I also have five siblings.
I am very close to my youngest sister who is on disability.
I paid my home off two years ago, and I have some 401(k) savings.
These are thebiggest money secrets rich people don’t tell you.
I owe no money to anyone.
I have a $10,000 life insurance policy I put in my sons name.
Can he fight my decision in court to get the money and house after I pass on?
-L.
Dear L.,
I cant promise you that your son wont fight your decisions in court.
But its actually quite difficult to win such a challenge.
Your son probably has standing to contest your will and beneficiary designations.
That doesnt mean hed actually win it just means hed have the right to make the case.
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Winning is much more difficult.
Or hed have to prove that the relevant documents werent signed in accordance with your state law.
He doesnt have a right to an inheritance just because he feels entitled to one.
One way to avoid a court dispute is to keep as many assets out of probate as possible.
Retirement accounts, like your 401(k), pass directly to whomever you name as your beneficiary.
So as long as your sister is listed, that money will avoid probate and go directly to her.
Its a little more complex when youre dealing with your home.
One option to explore is putting your home in a revocable trust and making your sister the beneficiary.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Unlike probated property, assets that pass through beneficiary designation wont become part of the public record.
But he wouldnt know what retirement and bank accounts exist since the details would be private.
Assets that typically avoid probate will be distributed by a court if theres no living beneficiary.
In that event, its quite possible your son would inherit your home or money.
But since your sister is on disability, you should also discuss how an inheritance will affect her finances.
The fact that he has such easy access makes me worry for your safety.
The odds of your son clawing money out of your estate are pretty slim.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
Send your tricky money questions to[email protected].
When you log into your bank account, how do your savings look?
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
