Q. I have a disease and I’m not expected to live more than a year. My husband and I don’t exactly get along and we have no children. I want my mother and my sister to get some of the money that’s in my name. What do I need to do to make sure that happens when I’m gone? I want them to get my insurance policy and my 401(k) plan, and my husband can have my part of the equity in our home and our checking account, which frankly, is not big.
A. We’re sorry to hear about your health, but we’re glad you asked the question.
There are moves you’d have to make to be sure your wishes are followed upon your death.
For starters, 401(k) plans are governed by federal law.
“Spouses are entitled to inherit the assets in the 401(k) account unless the spouse signs a written waiver witnessed by a plan representative or notary public consenting to the account holder’s selection of another beneficiary,” said Shirley Whitenack, an estate planning attorney with Schenck Price, Smith & King in Florham Park.
If your husband signs the waiver document, you can then designate your mother and sister on the beneficiary form given by your employer, she said.
As to the life insurance policy, you can request a beneficiary designation form and name your mother and sister as the beneficiaries of the policy proceeds, Whitenack said.
As to your home, if you and your husband own the home as tenants in the entirety, then your interest in the home will go to your husband by operation of law upon your death, Whitenack said.
If you own the home as tenants in common, then you should designate your husband as the person who will inherit your interest in the home.
“In the event that the reader does not have a will at the time of her death but owns the property with her husband as tenants in common, then the property will pass under New Jersey’s intestacy statute and her husband will inherit her share of the property anyway,” Whitenack said.
You also have to look at your checking account. If it’s held jointly with right of survivorship, then your husband will own all of the assets in the checking account by operation of law upon your death, Whitenack said.
“The reader should be aware that regardless of who she chooses as beneficiaries of her assets upon her death, spouses in New Jersey are entitled to an elective share of the deceased spouse’s estate, which is one-third of the augmented estate,” she said.
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