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DEAR BRUCE: I recently discovered that insurance funds were being held in an unclaimed property account in California in my husband’s name. He is 83 years old. I wrote to the company asking why we had never been contacted regarding this insurance policy, since my husband is a native Californian and we’ve been living in California. Their answer did not address the question. In essence, they said that the policy was issued in November 1922 and became paid up in 1932. They issued a new policy in place of the original policy. The policy has reached its maturity date, and the proceeds were payable to my husband, but the company could not locate him. People there turned it over to the state. Can you shed some light on this? Why did they change the policy number? And why have they not tried to contact us? — L.W., via e-mail

DEAR L.W.: From the point of view of the insurance company, while it has an obligation to try and seek out beneficiaries, there really is no advantage to it. That’s why after making whatever effort the law requires it simply turned the money over to the escheat division of state government (all states have an escheat division), where unclaimed funds are there in perpetuity for someone with a legitimate claim on them. Even though 70 years have passed, you didn’t indicate how you came to know this, but I suspect that a company that does this kind of research contacted you, and, for a commission, it is going to put you in touch with the funds, which you will get the lion’s share of. If your lifestyle permits and there is enough money, use it for vacation or some extravagance that you ordinarily might or could not afford.

DEAR BRUCE: My sister and I would like to know how you would bequeath an estate worth between $300,000 and $500,000? The heirs would be one daughter, in her late 50s, who is a saver/investor, and a granddaughter in her 30s, who is a shopper/spender. — R.N., via e-mail

DEAR R.N.: There are likely no taxes on the estate. As to the heirs, is it your intent, and is it necessary, to divide the money equally between the two? It seems to me that the older person who is the saver/investor might very well have better use of the money than the shopper, your granddaughter. If you are very concerned about the loose spending habits of the granddaughter and you wish to leave her half of the estate, you could set up what is called a spend-thrift trust, where the granddaughter will never see the principal of the trust, but it will pay her an amount — large or small, whichever you determine — that will consist of only interest or dividends, or a combination of interest, dividends and principal. In the latter arrangement, it’s very possible and indeed likely that eventually the trust will be exhausted, but at least it will stop the woman involved from throwing the money away, which would very likely be contrary to what you would like to happen.

You can also include in this trust that if she in any way takes legal action to bust the trust, the trust would cease instantly, and all money will be given to the daughter. Whether that would hold up or not is another matter, but it would certainly give her pause in thinking about busting the trust.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: bruce@brucewilliams.com. Questions of general interest will be answered in future columns.