E222 Beneficiary Designations for Cryptocurrency Exchanges

E222 Beneficiary Designations for Cryptocurrency Exchanges

One of our podcast listeners asked: “Is it possible to open a Binance account that is funded by a trust account? If so, does that by default make that particular Binance account a trust account with the beneficiaries named on the bank account that is used for funding it?”

Great question! To answer it, we need to break it down a bit:

What is a trust account?

What is a trust account?

There are a lot of different names for a trust account at a bank: ITF (in trust for), Totten trust, TOD (transfer on death), POD (paid on death), and other similar names. Basically, it is beneficiary designation that is added to your bank accounts.

It’s the same concept as life insurance policy: when you completed the forms, you most likely named who gets the account when you die. They become the beneficiaries on this particular policy.

A trust account at a bank is not the same as creating a Trust for estate planning purposes. I believe the question here is: “Does the Binance account take on the beneficiary designations that are on the original bank account?”

Do beneficiary designations transfer with funds?

Do beneficiary designations transfer with funds?

The answer is NO. If you send money from your Citibank bank account to a Vanguard account to buy some stock, the Vanguard account does not automatically inherit your Citibank beneficiary designations. You’d have to fill out forms at Vanguard to name beneficiaries.

Beneficiary designations do not follow the dollars. That’s the case for moving from bank account to crypto exchange, as well.

How to name beneficiaries on cryptocurrency exchange

How to name beneficiaries on cryptocurrency exchange

What is a cryptocurrency exchange? The big ones like Binance, Coinbase, Kraken, Gemini, are like E-Trade or Robinhood for cryptocurrency. And as of now, you can’t name beneficiaries on the account.

A main reason is most likely due to the fact that the laws are not set up for that yet. Therefore, cryptocurrency exchanges don’t offer that feature. So, you will need to make a Last Will and Testament or move your crypto off the exchange to a wallet that can be governed by your revocable trust or your will.

Should I write a book on What Happens to Your Crypto When You Die?

I would love to put all of this into a booklet, but since things are changing so fast with cryptocurrency, I’d have to make sure there are enough high-level concepts that won’t change every month. As we’ve discussed, cryptocurrency is still evolving.

If you have a question about this topic, please reach out to me. Questions like the one help us understand what people need to know!

5 Unexpected Consequences of Retiring Early 1920x1080

E79 5 Unexpected Consequences of Retiring Early [REPOST]


We’ve previously talked about the “F.I.R.E.” movement (Financial Independence and Retire Early). Most people assume that early retirement is a universally good thing. But what are some of the unexpected drawbacks of leaving the workforce early?

1. Not as Happy as You Expected

Generally, retirement makes you happy, but the increase in happiness was already priced in. It’s not like an instant happiness from winning the lottery. Retiring early is a process that you’ve been building up. Perhaps it’s better to say that the process toward early retirement may cause a gradual increase in happiness. People have said that the initial happiness of retiring early tends to fade in three to six months. As humans, we adapt to our circumstances quickly. Your way of living eventually becomes your normal.

2. Identity Crisis

Many people don’t realize how much of their identity is connected to their job and only after you leave your job do you truly realize how wound up you were in your profession. This identity crisis may last as little as three months or even up to a few years.

When people ask what you do for a living and you tell them you don’t do anything, it could pull at your sense of self-worth. It’s hard to tell people that you are not working when you used to do something. You may feel like you now have a void that needs to be filled.

3. Loss of Power/Influence

This affects more of corporate America. When you work for a company, regardless of your actual salary, you may have a fancy executive title. You make decisions that have potentially million-dollar impacts. You have people reporting to you, depending on you, and seeking your permission. It is extremely hard to shift from having all of that power and influence to having none of it. Going from a job like that to fishing every day may sound heavenly, but people report that it is hard to deal with the loss of that sense of importance. When people prepare for retirement, they often think of the financial aspect, but It is important to plan for how it will impact you mentally and emotionally, too.

4. Need for New Motivation

Most of us have been working for money since we started working. Once you achieve financial independence, what now? You don’t want to be idle, but you’re not striving for the highest paying position. Losing your main source of motivation can be disorienting, but it is something you have to learn to deal with.

When someone retires, their motivation isn’t for money anymore. They need to find happiness and fulfillment in other ways. The most public example of this is Bill Gates. He made his money in Microsoft, but he’s not working on Windows anymore. He’s trying to cure malaria and solve nuclear power. Not everyone will retire and become a philanthropist, but retirement opens the opportunity to do something you love. Maybe you had a demanding work schedule that kept you from volunteering. In retirement, you now have the time to pursue those desires.

5. Living within a budget

This does not apply to everyone, but many retirees have to watch what they spend. Maybe you start declining dinner invites, forgoing expensive travel, downsizing belongings, or sell your home. For many, living on a budget is an easy decision when deciding if they would rather be back in the rat race, or forgo some things and truly be retired.

I’ve read essays from folks who have been through this. I think the F.I.R.E movement is not just about retiring early but making sure you’re set up to have resources. Retirement means changing your budget for the stage you’re in. For some, it will be a tougher adjustment than for others.

 

You can learn more in my book, “How to Invest for Retirement

E218 Bitcoin Letter of Instruction to Heirs

E218 Bitcoin Letter of Instruction to Heirs

Every bitcoin estate plan must include a simple, easy-to-understand letter of instruction to your heirs or executor. If you don’t, all of your hard-hoarded bitcoin may disappear.

Explain Bitcoin to a Child

Explain bitcoin to a child

Keep it super simple! Write the letter like you are explaining bitcoin to a child. Do not give the whole history of bitcoin, block chain, sound money, etc. Just write enough to get them past this treacherous stage: handling new and complex assets while grieving.

In your letter, write about:

  1. High-level concepts;
  2. Major pitfalls to avoid when working with cryptocurrency; and
  3. Immediate to-dos or checklist.

Bitcoin vs Banks

Most of your heirs understand banks and brokerage accounts. So, explain how bitcoin is different. Explain that cryptocurrency can be lost forever if handled wrong, unlike dealing with a bank. There is no password recovery.

Bitcoin vs banks

If your heir is a little more financially savvy, explain that bitcoin is like a bearer instrument. Bearer instruments are certificates where whoever holds them owns the money. (Cash is essentially a bearer instrument). When you give someone your bitcoin keys, that person has complete no-consequence access to your funds. No one will check their ID or verify their signature.

Where You Store Your Bitcoin

In your instruction letter, explain where you store your bitcoin keys. You should have a rough inventory of what you’re holding so your heirs know what to look for. Most bitcoiners have a little bit on an exchange (Coinbase, Binance, Gemini, etc.). You may also have some hot wallets online (apps, browser extensions, etc.). Lastly you may have cold wallets, which are not connected to the internet at all (hardware or paper certificate).

It is important that your instructions are in a letter, not in your will. Your holdings could change, and you won’t want to update your will for every change.

Where you store your bitcoin

Next, explain how the heirs can access the items on your inventory.

Exchanges are simple to explain, because they are more similar to banks than anything else. You heirs will send the death certificate and letters from the court and the exchange will turn over possession to the heirs.

Wallets are a little different. A good solution for a hardware wallet is to give a clone wallet to an executor or heir and give the PIN to someone else. Or you can split up a seed phrase and pass phrase among different heirs and they must collaborate to access your bitcoin.

Bitcoin letter of instruction example

If you’re reading this, I’m either dead or incapacitated. If I’m not dead or incapacitated, PLEASE STOP READING NOW.

This letter is about my Bitcoin and other cryptocurrency, and how to access them. I won’t even try to explain everything about Bitcoin here, but I want you to know enough to not get robbed or lose everything.

Some important high-level concepts:

(1) Cryptocurrencies can be lost, forever! There’s no FDIC, or bank customer support to stop payment or reverse a bad transaction. Once it’s gone, it’s gone.

(2) There’s no password reset or “recover lost password.” If you lose the passwords (known as seed phrases, I’ll explain below), Bitcoin and other cryptocurrencies are gone forever.

(3) Bitcoin and other cryptocurrencies are “bearer” assets, like cash. Whoever holds it, owns it. So if you hand someone the seed phrases, it’s like handing them an untraceable bag of cash.

Nervous enough? No worries, Just follow these instructions, and you should be fine.

On Exchanges

I hold some Bitcoin and other cryptocurrencies on the following exchanges:

– Binance.com/Coinbase.com/Gemini.com

This is the easy part: just ask my executor or probate lawyer to contact the exchange with an original death certificate and letters testamentary, and they’ll give further instructions on how to transfer my Bitcoin and other cryptocurrencies.

Now it gets harder.

On Hardware Wallets

I also hold some Bitcoin and other cryptocurrencies on hardware wallets. What’s a hardware wallet? It looks like a large USB thumb drive, and my passwords/seed phrases are securely stored inside the device. You need my PIN code to access my hardware wallet.

My hardware wallet (and duplicate copies) are located:

– Describe locations

You should automatically receive an email with the PIN within six months of my death (I set up a “Dead Man’s Switch”). Just remember: anyone who has both my hardware wallet and PIN has full, irreversible access to the Bitcoin and other cryptocurrencies inside.

Seed Phrase

If you cannot find or access any of the hardware wallets, you can still recover my Bitcoin and other cryptocurrencies using my “seed phrase.” This string of 24 ordered words is the secret password to control the funds, even without the hardware wallet device.

I’ve given the first 12 words to these trusted people: Bart, Lisa, and Maggie

And the second 12 words to: Moe, Larry, and Curly

Contact whoever you need to complete the 24 word seed phrase. And remember: whoever has the full 24 word phrase has full, irreversible access to the Bitcoin and other cryptocurrencies inside.That’s it.You probably won’t be able to navigate all this without some help.But at least you now know how to find and protect the hardware device and seed phrases while you figure out the rest.

Also, consider choosing an executor who understands bitcoin and cryptocurrency custody. You can learn more about hiring a professional executor in my book, “How to Choose Your Executor

E216 Bitcoin's Unclaimed Property Problem

E216 Bitcoin’s Unclaimed Property Problem


Bitcoin is getting more mainstream every day. But new bitcoiners need to be aware of the unclaimed funds problem. Hopefully we can contribute to a solution.

How do Unclaimed Funds Work, Generally?

The first level of prevention of loss is password recovery. This is not part of unclaimed funds, but for banks and other custodians.
If your bank account is dormant (meaning no activity for a long time), then the bank must make attempts to contact you. If there’s no contact after several attempts, then the bank sends your money to the State to hold in the unclaimed funds department. You and your heirs can recover from the State any time.
This is how banks protect their members from catastrophic loss of assets.

Why Bitcoin Is Different

Why bitcoin is different
When you own your bitcoin, you own your own keys (self-custody). If you keep your bitcoin on an exchange, there are some similarities to a regular bank account. Meaning, you have a way to recover your password and there is a similar unclaimed funds procedure as discussed above.
If you are a real bitcoin enthusiast, you probably own your bitcoin. In this case, there is no one you can call to recover your password. You are responsible for it, and there are some measures you need to take to make it work.
If your bitcoin wallet is dormant for years, no one will attempt to contact you. It just stays in zombie mode. Bitcoin is a public ledger, meaning we can all see how much is in a given wallet, we just don’t know whose wallet it is. There are wallets sitting with huge amounts and there is no one to check on them.
If you lose your keys (or fail to deliver them to your heirs), they are gone “forever”. In other words, your wallet becomes stuck with no way to get into it.

How to Prevent Lost Bitcoins

Since bitcoin is not governed by the unclaimed loss protocols, there is not a safety net.
How to prevent lost bitcoins
If you think someone knows how to manage your crypto after your death, it won’t happen without leaving instructions.
How do you recover your password? Don’t share your keys. You can split up your seed phrase or add a passphrase. You can give a copy of the hardware wallet to one person and the PIN to another person.
Another option is a decentralized dead man’s switch. A dead man’s switch is a button that needs to be pressed in order to prevent something from happening. The act of pressing the button is proof that you are alive. If you fail to press the button as scheduled, then the process starts for your funds to transfer to your beneficiary. For example, the PINs, phrases, or locations of those keys will be sent to people who will combine the information to access your account.
It’s important to remember that it is not safe to store seed phrases anywhere online (even split up).
A centralized dead man’s switch with a company could go away at any given time. A decentralized dead man’s switch would be some sort of open-source project that does not rely on one server or one company. A solution that preserves the ability to control your assets is decentralized and secure. For now, split hardware/pin or seed/passphrase are the best solutions we have.
What are some better solutions? I would love to hear from you.
What will bitcoin look like in the future? Will we have bitcoin “banks” to protect your money and provide quick easy access? How will they remain decentralized and let you keep your sovereignty over your money?

It is encouraging to see so many solo agers using cryptocurrency – even more so than their younger cohorts. If you would like a free copy of my book, “The Solo Ager Estate Plan”, click on the link below.

Free copy of “The Solo Ager Estate Plan”

The Solo Ager Estate Plan Cover 3D

Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan

E210 How to Administer a Bitcoin Trust

E210 How to Administer a Bitcoin Trust


In Episode 206 we talked about how to set up a trust. This time, we’ll talk about how to manage a bitcoin trust as the trustee.

How to Transfer Bitcoin to Trustee

How to transfer bitcoin to trustee

As we discussed in Episode 206, there are a couple of ways to transfer control of the trust to the trustee. These are the dead man’s switch, sharding, and even old-school envelopes.

The dead man’s switch requires the trust maker to hit a button at regular scheduled intervals. Failure to hit the button presumes your death, and an email containing your seed phrase gets sent to your trusted people. (This is not a good plan, since it stores your seed on a ‘hot” device, the email server).

You can also “shard” your code and break up your seed phrase into chunks. You would give these chunks to different trusted people who will come together after your death to put the pieces together.

How to Invest the Trust Assets

Now that trustee has control, how should the trustee hold and manage the Bitcoin? This depends on the decedent’s wishes.

Sometimes, the decedent’s wish is to liquidate to fiat, convert to cash, then invest it as a normal trust.

But most bitcoin holders probably want their trust to continue to hold bitcoin on behalf of the heirs. The problem is that there is no such thing as a fiduciary account on the centralized exchanges. That is, there’s no way for a trustee to open an account at Coinbase, Gemini, etc. Those exchanges only allow individuals to open accounts, not trusts. So make sure you choose a trustee who knows how to handle a digital or hardware wallets and safeguard the trust keys/seeds.

How to invest the trust assets

If your trustee holds the Bitcoin in trust, he must manage his own wallet. He must also maintain security and anti-loss protocols as if it were his own. If the trustee dies with the keys or seed phrases, that’s not good. The trustee needs to have something in place to avoid catastrophic loss in a secure way. It makes sense for the trustee to have a sharding with the successor trustee or a backup attorney.

Bitcoin Trust Fund Distribution to Beneficiaries

Since cryptocurrency is so volatile, it is best to distribute the bitcoin in-kind. Meaning, instead of the trustee selling the Bitcoin and giving the cash to the heir, just distribute the actual bitcoin to the heir. This way, the beneficiary bears risk of if/when to exchange to fiat.

Bitcoin trust fund distribution to beneficiaries

The problem with this approach is that not all beneficiaries know how to receive or manage cryptocurrency. Beneficiaries should have some skill with cryptocurrency and have their own wallets/digital addresses.

Request your free consultation

Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling bookHow Probate Works.”

E208 Article 81 Guardian vs Revocable Trust for Solo Ager

E208 Article 81 Guardian vs Revocable Trust for Solo Agers


Recently, our solo ager client, Julie, moved into a long-term rehabilitation facility. Thankfully, her health is stable, but her bills are starting to fall behind.

No plan: What is Article 81 Guardianship?

An Article 81 guardian is someone that takes over your financial affairs when you have no prior plan. By walking you through this situation, we will show you what can happen if you fail to plan.

Unfortunately, Julie only had half a plan. She has a Last Will and in it, I’m named as her executor because she has no relatives nearby. But this is only half of a plan because a will only takes effect when Julie dies. Until then, I have no legal authority.

No plan- What is article 81 guardianship?

To help Julie manage her finances and pay her bills, I have to ask the court to name me as her Article 81 guardian. Any time you have to go to court, there are usually delays, costs, and uncertainty. While we are waiting at the mercy of the court process, Julie’s co-op payments are falling behind.

Better Plan: Guardianship vs Revocable Trust

What would have been a better, complete plan for Julie? In this case, with a revocable trust, I could step in and help Julie without the long court process. Besides avoiding probate, another benefit of a revocable trust is the end-of-life help with finances. For the same reasons you’d  avoid probate, you’d want your end-of-life team to be able to help you without going to court.

Better plan- guardianship vs revocable trust

If you worry that it’s too expensive to hire a lawyer for a trust, note that the cost of an Article 81 guardianship is between $5,000 to $10,000. A revocable trust costs about $2,000. I don’t recommend revocable trusts for everyone, but it is often a wise option for solo agers.

Free copy of “The Solo Ager Estate Plan”

The Solo Ager Estate Plan Cover 3D

Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan

E206 How to Set Up a Bitcoin Revocable Trust

E206 How to Set Up a Bitcoin Revocable Trust


Cryptocurrency (such as Bitcoin) is a new and unique asset. It’s sort of like cash, personal property, and intellectual property all in one. You need to plan for this type of asset in a different way than you would for your bank or brokerage account.

If you want a revocable trust for your bitcoin, you’ll need both a legal plan and a technical plan.

What to Include in Your Bitcoin Estate Plan?

If you want your trustee to hold bitcoin, you can’t rely on the same old boilerplate trust language. You’ll need to tweak a few things for your legal plan to work.

 

Opt-out of the prudent investor rule

Most trustees must follow the Prudent Investor rule, which (roughly) says the trustee may be liable for losses if he doesn’t invest the trust portfolio according to legacy investment principals. For example, 60% equities, 30% bonds, 10% cash. This doesn’t work for Bitcoin, since most people still consider it highly speculative. So a bitcoin revocable trust must include language opting-out of the prudent investor rule.

Access to devices and logins

What to include in your bitcoin estate plan?

Make sure to include language that gives your trustee access to your computers, devices, and logins. Without this, your trustee may technically be violating privacy laws.

Keep it flexible

It is important to keep your Bitcoin estate plan flexible since cryptocurrency continues to evolve.

Bitcoin in a Living Trust

With a traditional bank, you’d rename your account so that the trust owns it and not the individual. For example, you’d rename your personal checking account from “John Doe,” to “The John Doe Trust.”

But this won’t work if you hold your bitcoin on a centralized exchange. Currently, exchanges don’t open accounts for trustees. Nor do they offer beneficiary designations. So, to make a bitcoin trust, you’ll need to hold via a digital, hardware, or paper wallet where you control your keys.

Bitcoin in living trust

Think of your wallet as personal property, like artwork and other collectables that don’t have a deed or other record of ownership. One way to prove transfer of ownership for personal property is to sign a gift or assignment deed from yourself to your trust.

What Happens to the Bitcoin Trust Upon Your Death?

Now onto your technical plan: how to give access to your trustee when you die.

One solution is to “shard” your seed phrase and break it into chunks. For example, give half of the words to your lawyer, then give the other half of the words to another trusted person. Only upon your death will these two people be able to connect with each other to complete the seed.

A component of those plans could be a “dead man switch.” A dead man switch is where you routinely do something (ex. press a button) to indicate you are still alive. If you fail to press the button or miss two button presses, then it is presumed that you are dead. An email containing seed phrase then goes to your trusted people. (This is not a good plan, since it stores your seed on a ‘hot” device, the email server)

What happens to the bitcoin trust upon your death?

You could also give your seed to your trusted people in sealed envelopes. If this is worrisome, you could tell them to send you pictures to show that the envelope is still sealed (not ideal, just brainstorming here!)

We have worked on several Bitcoin revocable trusts, and these are the types of situations we encounter. It is exciting for us to learn about cryptocurrency and work with our clients to protect these valuable assets.

Request your free consultation

Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling bookHow Probate Works.”

E202 Bitcoin Risk of Theft vs. Risk Loss

E202 Bitcoin Risk of Theft vs. Risk Loss


Bitcoin and cryptocurrencies are currently a popular topic. Here, we are discussing the risk of theft verses risk of loss with these types of funds, specifically why that matters in the context of estate planning. We are by no means experts in this subject, but we’ve done our homework.

Estate planning for Bitcoin can feel like you are in a Divinci Code movie, with secret codes and memorized phrases. It can feel like a treasure map, compared to your traditional banking.

There is so much advice out there online telling you to take some extreme measures to prevent hackers and thieves from plundering your stash. However, you have to make sure you don’t overboard, at the expense of increasing your risk to another type of catastrophic loss, simply losing your Bitcoin!

Estate Planning for Bitcoin

Estate planning for bitcoin

One of the most common ways of holding your cryptocurrency is on “hardware wallets.” That means that you have a device, not connected to the internet, that has access to your key (the fancy word for your secret password). One way to look at it is that it’s like your ATM pin. The only difference is that you can visit a bank to reset your pin, but when it comes to cryptocurrency, no one can help you recover it. We’re not talking about a simple passcode with 7 to 8 letters; we’re talking a combination of 24 words that will allow you access to your bitcoin (also called a seed phrase).

In terms of security, you don’t want to leave this phrase accessible to anyone. The internet goes to great lengths to tell you how to keep this secure. They suggest never taking a photo, which is typically stored on your computer, phone, or cloud. This also goes for storing it on your computer. Again – hackable.

They suggest a handwritten note. Which in itself can be problematic. Paper is fragile. Not to mention, have you ever put a note in a “safe” place? A place that’s so safe even you can’t find it? There in lies the predicament. That’s quite a conundrum. One copy can get lost, while a few copies can be misused. Why we don’t have all the answers for storing not losing your phrase, we are here to compare the bigger risk – someone hacking your bitcoin and stealing it or you simply misplacing your phrase and losing it. Based on which is the bigger risk is how you should plan accordingly.

How Much Bitcoin Is Stolen?

How much bitcoin is stolen?

According to Casa, one of the crypto security firms out there, 1.6 million Bitcoin has been stolen of all time, out of 18 million total. The vast majority of these thefts have occurred by hacking big companies, as hackers are going for the big score. This also includes Ponzi schemes and fraud. For example, someone says they will buy Bitcoin for you with $100,000, but instead buys a Lamborghini.

We believe that this number is underreported. Not everyone reports it when their cryptocurrency is stolen, as they may believe that there is nothing that can be done to recover it.

How Much Bitcoin Is Lost Forever?

How much bitcoin is lost forever?

Let’s take a look at the statistics and compare lost vs stolen. By “lost” we mean that you’ve done such a good job of hiding your passcodes, that you cannot access the bitcoin. According to Chainalisys, a crypto currency think tank, about 20% (or 3.7 million of 18 million) has simply been lost. That is more than twice the amount that has been stolen.

This number may be a little high, because Chainalisys may include super inactive accounts. However, even if you remove those accounts, the stats are still much higher than the amount of Bitcoin that is stolen.

As you decide to hold cryptocurrency and you are learning how to use secure codes, keep these stats in mind. It is twice as likely that you will just lose your Bitcoin by your own doing compared to it being stolen. If you are that worried about having your second piece of paper hidden somewhere, it may be worth the risk of someone finding the second paper compared to you losing the only piece of paper.

When planning for your estate, you have to decide how you will leave these passcodes to your beneficiaries. There are a lot of ways, and they all come with their own risks. A family member may not be able to retrieve your access codes if given a treasure map to “find” the password. You have to balance the risk of simply not being able to access your cryptocurrency with the risk of having it stolen.

Request your free consultation

Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling bookHow Probate Works.”

E201 Should I Name a Trust as Beneficiary of My Accounts

E201 Should I Name a Trust as Beneficiary of My Accounts?


Another question that we receive often is “should I name a trust as beneficiary of my estate?” In a recent case, Rhonda reached out to us, because she wanted the benefits of a trust (avoid probate, reduce chance of a “will contest,” etc.), but she was not quite ready for the headache of a full-blown trust setup. In her particular situation, naming her trust as beneficiary makes sense. If you are considering this doing this, here are a few things you should consider.

How to Name Trust as Beneficiary

How to Name Trust as Beneficiary

A full-blown trust has to be set up and funded. It can be a nominal amount, even as little as $10. It has to own things and you will need to convert your banking accounts, houses, and related items from your individual name to the trust name. It may be quite a bit of work in some situations. For example. if you live in a co-op, this can be a lot of work to change your deed. You will likely need board approval, and this will take time and work. If changing your banking, you will need to go to the bank and open new accounts in the trust name. You’ll then need to change any direct deposits and withdraws once the new account is open.

In Rhonda’s case, instead of changing all of her accounts now, she is leaving them in her name and changing the beneficiary of the accounts to a trust. For example, when you have life insurance, you can name a person or multiple people as beneficiaries. However, instead of naming a person, you can name your trust to be the recipient.

In her situation, her trust will be unfunded until she passes. Upon her passing, the trust will be funded using the beneficiary designations.

To name a trust as a beneficiary, there are three basic steps. You must create the trust document, you then fund the trust (even a nominal $10), and finally, you name a beneficiary. Usually, you can obtain change of beneficiary forms for your accounts to change the names. The result: you have a hollow, but ready, trust on standby, which is ready to accept funds as beneficiary upon your passing.

Pros of Your Trust as Beneficiary

Pros of Your Trust as Beneficiary

One of the pros for taking this route is that, in theory, you get to avoid the costs and headache of probate. Probate is generally not easy and takes a long time. If there is a beneficiary on an account, then the account does not need to go through probate to be liquidated. You simply need a death certificate and a copy of the trust to withdraw the funds. Having a trust also reduces the chance of a will contest. If there is a wayward heir, they can contest the will if it is probated. If you do not probate, it’s much harder. You essentially create a challenge barrier with a trust.

There is also a phycological connection. Changing all of your accounts out of your name and into a trust name may feel as if it’s not yours. If that is an issue for you, then this option may be a good way around that feeling.

Cons of Your Trust as Beneficiary

This way of doing a trust does not protect you from court-appointed strangers (known as guardians) controlling your funds during your life. If everything is still in your name and you become incapacitated or someone can assert that you are in cognitive decline, then a guardian can be appointed to control your funds. However, if everything is owned by the trust, then a court-appointed guardian can not access those items. Only the trustee of the trust, as chosen by you, can control what happens. Not only does a full trust prevent a court-appointed stranger from controlling your assets, but they most likely won’t bother with you, because there are no funds for them to control.

Cons of Your Trust as Beneficiary

In general, Anthony is not really a fan of naming a trust as a beneficiary, because in his experience, people generally do not do a good job tracking their beneficiary designations. We see very often where people forget to change their beneficiaries after relationship ends and people die. It is very easy to forget, even if you are really well organized. The designations are not conspicuous and are not usually listed on the statements, so people do forget. Bottom line – people do not remember.

Another reason that Anthony doesn’t suggest this route is that honestly, doing it this way does not really save as much time as you would think. It is actually very similar to what you will need to do with your assets when you create a full-blown trust. In either scenario, you will have to submit forms and provide documentation, which is almost the same process in both situations.

Naming a trust as your beneficiary is a good steppingstone as first step to a fully funded trust. We suggest you talk out your wishes and situation with an experienced estate planner to determine the best route for you.

Free copy of “The Solo Ager Estate Plan”

The Solo Ager Estate Plan Cover 3D

Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan

E199 Solo Agers: Make These 7 New Year Resolutions for 2021


Happy New Year! Solo Ager experts Joy Loverde, Sara Geber, and Carol Marak were kind enough to share their thoughts with us on what Solo Agers should map out in the new year. Here are your seven new year resolutions from your favorite Solo Ager experts:

Joy Loverde, is the author of two books, The Complete Eldercare Planner and Who Will Take Care of Me When I’m Old. She is an expert in this area of solo agers and we are grateful that she shared her insight with our followers on our podcast Episode 192: How to Plan for Old Age and Being Childless with Joy Loverde podcast. She offers the following New Year’s Resolutions:

1. Learn More About Shared Housing

Learn More About Shared Housing

Shared housing can be summarized in two words: “Golden Girls.” Instead of going into a facility, this is a situation where people share housing. This can be a more intimate, cozy environment, compared to a institution setting. Last year reminded us how important social interaction is, and a lot of people have learned that they want to be in the company of others. She believes that shared housing will increase in popularity and will take off this year, as a result of 2020. This may or may not work for everyone, but it is certainly something for a Solo Ager look into. Joy recommends researching and exploring this option to see if it is something to consider.

2. Be More Aware of the Full Responsibility of Pet Ownership

Be More Aware of the Full Responsibility of Pet Ownership

Another result of 2020 is increased pet ownership. Many people sought companionship from pets when isolated from the real world. Solo Agers need to know the extent of what it takes to care for a furry family member. If they haven’t done so already, now is a good time to research the financial and physical aspects of pet ownership. In particular, what will happen to your pet if you are unable to care for them? Joy recommends exploring a pet trust. While Anthony isn’t a fan of pet trusts, he explains that they are a vehicle to care for the pet financially. Instead of giving funds outright to a person to care for a pet, it’s put into a trust. Anthony suggests that instead of a pet trust, you find someone that will care for your pet properly if given an outright lump sum.

Sara Geber, PhD. is the author of Essential Retirement Planning for Solo Agers. She is also a retirement transition coach and a professional speaker on retirement and aging. Sara shared essential retirement planning tips with Anthony recently on his podcast. You can listen to them here (part 1) and here (part 2). Sara She suggests these New Year’s Resolutions for Solo Agers:

3. Review and update your planning documents

3. Review and update your planning documents

Sara suggests that Solo Agers take the time to review their estate planning documents. In particular, she suggests reviewing your Power of Attorney and Advance Directive, especially if you have not done so in five or more years. While this isn’t the easiest and most uplifting resolution, it is very important. Anthony suggests that you review these documents every 4 years, which coordinates with the Olympics. To him, it is an easier way to remember. This is like going to the dentist – you may not love it, but you have to do it.

4. Have “the conversation” with your family and/or other loved ones

 

Again, while not a fun topic of conversation, it’s important. You don’t have to make a whole to-do about telling them, but it’s a good time to start talking, even if it’s informally. If you don’t share your end of life wishes and emergency contacts, then no one might know. It doesn’t necessarily have to be family. It may be your Super or Doorman that may learn of your passing before others. They see you daily and may know if something is wrong. You will want them to know who to call.

Have “the conversation” with your family and/or other loved ones

While not easy to talk about, if you share your burial and inheritance wishes beforehand, it may make it easier on those who will help with your funeral planning and finances.

Carol Marak is a solo aging advisor and advocate. She is the founder of the Elder Orphan Facebook Group, which launched in 2016 has almost 10,000 members. She also has a very successful YouTube channel called Solo and Smart and her book Solo and Smart, is slated for publication in 2021. We were thrilled to have spoken with her in podcast Episode 194: Tips from Founder of The Elder Orphans Support Group.

5. Shift uncertainty to predictable outcomes

Carol says that you should work to shift uncertainty into predictable outcomes. Generally, uncertainty can be stressful, so she suggests you fix it. If you’re feeling stressed about your health – fix it. Talk to your primary care physician about things you can do to change your daily habits and feel better.

Shift uncertainty to predictable outcomes

She suggests that you build a team of support. Not knowing who will help you when you need it can be stressful. A family can be built with friends and Carol calls these your “family of choice.” It does not necessarily need to be relatives. Find your team – your friends, your doorman, etc.

6. Never buy into the idea that you are powerless

Never buy into the idea that you are powerless

Carol suggests that you list two goals you want to accomplish. They do not have to be big goals. Simply pick two things that you have thought about doing and do them. She suggests that to do this, you should find the people who can help you learn the skills or strategies to achieve them.

Anthony, a Solo Ager expert as well shares his resolutions for Solo Agers:

7. Read more books, less “news”

Anthony recommends that you read more books and watch less news. Books help to educate and sharpen your mind. Authors of books typically spend substantially more time researching and writing the book then say a blog post or news article that was written on the whim. He feels that books immerse you, contrary to news articles which tend to enflame you.

Reading keeps you sharp and talking about books makes you a better conversationalist than talking about news. Set a goal to read one or two books a year. Anthony suggests that you never put pressure on yourself to finish a book. If you start it and don’t like it, put it down. You can go back to it or you can simply never pick it up again. If you go into a book with that pressure, it’s much harder to get started reading. Knowing you can stop when you want gives you some mental freedom to try more and more books.

Read more books, less “news”

Let’s face it – book clubs sound more fun and social than news clubs! Another bonus – you don’t have to purchase books. You can borrow them from a library or even your friends.

Free copy of “The Solo Ager Estate Plan”

The Solo Ager Estate Plan Cover 3D

Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan