Who Gets My Money If I Don’t Have a Will?

If you died tomorrow without a will, who would actually inherit your money? You might be surprised to learn that having a will isn't always what determines who receives your assets. In fact, the beneficiary designations you completed years ago could matter more than you realize. In this episode of She’s Talkin’ Money, Shari Rash explains what happens to your money when you die without a will, how beneficiary designations work, and why the way your accounts are set up can make a significant difference for the people you leave behind. Using the example of a single woman with $590,000 across retirement accounts, brokerage investments, and savings, Shari breaks down which assets can pass directly to beneficiaries, which may go through probate, and how transfer-on-death (TOD) and payable-on-death (POD) designations can simplify the process. She also explores a common issue she sees when working with single women: parents who were named as beneficiaries decades ago are still listed today, even when financial circumstances and personal priorities have changed. You'll also learn why having someone you trust to handle your affairs matters, when a will may still be important, and why planning for incapacity is different from deciding who inherits your money. The takeaway: You don't necessarily need an elaborate estate plan to make sure your money goes where you want. But you do need to know who is listed on your accounts, how your assets will transfer, and whether those arrangements still reflect your wishes. If you're ready to make sure all the pieces of your financial life work together, learn more about financial planning with Shari at www. GWAwealth.com And if you know someone who hasn't reviewed their beneficiaries in years, share this episode with them. Be sure to like and follow the show on your favorite podcast app! Keep the conversation going on Instagram @shestalkinmoney https://www.instagram.com/shestalkinmoney/ Learn more about your ad choices. Visit megaphone.fm/adchoices

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  This episode is brought to you by State Farm. Football has a play for just about everything. You can go deep, keep it on the ground, or draw up something nobody sees coming. And whether you want to run a flea flicker or the tush push, you need a plan to fit your unique situation. That's why State Farm takes the time to get to know you so they can help personalize coverage for your life and budget. Now that's a solid game plan. Like a good neighbor, State Farm is there.

• 1:32Speaker 03

  Hey, everyone. Before we dive in, if you listened to last week's episode about Roth conversions when it came out on Tuesday and you're like, this doesn't sound very good. You're not alone. I accidentally uploaded the unedited audio instead of the edited version. And thanks to an awesome listener, Jane, who sent me a DM. She was like, hey, the audio doesn't sound very good. So if you started to listen to it and said, this sounds terrible and dropped off, go back and listen to it. I really enjoyed recording that episode. It's a question that comes up all the time. But a couple lessons from this. I am very reachable on DM.

• 2:17Speaker 03

  So if you send me a DM at she's talking money, I'm going to answer. It is, if you have a question, send me a DM. I'll, I'll answer it. And also a little peek behind the curtain. It's a one woman show over here, literally. And mistakes are human, right? So I just wanted to apologize if you listened to that episode. It was like, this is terrible. All right, let's get into this week's episode.

• 2:52Speaker 03

  So imagine you're 43, or maybe you are 43. So you don't have to think very hard to imagine this. But you're single, no children, and you've spent the last 20 years building a successful career. You have $400,000 in retirement accounts, $150,000 at a brokerage account, and $40,000 in savings. You don't have a will. Who gets your $590,000 if something happens to you? Here's what might surprise you. The answer could already be sitting in the paperwork you completed years ago when you opened those accounts. Maybe your parents are still listed as beneficiaries.

• 3:37Speaker 03

  Maybe your brokerage account has a transfer on death designation. Or maybe you've never thought about what happens to the money in your savings account. If something happened to you tomorrow, would your money actually go to the people you want? Today, we're talking about what happens when you die without a will? Why a will doesn't control every asset you own? And what you can do now to make things easier for the people you care about? I'm Shari, 20 years in personal finance, founder of GWA Wealth, and deeply invested in helping women actually understand their money. I've seen firsthand how often women are given

• 4:21Speaker 03

  bad, generic, one-size-fits-all financial advice. This is She's Talkin Money, the money podcast for women who make good money, but want more. So what happens if you die and you don't have a will? Dying without a will doesn't automatically mean the government takes your money or that every account becomes tied up in probate. There are two broad categories of assets. Assets that can transfer outside of your will, which are retirement accounts with valid beneficiary designations, life insurance with named beneficiaries,

• 5:02Speaker 03

  brokerage accounts with transfer on death TOD registrations, bank accounts with payable on death instructions, certain jointly owned assets, depending on how the ownership is titled, assets that may become part of your probate estate, individually owned accounts without effective beneficiary arrangements, a home titled solely in your name without another valid transfer arrangement, vehicles and other personal property, accounts where you haven't named a beneficiary, where your beneficiary has passed away and you haven't named a backup,

• 5:47Speaker 03

  or where you're specifically naming your estate as the beneficiary. Depending on the account's rules, those assets could end up going through probate. If an asset belongs to your probate estate and you have no will, state intestate laws have generally determined who inherits it. So what does that mean? That means your assets essentially go to the probate judge. And they say, okay, so-and-so is your next of kin. That is going to be who inherits your money. And that could be your brother that you haven't spoken to in 15 years.

• 6:31Speaker 03

  That could be a wayward niece who is just going to blow all of this money potentially. The, the courts don't care about personality challenges when they're deciding who is the next of kin. That's even more of a motivator. And honestly, that's really what gets my clients going. I'll say, do you have a sibling that you haven't spoken to in a long time? Or you may love them and speak to them all the time, but are they terrible with money? And you're afraid they're going to blow it? That's really what gets a fire under most of my clients butts to get their, to name their beneficiaries at least, or get a plan set up. Cause they don't want the state to decide who inherits their money

• 7:14Speaker 03

  because it may be the wrong person. Not having a will doesn't automatically mean you've made a terrible financial mistake. First, we need to look at what you own and how those assets are titled. Let's return to our hypothetical listener in the beginning. 43 years old, no kids, single. Her first asset is her 401k or IRA, so a retirement account. And her, the current arrangement is her parents are named as the beneficiary. Then we have a brokerage account, $150,000. It is not listed as a TOD. It is not a transfer on death.

• 8:00Speaker 03

  Her savings account with $40,000 has no POD, payable on death. Her retirement accounts generally pass to her named beneficiaries under her plan and the account rules. So if all of your assets are in retirement and you have beneficiaries named, and it's the beneficiaries you want, you're good. Beneficiaries, Trump will designation. So whatever is listed as your beneficiary, that is what's going to happen. Your will could say something completely different when it comes to your retirement accounts. And it doesn't matter. It's what's listed as the beneficiary under your accounts.

• 8:41Speaker 03

  But the $190,000 she has between the brokerage and savings accounts maybe, may become part of her probate estate. And then the distribution is determined by state law. If she adds, and this is a simple fix. If she adds a valid TOD designation to her brokerage account and a POD designation payable on death to her savings account, those assets may transfer directly to her chosen beneficiaries. So that easy peasy, like easy situation. You don't have to beat yourself up for not having a will. Cause in this case, your beneficiary designations did all the heavy lifting.

• 9:25Speaker 03

  So now let's change up this example a little bit. Let's say she wants to leave half the money to her sister, a quarter of it to her niece, and a quarter of it to charity. Her old beneficiary designations, naming her parents, won't change that. So the first thing to review isn't whether you have a will, it's the instructions already attached to your assets.

• 9:50Speaker 03

  In my experience, single, never married women without children often still have their parents named as their beneficiaries. Because when you were 23 years old and you had your first job and you're sitting with HR and they're like, "Set up your 401K and name a beneficiary," and you're like, "Mom and dad." So that's what everyone did, right? And that may be exactly what you want. That may be correct, but those decisions made 10, 15, 20 years ago, before you've accumulated substantial wealth or began thinking about what your legacy could look like, it may not align now. So, questions worth answering.

• 10:35Speaker 03

  Are your parents still the people you want to inherit your money? Have your relationships or priorities changed? Are the primary and contingent beneficiaries current? So, real quick, primary beneficiary, that is who inherits your money if you were to pass away. Why name a contingent beneficiary? A contingent beneficiary only comes into effect if the primary predeceases you. So if you were to pass away and then they go to look at your primary beneficiaries and they're like, "Oh, my goodness, the primary beneficiary is also deceased," then you go to the contingent beneficiary. That sometimes trips people up. They'll think the contingent is like the second person to receive money.

• 11:20Speaker 03

  That's not accurate. The contingent only comes into play if the primary predeceases the account owner. Do the percentages across your accounts reflect your wishes? And have you reviewed each account individually? You may be all set up on your 401K, but your brokerage account may not be appropriately established. So you want to go and review each and every one of your accounts. A beneficiary designation generally governs the account to which it applies, even when a will says something different. So as I mentioned before, the beneficiary designations trump the will. So the point isn't that naming your parents is wrong.

• 12:03Speaker 03

  That could be exactly who you want to receive your money. It's making sure that decision is still intentional. And I think that that's the point with a lot of money topics or issues or questions, is that we just don't want to go into default mode. We want to make sure that you're choosing this and it's not just the what's leftover decision or the decision you made 20 years ago. Same thing with your spending strategy. When I go through that with my clients, or your investment strategy, you may end up having the same exact thing you had in the past, but now at least we know it's a decision and not default.

• 12:47Speaker 03

  This is exactly the kind of thing I look at when I'm working with my clients at GWA Wealth. We're not just looking at how much money you have invested or whether your portfolio is performing well. We're looking at how all the pieces of your financial life fit together, including what happens to your money when you're no longer here. Because you can do a great job building wealth and still overlook some pretty important decisions about what happens to it. So when would you actually need a will? A person with retirement beneficiaries, TOD brokerage accounts, POD bank accounts, and very little other property, may already have much of her financial asset transfer planning

• 13:32Speaker 03

  addressed. But there are circumstances where a will becomes considerably more important. And I will say, I am not an estate planning attorney. I'm a financial planner. These are conversations I have with my clients, but if you have more questions about estate planning and wills, talk to an estate planning attorney. Okay. So some circumstances where a will becomes more important. A house owned individually may create a different situation. So can a substantial personal property or complicated family relationships that if

• 14:14Speaker 03

  you have some issues with family members or they have issues with you, a will may be a good idea, especially if you have other assets besides a retirement account, a TOD brokerage account. If you have minor children, you may want to explore getting a will. A will can provide instructions for probate assets, nominate a personal representative to administer the estate, and nominate a guardian for minor children where applicable. A will doesn't automatically avoid probate, though. It generally directs how probate assets are distributed and identifies whom you'd like

• 14:56Speaker 03

  to administer the estate, of course, subject to applicable law. So the answer isn't always, "You need a will immediately and you are an irresponsible adult for not having one." The answer is, "Let's see what you own, what arrangements are already in place, and what gaps remain." Also, inheritance planning is different from incapacity planning. So beneficiary designations don't authorize someone to manage your money while you're alive but unable to act. And that's a big one. Who is going to handle your affairs? Even if your money can pass directly to beneficiaries, someone still needs to know where everything

• 15:41Speaker 03

  is. So who will notify financial institutions, locate documents, coordinate with family, deal with property bills, or any necessary estate administration? So I encourage clients to identify someone they trust and have an actual conversation with that person. But there are, there's three different roles to understand. A beneficiary receives the asset. A personal representative or administrator has legal authority to administer an estate, generally through the applicable legal process. And a financial power of attorney may act under the document during your lifetime,

• 16:26Speaker 03

  but that authority ends at death. So if you die without a will and probate is necessary, someone may need to seek appointment from the appropriate court. Having a conversation with a trusted friend or relative is helpful to prepare for this, but it doesn't itself grant legal authority. So make sure someone you trust knows where your important records are, which institutions hold your accounts, and to whom to contact. That doesn't mean giving them your passwords or account access. They just kind of, they just need to know where everything is. And that's really the hardest job, is where is everything, especially in this digital

• 17:11Speaker 03

  world? We don't have statements just in a file folder, right? They're in our email. There's a great website called LastPass where you can grant someone the ability to log into your accounts through the LastPass, but they don't get your passwords. Let's look at three situations where the outcome changes. So, situation number one, the single woman with well-organized accounts. She has current beneficiaries, TOD and POD arrangements, and minimal other property. Much of her money may transfer directly without a will determining its recipients.

• 17:54Speaker 03

  So she may not need a will in this scenario because her accounts are set up appropriately and she doesn't own a house or own other property. Situation two, the single homeowner. She has beneficiaries on her investments but owns a house solely in her name. Her home's title and applicable state law may determine whether it needs to pass through probate. Her investment beneficiaries don't solve that problem. Situation three, the woman who wants to leave her money to someone outside of her family. She wants to leave her money to a close friend or charity, but she hasn't made beneficiary arrangements or a will covering that properly.

• 18:39Speaker 03

  State intestee laws generally favor legally recognized relatives rather than simply the people she feels closest to. So your wishes don't automatically control where your money goes. The legal arrangements attached to your assets matter. So let's go back to our listener at the beginning of the show. 43 years old, single, doesn't have children, has the retirement account, the brokerage account, and a savings account. So again, we need to clean up the retirement account to make sure her beneficiaries are accurate. We need to add a TOD to her brokerage account and a POD to her savings account. Does she need a will after that?

• 19:23Speaker 03

  So I wouldn't automatically say yes or no based on the information provided, but I would say her accounts are pretty well set up to ensure her money goes where she wants it to go. But again, if you own a home, then we want to make sure we have the appropriate protections in place. Do you have significant other property? Is there someone you trust to handle your assets or go through the probate process? Do you have a plan for when you're incapacitated, which is different than from who inherits your money after death?

• 20:06Speaker 03

  So I would think about a durable financial power of attorney and appropriate healthcare directives that can address needs that a will doesn't. Here's the real question. Have you actually made decisions about where your assets should go? Or are you relying on paperwork you completed years ago? That's what I want the call to action for all of you to be today. Go and review your beneficiary designations. Does it match up what you want as 40-something you? Or does it match what it was when you set up the account as 20-something you? Go back and review it. It'll take you a few minutes and it'll be well worth it.

• 20:50Speaker 03

  This is something I can help you think through at GWA Wealth. I work with women who have done a great job building their financial lives but want to make sure they're making smart decisions with the money they've accumulated. You can learn more about working together at GWAWealth.com or at the link in the show notes. And if you have a friend who needs to hear this conversation, send her this episode. Sometimes the most important financial decisions are the ones we haven't thought to make yet.

• 21:19Speaker 03

  GWA Wealth provides financial planning, not legal advice or estate document drafting. Estate attorneys should be involved when appropriate.

• 21:30Speaker 03

  Shari Rash is an investment advisor representative with GWA Wealth. Advisory services are offered through GWA Wealth, a registered investment advisor registered with the state of South Carolina. Opinions expressed herein are solely those of Shari Rash and do not reflect opinions of GWA Wealth. This podcast is produced by Money Sheik, which receives compensation from third-party advertisers who ads may play during this program. GWA Wealth and Shari Rash do not endorse, recommend, or approve any of the products or services advertised during this podcast. The content provided here is not intended to provide any tax or legal advice or provide the basis for any financial decisions.

• 22:15Speaker 03

  Thank you so much for joining me, and I can't wait to talk to you next time. If you have any questions for me or any topics you'd like me to discuss, DM me on Instagram at @cheesetalkingmoney or send me an email, shari@cheesetalkingmoneypodcast.

• 22:34Speaker 01

  They're running a Cover 2 defense, but you're running to get game day deals on Uber Eats. Keep everyone at tonight's watch party fed with deals from your go-to restaurants or stock up with deals on your favorite snacks and groceries. Whatever the occasion, get game day deals on Uber Eats all season long. It's not football without food. Uber Eats. Order now. Terms apply. Product availability varies by region. See app for details.

• 23:05Speaker 02

  This episode is brought to you by State Farm. Football has a play for just about everything. You can go deep, keep it on the ground, or draw up something nobody sees coming. And whether you want to run a flea flicker or the tush push, you need a plan to fit your unique situation. That's why State Farm takes the time to get to know you so they can help personalize coverage for your life and budget. Now that's a solid game plan. Like a good neighbor, State Farm is there.