My Aunt’s Close Call – Bob’s Market Observations

By Robert A. McCormick


This is a story of a close call.

I had an aunt who passed away a couple of years ago. Several years prior to her death, she moved into a retirement community. She structured the purchase of her unit so that she or her estate would be refunded most of the purchase price upon her moving out or upon her death.

Shortly before her passing, I needed to refresh my memory of how the refunding process would work. I had assisted her with her finances over the years, including the purchase of her unit. As I reviewed the terms of her contract, I came across her beneficiary designation form. This form specifies who receives the refund proceeds if she is no longer alive.

I about fell out of my chair.

At some point along the way, unbeknownst to me, she specified that I alone would inherit the full refund amount. It would not be split according to her wishes contained in her trust like all her other assets, but rather, flow directly to me. This was not going to be a small check.

My first thought – for a split second – was “I must be her favorite.” Once I regained my senses, I had to admit that was not true. Regardless, designating me as sole heir wasn’t consistent with her estate plan. And it was sure going to make future family get-togethers less pleasant. So I sat down with her to find out why she did what she did. Fortunately, she still had her wits about her, which meant we could have a conversation and she could change her beneficiary designation.

Her reason for leaving me all her refund monies also surprised me. She said “I wasn’t sure what to do so I wrote in your name, knowing you would divide it up the way it should be.”

My aunt was a smart person. But clearly, she did not understand the world of estates. Beneficiary designations don’t work like this. If I had not stumbled across her form and asked her about it, I would have no idea what her ultimate intent was on the matter. I would have only been guessing… and I could have guessed wrong. Even if I had known, carrying out her true wishes would have required unnecessarily difficult actions on my part to fix the situation.

Not because of this, but in the spirit of my own way too close for comfortexperience, we at TCO are starting a monthly blog. Concisely written in plain English by several of my attorney colleagues, it will cover need-to-know issues when it comes to estate planning. Stay tuned as the first one should arrive in your inbox later this month. In the meantime, if you are not sure who you have named as beneficiaries on relevant accounts (IRAs, retirement plans, insurance policies, and yes, retirement unit contracts), now might be a good time to review. Give us a call if we can help.


“Death is not the end. There remains litigation over the estate.”
Ambrose Bierce

Market Returns

February delivered another strong month for the stock market, with the S&P returning 3.2%. Year-to-date, it is up 11.5%, erasing all of December’s losses. The Fed gets a lot of the credit, having communicated an easier, more market-friendly monetary policy going forward. If the Fed changes rates in 2019, the market now considers a reduction to be more likely than a rise.

Robert A. McCormick
Senior Executive Vice President and COO

(918) 744-0553