My grandfather, 86, recently changed his will to specifically exclude my mother — his daughter — and leave everything to me.
If my mother has been listed as a beneficiary on any of his retirement accounts or life-insurance policies, does that go directly to my mother? Or me? Or both? Does a beneficiary supersede a will, or vice versa?
His current girlfriend, 80, has been listed as executrix, and in the event of her death, I will be executrix of his will. What could happen if this goes to court? How do I initiate having this uncomfortable conversation with my grandfather?
I want to address this before it’s too late.
Granddaughter in Texas
You can email The Moneyist with any financial and ethical questions related to coronavirus at firstname.lastname@example.org, and follow Quentin Fottrell on Twitter.
If your grandfather would like to completely disinherit your mother — and she is listed as a joint owner on a bank account or the beneficiary on an IRA or life-insurance policy — he would need to take direct action. He could not remove your mother as a joint owner of an account without her consent, but he can change the beneficiary on retirement and life-insurance accounts relatively easily.
“They pass by beneficiary designation and are not controlled by a will,” according to Rania Combs Law. “The only time a will would control a non-probate asset is if no beneficiary is designated or the estate is named as the beneficiary. That’s why it’s so important to coordinate non-probate assets with the way your will disposes of your property.”
Of course, there are cases of a person forgetting to update their beneficiaries. As this Supreme Court case shows, citing state law, the children of the deceased were awarded the proceeds from a life-insurance policy even though the ex-wife was still listed as a beneficiary. Other times, couples agree to maintain beneficiary arrangements as part of their divorce agreement.
It’s up to your grandfather to make these changes. As a beneficiary of his estate, it seems imprudent to initiate a conversation with him about his other policies in order to ensure he removes your mother as beneficiary — and, presumably, includes your good self — unless you have some compelling reason such as elder abuse as a motivating factor.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.
The Moneyist regrets he cannot reply to questions individually.
More from Quentin Fottrell: