5 On Your Side

Updating your pension could save your family

Posted January 31, 2013

Bad things can quickly get worse if you've overlooked some of the most basic financial precautions -- and surprisingly, a lot of people are in this position.

A simple jog changed Karen Mendelsohn’s life forever. Her husband went for a run and never came back.

“He suffered a sudden heart attack. It was horrible,” Karen said. “And they couldn’t revive him.”

She and Harold were married for 10 years and had two young children.

Her husband never updated his pension and never named her or their children as the beneficiaries. It was still in the name of his parents.

When Karen asked his parents about it, “They said ‘No.’”

“They said, ‘If our son left us as the beneficiaries, he wanted us to have the money.’” Karen said.

Consumer Reports says financial oversights like Harold Mendelsohn's are way too common.

"Our survey found that in the last five years, 86 percent of respondents had not checked or updated important estate documents, including wills and beneficiary designations,” Tobie Stanger of Consumer Reports said.

Financial planner Gayle Lob says another frequent mistake couples make is having only one person in charge of the finances.

"What if somebody gets disabled?” Lob said. “What if one of them dies?”

In a survey, Consumer Reports found that, with 70 percent of couples, only one spouse knew key details about their accounts.

"And, if you are over 60 and have adult children, it's time to let them know where that important information is as well,” Stanger said.

It is also important to think about whether or not you have enough insurance coverage. Half of homeowners didn't -- at least not enough to replace items at today's prices.

More than 70 percent didn't have enough money put aside to survive three months if they lost a job or got sick, Consumer Reports said.

"You may not solve everything all at once, but just taking those first simple steps may save you and your family a lot of heartache down the road,” said Stanger.

As for Karen Mendelsohn, she had to sue her in-laws to get her husband's death benefits.
She hopes sharing her story will encourage others to take care of anything that needs updating.

Along with regularly updating estate planning documents, Consumer Reports recommends designating a file cabinet or safety deposit box for your will, insurance policies and a list of all important accounts and investments.


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  • dollibug Feb 1, 2013

    Anytime health insurance is updated....with any sort of changes....they the person should also update anything else which is important. It is hard for me to think that a man would get married, add his wife and children to his health coverage and not make other important updates.

  • k8ered Feb 1, 2013

    Dollibug, it depends. He could have started that pension before he got married. If that were the case, he wouldn't have been compelled to change beneficiaries.

  • dollibug Feb 1, 2013

    I thought there were *provisions* in place when a couple has been married....that a spouse MUST sign if they are not named as beneficiary. Perhaps this is only for 401's? It is a shame when something like this happens and the spouse must sue to get it. I have heard things like this when there are multiple marriages and one would think that a spouse would update things like this.