure that you don’t inadvertently leave money to the wrong people or leave a loved one out of your plan. Also, anytime you close an account and move your money over to a new one, you’ll want to make sure you take the time to specify your beneficiaries again.

“For example, if you recently rolled over a 401(k) from a former employer or transferred an existing IRA to a new financial firm, your beneficiary designations won’t transfer over with your assets.”

Make sure that your legacy is a fond one for your heirs, and that no one is forgotten or slighted. Do all involved a favor and update your will and any beneficiary designations so that your final wishes are carried out according to your plan.

The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.

Aaron Katsman is the author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI. For more information, call (02) 624-0995 visit www.aaronkatsman.com, or email aaron@lighthousecapital.co.il.