Four documents, and the will comes last
The one people pay a lawyer for is the one that governs the least.
| The Walkthrough | ||||
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Good morning. Two things before the list, and the first one is embarrassing.
Item 1 — correction to file 003
Yesterday's letter went out with Friday's date on it. The header said Friday, the checklist told you to do something over the weekend, and the last line promised you Monday's letter on a Monday morning you were already having. Three mistakes, all the same mistake, all mine. The version in the archive has been fixed.
Item 2 — the four, in order of power
Second thing: most of this one is outside my lane, and I want to say so before you read it rather than after.
Property claims were my job. What I know about the rest of the paperwork I learned in 2019, sitting on my mother's kitchen floor in Memphis with four boxes and a legal pad, working out which of her documents actually did anything. It took a weekend and a phone call to a lawyer who charged me for forty minutes and was worth every dollar.
Here is the part I did not expect. The four documents that decide where a household's money goes are not equally powerful, and the one people pay the most attention to comes last.
| 1. |
The beneficiary form Retirement accounts, life insurance, annuities. Whoever is named on the form filed with the institution receives the money. This is a contract with a company, not an instruction to a court, and the company follows the form it holds. |
| 2. |
How the account is titled Bank and brokerage accounts held jointly, or carrying a payable-on-death or transfer-on-death instruction, go straight to the named survivor. My mother had one of these and had forgotten it existed. |
| 3. |
The deed The words on the deed decide whether the house passes automatically to a co-owner or goes through the estate. Two houses on the same street can be held two different ways, and the difference shows up years later. |
| 4. |
The will Everything the first three did not already dispose of. For a good many households that means the furniture, the car and whatever is in a sole-name checking account. |
Details vary by state and by the terms of each account. I am not a lawyer and this is not advice about your situation.
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The will is the one people pay a lawyer to draft and keep in a safe. It is also the one that governs the least. |
Item 3 — how firmly the form holds
There is a Supreme Court case on this, decided in 2009, called Kennedy v. Plan Administrator for DuPont Savings and Investment Plan. A man divorced. His ex-wife gave up her claim to his retirement plan in the divorce papers. He never changed the beneficiary form. He died, the plan paid the ex-wife, his daughter sued, and the Court held that the plan administrator was right to follow the document it had on file.
Some states automatically strike an ex-spouse from beneficiary forms at divorce, which sounds like it solves the problem. It does not solve all of it: federal law governs most employer retirement plans, and those state provisions do not reach them. Your IRA and your 401(k) can behave differently after the same divorce, in the same state, on the same afternoon.
Item 4 — scope, ten minutes
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The money meter
| 30-year mortgage | 6.65% | from 6.67% |
| 15-year mortgage | 5.95% | from 5.96% |
| Fed funds target | 3.50–3.75% | held 29 Jul |
| Inflation, 12 months to July | 3.4% | core 2.5% |
Freddie Mac PMMS, 20 Aug 2026. Federal Reserve, 29 Jul. BLS, 12 Aug.
Adjuster's note
I have been asked whether it is better to hold accounts jointly or to use a payable-on-death instruction, and I have read enough now to know that I cannot answer it. The two behave differently while everyone is alive, differently again on death, and differently depending on who owes money to whom. My mother's arrangement suited her circumstances and would suit mine badly.
What I can say is that whichever one is on your account got there at some point, possibly at a counter, possibly in 1994, and it is still running.
I have not called my carrier. Day four.
Tomorrow: what the adjuster decided before ringing your doorbell, and the twelve times somebody talked me out of it.
Read the policy before you need it.
— Rita
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THE WALKTHROUGH · BUFFALO, N.Y. · SIX MORNINGS A WEEK Nothing here is insurance, legal or financial advice. I am a former claims adjuster, not an agent, a lawyer or a financial adviser, and I do not know your circumstances. Rules on titling, beneficiaries and probate vary by state. Ask somebody licensed. |
