Every year, hundreds of millions of dollars go unclaimed by their rightful owners. In fact, by most estimates, Governmental agencies across the United States currently hold over $30 Billion in unclaimed funds! Most of these unclaimed funds are the result of:

• Unclaimed Inheritances
• Lost Bank Accounts
• Uncollected Life Insurance Proceeds
• Unclaimed Stocks & Bonds
• Unclaimed Social Security Benefits
• Unclaimed Class Action Settlements
• Unclaimed Insured Bank Deposits
• Undeliverable IRS Tax Refunds
• Unclaimed Savings Bonds

It really isn’t that hard to imagine what causes these funds to go unclaimed. Americans move around a lot and sometimes forwarding addresses are incorrect or not available. You might even have had a distant relative who died intestate [without a will]. If the State cannot identify valid heirs to distribute these assets to, the State holds onto the money.

In fact, very few beneficiaries of Life Insurance know that it is up to them to not only locate all valid policies, but also to notify the issuer of the death of the policy holder before they can be paid!

The good news is that every state has a website where you can search for these funds. You will want to search every possible permutation of your name, including your maiden name, middle name and even nick-names. Here is a list of sites where you can search for your lost riches! Happy hunting!

After having dealt with the loss of a close friend or loved one, and the travails of the probate process, it might be tempting to head to the local mall or car dealership to go on a spending spree with your inheritance money. Before you do, it might be wise for you to look at your current financial situation before you do something regrettable!

First of all, you need to determine exactly how much you stand to inherit. In some estates (especially larger estates) you might receive several distributions before your receive your “final” distribution. Some assets might actually pass to you outside of the probate process, such as Individual Retirement Accounts [IRA’s]. There may be serious tax ramifications depending on how you decided to withdraw the money from these accounts. However these assets are finally distributed to you, you need to arrive at a firm number so that you can create a plan that will satisfy both your short-term and long-term goals.

Once you have a plan that addresses both short and long-term goals, write the short-term goals next to the long-term goals. While it may seem like a great idea to upgrade your home, buy a new car or send your kids to a great private school, you owe it to yourself to weigh these goals against your longer-term needs. Given today’s economy, your retirement needs and the higher education needs of your children may very difficult to meet. This inheritance might be your only opportunity to achieve them!

Next, you need to establish an “emergency” fund. If you do not already have one, you need to set aside an amount equal to six months of your regular expenses. Your emergency fund should be put in a short-term, fixed income investment vehicle such as a money-market account.

Only after you have your “plan” in place should you set aside a fixed amount for the splurge that you so richly deserve. This fixed amount should be placed in a money market fund, certificate of deposit or interest bearing checking/savings account. It is very important that you exercise some restraint here. Once that fund is gone, you simply cannot allow yourself to dip into your “plan” money!

Now it is time to invest your “plan” money. If you are savvy, you might be able to come up with your own plan or you may want to consult with a professional. However you chose to proceed, the key to your success is diversification. Your plan should include stocks, bonds, and a rich array of Exchange Traded Funds [ETF’s] that spread your risk among many sectors. While you want to see your fund grow, it is more important to protect the principal against the volatility of any one sector.

A year from now you will wish you had started today.

These common, unfortunate estate planning mistakes can be easily avoided by retaining a qualified attorney:

1. NOT HAVING A WILL

o People procrastinate. They figure that they don’t need a will because they have few valuable assets. They can’t decide who should receive what, or who should be “in charge.” They are afraid their family will fight. They don’t want to spend money on an attorney. Whatever the reason, when the probate court receives no guidance from the deceased, it must turn to state law to determine the disposition of the estate. At this point, the family has lost any control over the outcome. Instead of avoiding a family fight, the deceased has put his or her family in conflict at a most vulnerable time.

2. No health care directive and/or no power of attorney

o A proper estate plan must consider these important legal documents. Without a health care directive, medical treatment may proceed without consideration of your wishes regarding the extent of treatment. Do you want to be kept alive with expensive medical technologies? Who in the immediate family is to make such decisions? Conflict often results among family members. A health care directive expresses your wishes regarding medical care and can appoint one or more persons to make vital decisions on your behalf when you are incapacitated. Likewise, a power of attorney appoints one or more persons to handle your financial and legal matters if you are incapacitated. Together, these documents complete the picture of how to assist you in your time of need with the least conflict, upheaval and surprise possible.

3. Handwritten wills/will changes

o A valid will must be signed and witnessed by at least two people. Any editing of a will after the fact is invalid and could invalidate the entire will. Consult an attorney if considering will changes, even minor ones, to ensure that any changes can be enforced.

4. Not coordinating beneficiaries

o A will cannot direct the disposition of all assets. Without using trusts, a will has no impact on life insurance, qualified retirement plans, pensions and any other asset where a named beneficiary will take the asset upon death. A review of these assets is an essential part of providing for integrated wealth transfer consistent with your wishes.

5. Not organizing and sharing information

o Drafting a will is only a first step to complete estate planning. It is very difficult for a personal representative to carry out your wishes if they cannot find the information concerning your assets. Make sure your personal representative knows where and how to access the records of your financial accounts, life insurance policies, etc. As important, annually organizing your files, including a review of the will and related documents ensures an accurate reflection of your wishes.

6. Keeping a will in a bank deposit box

o This seems like a good idea – keeping valuable documents in a safe place! However, safe deposit boxes typically only grant access to the depositor. If the depositor has died, getting to the will in the safe deposit box usually requires court appointment as the personal representative—an appointment that only comes when the court has the will, which is still in the safe deposit box, creating a “Catch-22.” The original will should instead be kept with the attorney, in a fireproof safe, or in a safe deposit box with joint access, or a combination of these methods. Note that this last choice has other risks, requiring confidence and trust in the other individual.

7. Leaving money to minors

o Leaving money to a minor usually results in the need for a guardian or conservator to hold this money for the benefit of the minor, and to report annually on the status of the assets. A better alternative is to consult an attorney to properly leave such a gift in a trust for the minor’s benefit (health, welfare and education) with distribution of remaining funds to the minor when he or she reaches a certain age. When done properly this protects the minor, the gift and provides for a straightforward transition of the gift.

8. “Deathbed” wills

o Changes to a will or execution of a new will near the time of death or during incapacity usually result in a contest of the validity of the will. This can become a very expensive battle for those left behind. A far better alternative is regularly reviewing your estate plan with your attorney to ensure your wishes are accurately reflected in a will which is validly drafted, witnessed, and executed.

9. Failure to tax plan

o Estate taxes can reach up to 50% of the value of the estate. Because tax laws regarding exemptions vary each year, it is critical to consult an attorney, tax advisor or accountant regarding your estate planning. This ensures that the proper legal structure is in place to maximize the legacy you leave to your loved ones.

If it sounds too good to be true . . . IT IS!

In the normal course of our business, we are routinely [at least 30 times a month] contacted by “heirs” who have received very official looking emails, usually from a Barrister or Solicitor from Africa. Most frequently, the emails are said to be from Nigeria, Ivory Coast or Lagos. These emails are all very similar in nature and are backed up by very official looking probate documentation. They all purport that the recipient had a blood relative who resided in their country and who left a very sizable estate [usually more than US$10,000,000.00] after dying in an accident. The “heir” is always the sole beneficiary of this estate.

Here is how the scam works. This Barrister or Solicitor will allege that there are many millions of US dollars currently being held in a bank account and that certain “fees” or “taxes” must be paid before the millions can be transferred to the US and deposited into the “heir’s” bank account. The fees are usually alleged to be inheritance taxes, transfer fees and/or fees related to certification that the money is not laundered drug money.

This Barrister of Solicitor, or one of his agents, will often send the “heir” an official looking receipt as evidence that they have actually paid some of these fees out of their own pockets. However, there is always a small “balance” that must be cleared up before the transfer can occur. This sum is usually $2,500.00 to $10,000.00 and must be sent via bank wire or Western Union.

Here are the facts:

• Heirs never have to pay taxes or fees out of their own pockets in order to receive their inheritance. Fees and taxes are ALWAYS paid out of the estate.
• The Barrister or Solicitor never really paid any “fees” or “taxes” on your behalf; this was merely a “hook” to make you feel indebted to them.
• If you send these people any money, they will simply come up with a new “fee” or “tax” that you must pay before you can access the millions. They will continue to do this until you have run out of money.
• We all wish that we had a “rich uncle” in Africa who left us millions. None of us really does.
• If the Probate Estate in not in an American Court, we cannot advance you money.

We truly hate informing people that they have been scammed, especially if they have already sent money abroad. If you have not yet sent any money, consider yourself lucky! Click here to read an article about a man who wasn’t so lucky . . .