5 Steps to Becoming an Informed Beneficiary

Your loved one has passed, a few days or weeks have gone by, the phone is ringing from various “helpful” people and you may not fully understand the language of Estate Settlement, Wills and Trusts, Life Insurance, Retirement Benefits or Taxes. The decisions to be made and the uncertainty that they may be causing you is the subject of this blog.

Here are 5 steps that you can take to gain control, make wise decisions and be an Informed Beneficiary:

  1. Gather basic information: You will need the Last Will and Testament, Bank and Brokerage Account Statements, Life Insurance Policies, IRA Statements and Designation of Beneficiary, The Trust Document(s), Deed(s) to Real Estate, and a list of anything of significant value: Art, Antiques, and Coins… If there was ever an appraisal on the Art… then please include that in your file of important documents.
  2. If possible, find the attorney who wrote your estate plan (Wills and Trusts) and call to have her read the Will and Trust to you in plain English so that you can take careful notes about what rights you have within these documents. First State Trust Company will be happy to do the same without charge. Please see contact information below.  
  3. Of particular interest to you as a beneficiary are the “dispositive provisions” of the Will and/or Trust. This is how the “Grantor” (the person placing money into the trust for you) wanted the money to be paid out to you and possibly other beneficiaries. Grantors of trusts generally want the money to enhance the lives of their beneficiaries and it is the combined efforts of the beneficiary and the trustee to maximize this effect. A typical trust may read “Trustee shall pay all net income, and may pay principal for Health, Education, Maintenance and Support.” The trust may also say “Trustee shall consider all other sources of income and capital available to the beneficiary.” These words and words similar to them were derived by decades of cases dealing with trusts and understanding what they mean to you is of utmost importance. Understanding what the trust can and cannot do will help you in the long run.
  4. Creating your personal budget, even if you’ve never made one before, will give you even more peace of mind. Again, First State Trust Company will be happy to work through this process with you. Knowing what you spend is something that all financially successful individuals know because it lowers stress and helps them make smart day-to-day decisions with their money.
  5. Bringing it all together with your trust benefits, retirement plan income, insurance and other capital sources and then comparing your income to your expenses is the goal. Once you know where you stand, you can make adjustments and be at peace. At First State Trust Company, your Trust Officer becomes your advocate. He or she is bound to a duty of loyalty, bound to providing unbiased advice, without conflicts of any kind. Trust Officers administer trusts exactly as they are written, provide prudent invest advice, make distribution decisions that are wise for the long run and go the extra mile to enhance the lives of their beneficiaries.

Conclusions:

These steps will lead to a happier financial life, reducing the stress related to misunderstanding your circumstances and help your Trustee make wise decision with and for you.

I encourage you to reach out to me for a personal discussion regarding your trust and estate matters.

Mark J. Seski, Sr. Vice President, First State Trust Company, Mseski@FS-Trust.com (302) 573-5963

The posts expressed are views of FSTC and are not intended as advice or recommendations. For informational purposes only.

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FSTC is an affiliate of Fi-Tek Group, a premier provider of services and solutions to trust banks, RIAs, and hedge funds. FSTC provides trust accounting services through Fi-Tek’s industry leading proprietary platform, TrustPortal.