Dear Liz: I have spent the majority of the last three decades abroad. Relationships fade away if there is little contact. Such is life. Most of the financial accounts that I have allow me to provide an organization as a beneficiary. But some institutions, like TreasuryDirect, require an actual person to be listed as a beneficiary. I have approached some acquaintances to ask if they would like to be my beneficiary, but as soon as I say I need their Social Security numbers, they think that I am trying to scam them. My bizarre question is: Whom can I leave my money to?
Answer: If you don’t name a beneficiary for your U.S. savings bonds, they become part of your estate when you die.
The proceeds can be distributed according to your will or living trust. This may require the court process known as probate, but whether that’s a big deal depends on where you live and the size of your probate estate. Many states have simplified probate that can make (relatively) short work of small estates.
If your savings bond holdings aren’t substantial and your other accounts have beneficiaries — which typically means they avoid probate — then this could be a reasonable approach.
Another option is to create a living trust and have the bonds reissued to the trust, said Burton Mitchell, an estate planning attorney in Los Angeles. Living trusts involve some costs to set up, but they avoid probate and they’re flexible.
“The reader can then modify the living trust whenever desired without re-titling the financial accounts,” Mitchell said.