3 Steps to Protect Your Family’s Financial Future. How important are beneficiary designations? What happens if you die without a will? What are intestate succession laws? Death is a subject that most people want to avoid, especially when it intersects with finances. Unfortunately, these are necessary questions to ask, as your legacy is at stake, and taking just a few hours to plan could save your family thousands of hours after you pass. 3 Steps to Protect Your Family’s Financial Future. Family’s Financial Future

When guest and long-time friend Renee received the call that her husband of nine years had passed unexpectedly, she was left to deal with not only her own grief but also the financial implications of her husband’s death. While the two had discussed death and finances on multiple occasions, little did they know that a common financial error would create a logistical nightmare—one that would lead to ongoing legal battles and fractured relationships.

In today’s episode, Renee joins us to tell her story and stress the importance of planning for the unexpected. We cover things like beneficiary designations, wills, living trusts, and intestate succession laws. Renee also shares the three steps you MUST take to avoid having a post-passing financial nightmare. As always, our hosts Mindy and Scott are here to share some invaluable advice you won’t want to miss! 3 Steps to Protect Your Family’s Financial Future

Mindy:
This episode discusses the unexpected death of a loved one and the aftermath of that tragic event. Please take care when listening, and if this is a trigger for you, you may wish to skip this episode. Welcome to the BiggerPockets Money Podcast, where we interview Renee and talk about what happens when your spouse dies without a will and your finances were not totally combined. Hello, hello, hello. My name is Mindy Jensen, and with me as always is my compassionate co-host, Scott Trench.

Scott:
Thanks so much, Mindy. Great to be here.

Mindy:
Scott and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting.

Scott:

That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business or deal with the financial aftermath of losing a loved one, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.

Mindy:

Scott, today’s episode deals with death, the unexpected death of a spouse, and all of the administrative tasks, all of the financial tasks, all of the wrapping up of the life of someone who has since passed. And today, we’re going to share the different things that you need to understand that has to happen when you die without a will. Our purpose of this story is to encourage you to get a will, to get a trust, to at the bare minimum, name beneficiaries on every one of your financial accounts, so that you aren’t faced with these issues going forward.

Scott:

It’s a powerful story and an example of why it’s so important to get these I’s dotted and T’s crossed.

Mindy:

Yeah, and we fully recognize that having these conversations with your family, with your partner, is not going to be a fun conversation, but that doesn’t mean it doesn’t have to happen. You should be prepared. Every hour that you spend planning while you’re alive is a gift to your beneficiaries after you pass. You’re taking tens of hours off of their plate for every hour you prepare. So listen to this episode with an open mind and pen ready so that you can take notes so that you can also make sure that your beneficiaries are set up for success.
Before we bring in Renee, let’s take a quick break. Today we’re talking with my friend Renee, who lost her husband about 18 months ago in a freak bicycle accident. John passed away with no Will and Renee was the named beneficiary on most, but not all of his accounts. They had combined most of their finances, but again, not all. Renee is here to share what happens when you die without a will and to encourage you to have one prepared so that her story does not become your story. Renee, welcome to the BiggerPockets Money podcast. Thank you for joining us today.

Renee:
Thank you for having me.

Mindy:

Let’s get right into it. Let’s talk about the phone call that you received when you heard that John had passed away.

Renee:
Sure. So, I got a phone call, it was around 8:30 in the morning, but it was from a friend that he had been on a bike camping trip with. So he had left the day prior and they had bike camped in the foothills. And I had never met this friend who lives in town here, but this was the first time I’d ever heard his voice and he told me that there had been an accident and roughly where it was and asked if I could get there. And my first question was, is John, my husband conscious? And his friend said, no, but he does have a heartbeat and the ambulance is here. So from there I got information on the hospital where I needed to meet them, and I went to that hospital, and there I received the news that he had died.

Mindy:

What was your financial situation like at the time that he died?

Renee:
This is one of the ways in which we were really lucky and in some ways you could even call us prepared. We had been striving for financial independence since about 2016 or maybe even 2015, and we were very advanced on that path. We had made an eight-year plan back in 2016 that according to our salaries and our numbers, we were going to hit our goal number in 2024. And events transpired to really accelerate our path. We got higher salaries, we saved more, the market did really well, and we hit that goal in, let’s see, this would’ve been June of 2020. So we really beat our own estimates in terms of how long it would take us. So as of June of 2020, we were financially independent, we were newly living in Colorado. We moved here during the pandemic from San Francisco where we had spent just a year.
And we were faced with these questions like, okay, we hit our goal, now what? And for us, that looked like me going back to school because this was a thing I had always considered, and that was the time to dive into that. And for him, he was actually just newly working for a company, a software company that he really, really loved. And he felt like he had finally found the team and the manager and the culture that he had been looking for really his entire career. So even though we had reached these numbers, he decided like, okay, I’m going to stay here for a while, maybe another year, we’ll see how it goes, but I want to keep seeing how this goes.
So he was working and I was in school full-time for that year or so leading up to his death, and we were financially comfortable. We bought a new home here in Colorado, we settled. We were really happy with our home. We were starting to make it our own, it needed some work and some life. And so we were working on those pieces. So that was the financial picture at the time. Financial Future

Scott:
And so what happened when you got home from the hospital after he passed?

Renee: Financial Future
Yeah, great question. I think this is just some of the stuff that unless you’ve been through it, you really don’t know what that day and the immediate days after looked like. Right? So, I got home, I had spoken to one of his parents from the hospital. I actually had called that parent on the way to the hospital to let them know that I was going in and there had been an accident and I didn’t know what happened. And so I knew they would be waiting on the news. So I called them right away. A friend drove me home from the hospital and I was very much in shock. I was just stunned. I wasn’t crying or hysterical, it was just a blank stare situation. So I got home and I started calling people. I called his other parent who I hadn’t yet spoken to and ended up having to leave some voicemails and some texts.
That parent isn’t super available to answer the phone a lot, so I knew that would be a challenge. I called my own mother. I called my brother. I told a couple friends over texts, one of whom dropped everything and rushed over, so that was good. The sheriff came over because they had recovered from the scene, John’s wallet and cell phone and bicycle helmet, and they brought those to me. And they also came with what they called some type of advocate. I don’t know if it’s a victim advocate or a trauma advocate, but this person came equipped with a folder of information, okay, someone has just died, and here’s a list of mortuary services that you can call and here’s a pamphlet about what to do if the media is involved and this type of information. And she sat with me for a while and that was really nice. Financial Future
Her name was Melanie. And I called my husband’s boss. I actually really had a hard time reaching him at first because there’s no office, this is a remote company, there’s not an office number I can call and be like, can you please direct me to so-and-so? So there’s no published phone number. I couldn’t get through to anyone, I didn’t know their email addresses. So once I got my husband’s phone back from the sheriff, I was able to get into his Slack and message his boss that way and be like, I need you to call me, this is John’s wife. And so he did, and we had a conversation and that was a really hard one. I mean, they were all hard. There’s nothing about that day that was easy, certainly. And after a few hours, not even that long really, I got a call from the organ donation people, and my husband was, as you indicate on your driver’s license, he was an organ donor.
But what I learned later was that I, as his spouse, I could veto that, I could say no, even though those are his wishes, I’m not even sure what the right word would be, not your heirs, but whoever is next in charge, you get to decide. And so I could have said no, but absolutely I did not want to do, I wanted to say yes. But what that means is you have to spend about 30 minutes on the phone with them answering a lot of really personal questions about medical history, about sexual history, about drugs, all these things. And we had nothing to hide, but still at this particular moment, two maybe three hours after learning that my husband had died, I’m answering questions about has he ever visited a prostitute? Has he ever taken intravenous drugs? And I totally understand they need to know these things, and he wanted to be an organ donor, but it was absolutely a grueling conversation. Family’s Financial Future

Mindy:
Wow, I wasn’t aware of that. That seems like something that I don’t think they promote that in the organ donation. Just if you’re going to pass, check this box and then your organs will be donated. But to have to answer all of these questions, also do you know the answers to all of those questions?

Renee:
I did as it happened for nearly all of them, but I didn’t know his blood type. I think that may have been something they asked me. I could speak to his drug and alcohol history or his prescription medications. But yeah, realistically, there’s stuff that I probably didn’t know and I wasn’t really in a position to be researching the answers either. And I think they understand that and they want as much information as they can get. And it did not turn out that they were able to use much of his organs due to the nature of the accident. And his body had been without oxygen for a long time. And so I think that’s a big factor. I did learn later that they were able to use his corneas, and so that was meaningful to hear that, that came some months later that news.

Mindy:
So what happened next? Can you walk us through the logistical headaches that you experienced?

Renee:
Yeah. So the beginning was all about notifying people, family, friends, his work, I had to speak with the coroner. Because he died, the cycling accident that he was in, there were two of them riding and he was in the back and he had flown off his bike and struck a guardrail with his head and neck. But the person who was cycling with him, they were on a very curvy mountain road, and that person did not see this accident at all. So, in our county, any death that is unwitnessed requires an autopsy, which was news to me and it makes sense from the laws perspective or from a safety perspective. But that meant that I was having phone calls with the coroner and I had to choose a mortuary service. My friend, his name is Joe, who dropped everything and came over that morning.
He took the list that Melanie, the advocate, had given me for the mortuary services in our area. And he was calling to get price quotes and he was checking Yelp reviews, which sounds insane, but also, no, I don’t want to use a mortuary service that has umpteen one star reviews and everyone says they were terrible to work with. So it makes sense, but it’s also very jarring too. There was a lot of dissonance during this time. Okay, my husband just died, and here I am looking at prices for cremation. How is this real? It sounds so absurd, but it’s what has to happen. So logistically there was the matter of his cremation and choosing a place and then waiting for the coroner to complete the autopsy and then to arrange the movement of his body from the coroner’s office to the mortuary.
And then there are choices that you have to make even regarding cremation that I wasn’t aware of, what kind of vessel you want to receive the ashes in. There’s all kinds of fancy urns and there’s plain wooden boxes and everything in between. And you’re making all these arrangements at a time when your brain has really just shut down in many ways. You’re doing the best you can, but it is trauma capital T. And I was barely processing a lot of what was happening as it was happening. My memory was totally shot, my short-term memory, people would tell me things, I would totally forget them. So in terms of those first few days, as you asked logistically, my family, my brother flew out the next morning. Some of my in-laws came in that same day actually. And then there were just people around, Mindy, you were one of those people on day two or three when you came over with various other friends and people were in and out. I was spending a lot of time staring at the walls, just really not processing what was going on around me.

Mindy:
I think it’s really difficult to even fathom all of these things that you’re supposed to be processing just on a regular day, on top of having to process the very sudden passing of your husband who was 37 at the time, and in great health, this was not something that you had prepared for at all. Had you discussed end of life plans together? I mean, because I haven’t discussed them with Carl, I’m like, I’m just not going to die, so that’s my plan, which is not realistic. Have you guys had this conversation at all?

Renee:
Yeah, actually, this is another of the ways that I weirdly consider us to have been very lucky. We did have these conversations many times, and we didn’t necessarily have them that seriously. It wasn’t like, okay, really when I die, I want x, y, and z, it was just like, oh, if I die, this is what you should do, blah, blah, blah. Okay, moving on with our day. So I actually knew that John wanted to be composted. This was what he wanted to happen to his body should he die. And that’s great, and I support that, but also our state is not a great state for that to happen. This is something that varies from state to state regarding the facilities they may have that can actually achieve this. And in Colorado at that time, the one option that was on the table, I forget the proper name for it, but it was some version of aqua composting where they put you or they put a body in some sort of container and they add water and some chemicals that dissolve you.
And then that water can be used to fertilize things. And it’s so funny because I see the face you’re making, and I have the very same reaction to that. So I can get behind the wrap me in a shroud and plant me under a tree, that’s fine. But this, put me in a container and dissolve me, I could not conceive of that. And I was also really lucky because many times John and I, in having these conversations, he had said to me, but really if I’m dead, whatever’s easiest for you is fine. And I so appreciated that we had had that conversation because if all I had known was that he wanted to be composted, either I would’ve done the aqua thing and really hated it and just been not having good feelings about it at all, or the other alternative was I could have shipped his body to another state that is more prepared for this.
Specifically Washington has facilities for this where it’s more like, okay, you’re in dirt and you’re becoming dirt, and okay, you can do something along those lines. So a thing that I’ve told many people since is that if you have specific niche desires for what happens to your body when you die, you really need to make those arrangements in advance, do the research, find the company, be super clear about your intentions in advance, because if not, then what you’re doing is you’re leaving that burden to your heirs or your loved ones, and they’re going to be made to handle it at a time when they’re least able to handle anything, when they’ve just been hit with this horrible news and they’re just breathing moment to moment, and then you’re going to try to make them do this research on how to compost in another state and how to ship a body.
I mean, I was in no position to do that. And I was very, very thankful that John and I had these conversations where he had given me this blanket, do what’s easiest for you. And that’s how we ended up going with cremation.

Mindy:
I think that’s a really great point. The two traditional are burial and cremation, but there are a lot of different options, and I can understand why somebody would want to do that, but that’s a really great point if this is something that you feel passionate about, then make sure that you have done the research yourself. I like that.

Scott:
When did you start to realize that you’re going to need to tackle money and other financial aspects of John’s death?

Renee:
Yeah, so that happened pretty quickly. I knew that we had various accounts with separate names that were a holdover from much earlier in our marriage when we had pretty truly separate finances. And that changed a lot over time. But we had not bothered to do the administrative legwork to make it official on paper. In practice, we were combined on all fronts, but on paper we were not. So I knew that, and in particular what I knew is that the one account that really funded every aspect of our lives was our main investment account, which was held at Charles Schwab. This was an account that John had opened before we were married, not that long before we were together, but we were not married yet. And because Schwab had truly exceptional customer service, a great user interface, very responsive staff members on all fronts, it became our default account.
We just kept most of our taxable investments there. And it also had a checking account from which we auto-paid the joint credit cards that we all use, that bought our groceries, that paid our mortgage, that paid all of our utility bills, all those things came from this one account. And the unfortunate truth is that account is the only account that turned out to not have a named beneficiary or to have me as named beneficiary more specifically. And so therefore, in that very beginning, I knew that this was going to have to get figured out. So I couldn’t tell you what day this was exactly, but it was pretty early on, maybe day four or five when I was like, okay, because the mortgage was coming out of that account, everything that was getting paid and okay, I have to live in this house.
There was so much to think about doing. But the way that I think of it now and looking back, my response to the financial aspects was very much coming from, it felt like a threat response because I knew that this was going to take some doing. At the time, I had no idea what it was going to entail or how poorly it would turn out in some ways, but I knew that it was going to be messy and that I was going to have to really get my act together and be organized to tackle this. And I think part of that was also just my own personality and how I cope with things. I’m a very organized person, so if I’m feeling stressed, I declutter my house, I get rid of extra things, I’ll organize my filing cabinet. I’m one of those people. And I had similar impulses here.
And actually a thing I could specifically point to, my brother was here for a few days, he flew in the morning after John died, and on day two or three of his visit, I was like, I’m going to need a filing cabinet. There’s going to be so much paperwork, let’s go to the thrift store. And so we went to the thrift store and we bought a filing cabinet. And this is, in retrospect, one of those moments where I have such dissonance where I’m like, okay, my husband had just died, my entire life had imploded, and I’m at the thrift store buying a filing cabinet. What? But for me that represented order, an organization, and this is how we get through this. This is how I get through things, and so here we go.

Mindy:
Yeah, anybody who tells you the process to grieve and how you should be doing it and the things that you need to be doing, they are wrong. And if going to the thrift store is what you need to do, do it. And we spoke with Jordan Clint on episode 395, and he said he went back to work within a week, and that’s what he needed. He couldn’t just sit around doing nothing, he needed this to be done. So you’re not the named beneficiary on this one rather major account. What happens to the account when you aren’t the named beneficiary?

Renee:
Yeah. So sometime in those early days, I got in touch with Schwab and notified them of John’s death. And very quickly they put me in touch with, they have a whole department that’s like an estate handling department for what happens when people die. And I got a direct line to a specific person who was my person that I would work with through the whole process, and they were really fantastic in that way. And so she let me know after a couple of days, there were other accounts held at Schwab as well, an IRA and some 401ks that had been rolled over. And so she called me in a few days and was like, okay, so here’s the story. You’re the named beneficiary on all these other accounts, but not this one. It didn’t have a named beneficiary at all. And that again goes back to the fact that it was open before we were married.
So I thought, and John also thought this was something we had actually talked about many times, we were both under the impression that if one of us died, then all of our assets would automatically revert to the other of us. This was just, we’re legally married. We had been for nine years, we thought that was how it worked, absent some specific will or beneficiary designation that directs things to someone else. We assumed that as two married people, the death of one’s spouse would mean the other spouse inherited everything. And that turned out not to be the case. And I found that out on Google in a handful of days after John died. And then Schwab in telling me that I was not the beneficiary reiterated that, and that’s what kicked off the probate process.

Scott:
Now, is this different state to state and would you mind sharing what state you were in previously?

Renee:
Sure. So it’s definitely different state to state and what this is called our in test state succession guidelines. So every state has them, and these guidelines are the ones that govern what happens to your assets if you die without a will, and/or without a beneficiary designation because that’s the first level of defense in that beneficiary designations, supersede even a will. So if I have a will that says, I want my cat to get 100% of my assets, but this one account that has 50% of my assets has my brother as a beneficiary, that’s the one that wins. So beneficiary designation supersedes a will.

Scott:
So that includes if you have a will that say, I want everything to go to my wife, and then your account does not have a beneficiary, does that account go through the testate guidelines?

Renee:
I think if you have a will that specifies where you want everything to go, then you’re safe. But if you have that will and your beneficiary designation contradicts it in some way, so not the absence of a beneficiary, but the specification of a different one, that will win that designation. So yes, these in test state succession guidelines, they’re different for every state. We live in Colorado. And so in Colorado there’s a certain set of guidelines for what happens if you have children, but you don’t have a spouse. If you have a spouse but you don’t have descendants, or if you have a spouse and you do have descendants, but maybe one of you has a descendant from a previous relationship, if you have parents, there’s all these things. In any given state, there’s maybe about eight different designations that will dictate what happens to your assets if a will is not in place.
So, in my particular case, we live in Colorado now, but the year prior we were living in California, and if we had been living in California at the time of his death, I as the spouse would’ve inherited basically everything. California’s a community property state, and they define community property as assets you’ve accumulated during your marriage. Our marriage is when we both accumulated the bulk of our assets. I could say that prior to being married, maybe John had something along the lines of 30, $40,000 in assets compared to the point when he died, when we were financially independent, obviously it’s a very big difference. So the vast majority of that would’ve been considered community property and therefore, again, in the state of California would have come to me. But we didn’t live in California, we live in Colorado and in Colorado, the rule is if you have a spouse and living parent, what that means is that your spouse inherits the first 300,000 of your intestate property, plus three quarters of whatever remains.
So that’s not nothing, that is still the majority. That’s very true. But for those of us in the financial independence community who are maybe sitting on seven figures worth of assets, depending on what accounts or whatever, that could still be a very significant chunk the piece that remains, and that’s what I learned in these pretty early days following his death, was that not only was I dealing with, okay, my husband just died, and in the beginning you can’t even begin to wrap your brain around everything that that’s going to mean, right? It’s like looking at the sun, it’s too bright. You can only take in bits of what this means at a time. So you’re dealing with that grief, but also to then get this information about, oh, I thought that our assets were safe. I thought that we were fine because we were married. And then to learn that, oh, hey, guess what? Other people have a legal claim to this. That was very jarring and very scary.

Scott:
So how did this play out and how did the situation impact your relationships with your husband’s family?

Renee:
Yeah, so I learned about this in those early days, and I also at that time had to retain an estate attorney to navigate the probate process. And that’s just required when there are any assets that have to go through probate. So you have to do that. You have to file certain papers with the court, somebody needs to be appointed as an executor, all these things. So I got the attorney, I was appointed as executor, and there came a time when it was like, okay, they had to be notified as beneficiaries of the estate that this was happening, and this was real, I guess. So I didn’t want them to just get a letter in the mail. At that time, we had a good relationship. We had never had any disagreements or falling outs. John’s parents were divorced, and so I had to figure out how I was going to notify both of them, and he had a stronger relationship with one parent than another.
And I think as a result, I also had a stronger relationship with the parent he was closer to versus the other. And so I decided to talk with that one first. And I actually did it on the day of John’s memorial because nobody lives close by, and I wasn’t sure when I was going to see any of those people, when I say those people, I mean anyone who attended, most people flew in for this. So I wanted to use the opportunity to have a face-to-face conversation. And so I sat down with that parent and I said, I want to let you know that you’re going to get this letter in the mail from the court, and here’s why. And I gave the broad outlines of the situation because John died without a will, there’s this one account that I wasn’t on, and it’s subject to these laws, and it means that you are on paper entitled to a piece.
But I also wanted to tell that parent I’m not telling you that John had a will that said you should get X dollars or X percentage, it wasn’t like that at all. This is a really big surprise, and we didn’t plan for this, we didn’t know this, and we actually talked about it many times, and we assumed that if one of us died, the other one would keep everything. And so that parent listened and then said to me, listen, I want what John would want, and you’re the best person to know what that is. So if you think the money should stay with you, then that’s what I want too. And I said, thank you, I really appreciate that. And that was the end of that conversation. So that happened in October. And in December, I got word through my attorney that John’s parents had both retained counsel and they intended to take this money.

Mindy:
Do you know why they had a change of heart?

Renee:
I don’t. There was a interim step where they had retained an attorney and they sent a letter asking for more information. They wanted to know what was in the account, what were the assets in question that stood to be distributed. And so it was after learning how much money there was that they decided to move forward.

Scott:
So, I mean, this is terrible, but what happens next? How do things proceed from there?

Renee:
Yeah. Well, there’s many levels of what happened next, I’d say because that turning point had a big impact on my own grief and healing, if we want to call it that, or mental health at the time, it really precipitated what I consider in retrospect to be the rock bottom of my grief. Because to me, what it felt like was it was additional loss. And I don’t mean the financial loss, I mean the loss of the relationships with my husband’s parents because I did not see a way that I could continue to have them in my life given this. It’s very complex, and I’m sure they have their own side of things, but for me, I don’t understand their decision, and I don’t understand how I could move forward with them in really any way. So what I was mourning at that point, it was like, okay, I’ve lost my husband and everything that meant, everything about my day-to-day life about our home.
I don’t mean losing our actual home, but I mean the home that you make with the people that you love, he was not there, he was gone every single day. So there’s that loss, there’s the loss of the entire future we had planned together. We had lots of ideas and dreams now that we had reached financial independence and we had settled in a state that we really loved and we had been making friends and all of that was gone. My entire future was just a blank at that point. And then to tack on this additional loss of the two other closest people, the two other people who loved him the most, and now I can’t fathom continuing to have a relationship with those people. And then of course there is the fact of the money that they were going to walk away from. I think everyone who keeps an eye on their own assets and is checking their fine numbers and wondering, okay, are we safe?
Is a downturn coming? What do we need to plan for? What are the emergency situations we need to plan for? This was never in our plans. That someone else, any other people could walk away with a chunk of our assets. So it just really impacts the margin of error. Our fine number would’ve been different if we had known that down the road someone could just walk away with six figures of our money. So it’s very threatening, it’s emotionally threatening, it’s financially threatening. It absolutely puts me on the defensive, I think with good reason. There was and continues to be a significant fallout.

Scott:
The account in question, were you able to continue using this to pay for groceries and the mortgage during this period or did you have to find another account to use? Logistically, were there day-to-day issues that continued during this process?

Renee:
Yeah, great question. I could not continue using that account. It was not considered my property, I was the executor, but I could not access it. So I had to make other arrangements. And there were other assets, other things I could access, but it was a little bit suboptimal, pulling money from places, you know how that can be and the timing and whatever. I think I ended up taking a distribution from a Roth IRA just for cash flow for the following six months because the major distributions from that account did not happen until very late last year.
So it was over a year after he died that I actually got most of that money into my accounts that I could use and access freely. So it was a very big shift and change because when he was alive, that account funded our entire life. And when he was gone, it was effectively frozen, it got put into the estate. Yeah, I say the estate’s name, I don’t know if that’s quite accurate, but it was no longer in his name, it was now the estate of John and could not be used to pay day-to-day expenses.

Scott:
And this account was totally considered community property?

Renee:
No, if we had lived in California, it would have been, but because we live in Colorado and because my name was not officially on the accounts, it’s considered in test state property, it had no beneficiary, it was not addressed in a will, so it was part of his estate and had to go through probate.

Scott:
But this was an account that your paycheck went into when you were working, for example, during this?

Renee:
Actually, I don’t think my paychecks ever went into that account, his did. Mine did not. But it is the account from which our mortgage was paid, all of our utilities, we used a joint credit card for all daily expenses, and that was paid from this account. He was always the higher earner. So it was just one of those things, it just worked out that way. Yeah.

Scott:
And then what happened with the other accounts where you were named the beneficiary? Was that process make a phone call and things go smoothly, or was there work that was required to deal with those accounts?

Renee:
Yeah, it was a really mixed bag. So there was an enormous amount of overall accounts of all kinds that had to be dealt with. So there were old 401(k)s, some of which had been rolled over into Schwab or another provider, some of which were still with old providers from old employers that no one had looked at in years. When I say no one, I mean neither of us. They were there and we knew they were there, but we hadn’t bothered to do the paperwork to bring them over to an institution where we did much of our banking. There were credit cards that had to be closed or just I had to notify them, and those companies really ran the gamut. I can tell you that, American Express was absolutely the best to deal with, and Citibank was absolutely the worst. So they were a total nightmare to deal with.
And lots of times you’re calling and you’re getting these call centers often in another country, and you’re having to say on the phone, over and over, my husband died and I’m calling to close his account, or my husband died and I need to transfer this account from his name into my name, and I can’t even tell you how many times I had that conversation. And you get some wrote response, it’s like, oh, yes ma’am. So sorry to hear that, let me transfer you to our blah, blah, blah department. Occasionally you get someone who talks to you like a human. That’s what happened at American Express and at Schwab, they had dedicated departments who were just really good at this, and I really, as a bereaved and grieving person really appreciated that, it did make a really big difference. And then there were other things like the mortgage company, which were a total and complete nightmare to deal with.
The mortgage was unique because we held the house together, we were both on the title, but I wasn’t on the loan, I wasn’t on the mortgage because when we applied for it, I was a full-time student. I didn’t have income to add into the equation, so he just did it. And it was a nine-month process that involved notarizing four different sets of paperwork, and they would reject it for this reason, they would reject it for that reason, we couldn’t get an answer. They only communicate through this special online messaging portal. There’s no direct phone number, there’s no estate department that you deal with that handles things when people die. So, all these things, it’s like they add additional levels of trauma when you’re just really not in a place to deal with them to have patience or I don’t know, it was really, really difficult in many ways.
So even things like his LinkedIn account or his Facebook account, these things were just all over. And I kept thinking of new ones like, oh, I have to see if I have to do anything for his GitHub profile. Is that a paid service? I didn’t know. I remember texting his boss at one point being, I know GitHub’s a thing, my husband was a software developer. Is that a paid account that I need to stop payment on or does it just stay up? And it’s exhausting. I mean, the business side of closing down someone’s life on paper is enormous and it takes hundreds of hours of work, and you’re forced to do it at the time in your life when you’re absolutely least equipped to do so.

Mindy:
I think that it’s really unfortunate. The mortgage company specifically, and I know this because Renee and I worked on this together in some aspects, I was her agent helping her buy this house and then trying desperately to get this resolved. And John is not the first person to pass away while holding a mortgage. And I think it’s almost criminal that the mortgage company didn’t have at least a compassionate person to speak with, but an entire department that helps you through this and gives you a little bit of a heads-up. What it turned out is that this was some sort of governmental issue that you needed FHA approval or something in order to get your name on the loan or no, Fanny and Freddy or something. You needed some sort of high up government approval to put your name on there, and it’s just a process that takes time.
A great mortgage company, you should probably know this and give me a heads-up in advance. Every month we were trying to finish this one aspect so you could get it off your plate and focus on the next thing. And every month you were told, oh, you didn’t fill out those documents, or hey, we don’t have any answer for you, or hey, sorry, call back again. They were just so unhelpful and so uncompassionate at this awful time. If you are a big company that deals with people, you are going to have to deal with the death of a client and you should have a department or at least one person who is trained to handle the shutting down of that account.

Renee:
Yeah, it was not great. And there were also some absurd/borderline comical moments that happened. So I know that sounds crazy, but one of them, it was the 401(k) at what had been his current employer when he died. And there’s a whole process where when you have to send a death certificate, and I was the named beneficiary, and so that all worked out okay, but when they eventually ultimately sent the check that I would then roll over into whatever IRA, there’s a stub that comes on the top of the check and there’s some office language on it with some numbers, whatever. On there, it said in huge capital letters, death mail. And I’m like, okay, today I opened the mail and I got this check from this 401(k) and it says death mail at the top, that’s not a great day no matter what else is happening.
And I actually sent feedback about that to his employer so they could pass it on to the 401(k) provider. And they were so sorry, and oh my gosh, Renee, that is just unacceptable and we’re definitely going to take it up with them, and I really appreciated that. But it’s just like, is there no one human at these companies who can just think through this a little bit and be like, oh, is that what you’d want to get in the mail?

Scott:
Well, what do you recommend for other folks that look, no, no, I’m 32 in good health and don’t expect to pass away anytime soon. What would you give advice for me and my wife or other folks to follow to avoid some of the problems that you had to deal with?

Renee:
Yeah, so there’s a few things. The first is go through all of your accounts and make sure your beneficiaries are what you want them to be, whether you have separate finances or not, whether you have wills or trusts in place, this is still a really important step and it’s your first line of defense. And often the easiest thing to do. If you’re a Schwab customer, you can log in and take care of it in a few clicks, the same at Vanguard. This is not a difficult task. So that’s something I would encourage everyone to do today. And really what kills me about this is that if I had heard a story like this before my husband died, I know that on any day of our marriage, I could have come home and been like, oh my gosh, I heard this crazy story.
I know we thought that if one of us died, everything would go to the other, but it turns out that’s not true, can we please just go through and update all of our beneficiaries? He would’ve said, yes, absolutely. We would’ve done it right away. He would’ve had no qualms or reservations about this because that’s what we wanted and that’s what we expected. So that’s the first thing I’ll say to people is make sure your beneficiaries are what you want them to be. And that goes for all of your financial accounts, all of your 401(k)s, your house, your properties. There’s such a thing as a transfer, transfer on death deed. So if you want your home or other real estate to go to someone who is not currently holding it with you in joint tenancy, then you can get a transfer on death deed so that if you die, it does go to them.
So these are all things I would suggest people take care of. The next thing is to explore a will and/or trust. A trust is the best, it’s also more expensive than a will, so decide what’s right for you. But if I had it all to do, again, in addition to the beneficiary step, I would make sure that my husband and I, even if we were still holding assets and different names, which I don’t think we would’ve been if we’d on top of the paperwork, but even if we were, even if you wanted to still have separate finances, you can still make sure that a jointly held trust is the beneficiary in case you die, or you can still make sure that a jointly held trust is what holds all of your accounts. And so like, yes, it’s yours for now, and if you die, then it goes to the trust and you can outline those.
So those are the two big things. And then the last thing I would say to people, and I know there’s a link that I sent to Mindy that maybe can be shared, but I would Google what your state’s in test state succession laws are so that you have all the information so that you’re not surprised. Again, we lived in Colorado, we lived in California, and before that we lived in Michigan for many years, and this would’ve all been very different in all three of those states had he died in any of those three. So it really matters a lot where you live and you should know what laws are on the books in your state.

Scott:
We had Erin Lowry from Brook Millennial on hundreds of episodes ago now, but she had a point about marital agreements, and the point was, you have a marital agreement when you get married, it’s the divorce laws of your state essentially. So you have a will, if you don’t have a will, it’s the laws of the state of Colorado or whatever state you’re living in. And some folks I’ve talked to have actually been fine with that and said, I don’t need a premarital agreement or a will because I would do it exactly the way the state has done it. But I think that’s going to be the exception, not the rule.
And I think it’s so simple and so powerful to just follow a couple of basic steps and designate where you want your money to go in a very simple document, even if you have very little assets. And then when you get into the five, six figures, if you’re fine and you don’t even invested in the process of setting up a trust, something’s wrong, you should be doing that. I think, in my opinion. I mean, it’s just too high stakes, too many relationships can be destroyed if that’s not in place.

Renee:
Absolutely. And I consider my relationships with my in-laws to be casualties of the fact that we did not have a trust, we did not have our beneficiaries correctly designated. If not for those errors, I strongly believe we would still be in each other’s lives. And in all this, the money part sucks. There’s no way around that, and I don’t feel good about the impact it’s had on my fineness and especially after a year like last year where the market was down 20% and sequence of returns risk is real and all these things. But the biggest loss for me, the one that I will mourn along with my husband himself for the rest of my life, is that they chose this path knowing his wishes.

Scott:
Well, Renee, thank you for sharing this. I think it’s a powerful lesson. It’s a hard lesson. It’s really hard to talk about, and we appreciate your bravery and transparency in talking through all of this. And again, I think it’s just a reminder, a very powerful one to, I mean dot these I’s and cross these t’s, make your wishes, document them in the appropriate fashion, do it. It’ll take a few minutes to do a baseline level of it and perhaps a few dozen hours to do it the right way with a trust setup, but a few thousand bucks. But it’s absolutely worth it if you have anywhere close to a level of financial independence, a financial independence level of wealth, and it’ll save a lot of time and pain.

Mindy:
Renee, thank you so much for your time, sharing this story. It’s hard to hear, and I’m sad that you had to go through it, but I’m so happy that you were able to share it with our listeners so that perhaps they don’t have to go through it too.

Renee:
Thank you for letting me share it. I appreciate it.

Mindy:
All right, Renee, we will talk to you soon.

Renee:
Sounds good.

Mindy:
All right, Scott, that was Renee, and that was a really powerful episode. I’m really thankful to Renee for coming on and sharing her story. I want to reiterate the things that she said at the end of the show. She said, number one, check all of your accounts and make sure that you have named beneficiaries on every one of these accounts. And that’s really going to be the easiest thing you can do right now. Log into every account you have and make sure that somebody is going to inherit this account, and make sure it’s the somebody that you intend to inherit this account. Number two is get a will or a trust. Create this with… I mean, these can be really inexpensive. This doesn’t have to be a tens of thousands of dollars option. You can really do an easy will. We’ve had a sponsor in the past called trustandwill.com that can help you navigate the information that needs to be found in your will.
Another thing, both this episode and episode 395 with Jordan Clint talked about a password plan and a login information box. We’ve got the emergency binder from the family emergency binder. Emergencybinder.com can also start you down the path to the information that you need to gather up. Again, that will help you find these accounts that you are needing to make sure are named beneficiaries. And it’s like I said before, the planning you do while you’re alive is the gift that you’re giving to your beneficiaries after you pass.

Scott:
It’ll only take a few minutes to update the names and accounts and your beneficiaries in your accounts. It’ll take maybe an hour to get a simple will together, and I think that’s all you really need for someone with less than a few hundred thousand in assets. And then on the will side, just a reminder again, don’t just spell out where the financial assets go, spell out what you want done with your body, with all of the funeral arrangements, those types of things. Because if you don’t do that, then your grieving spouse is going to have to figure it out, or your kids or whoever is next of kin are going to have to figure that out in the aftermath of your death, just don’t do that. This is the exercise that I think we can all take responsibility for as individuals.

Mindy:
Absolutely. I think that’s a great point, Scott. All right, should we get out of here?

Scott:
Let’s do it.

Mindy:
That wraps up this episode of the BiggerPockets Money podcast. He is Scott Trench and I am Mindy Jensen saying, take care of yourself and your family. BiggerPockets Money was created by Mindy Jensen and Scott Trench, produced by Caitlin Bennett, editing by Exodus Media. Copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.

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