Be ever vigilant about mundane paperwork! Lost docs

[John G]

What you don't know can hurt you

Subtitle: I can't believe this happened to me!

Recently received letter from Bear Stearns concerning my Roth IRA opened in 1998: "Our records indicate that you opened the above IRA with Bear Stearns as custodian. We have not been able to locate a complete application with your signature on our records......"

Are you kidding me? After all, I got this on April 1. They have just discovered there is not application on file.... after seven years? I have a copy here of the key pages but who knows if that would be considered an official document.

I can't believe their record keeping is that shabby. If I had died in the past seven years, they would not know the beneficiaries for my Roth.

Unbelievable!

Just another reason not to trust your custodians to get it right. Check, double check - contributions, purchase/sells, beneficiaries, etc. I know many custodians include the beneficiary designation on either all monthly statements or once a year. Not Bear Stearns.

Remember that old TV ad, "do you know where your children are?". Who knew that it might apply to your Roth paperwork.

[Appleby]

Good post John

This is such an important area of any financial and estate planning planning, i.e. making sure your beneficiary designations are on file and that they meet the custodian’s requirements. Too often issues arise where no one can determine the designated beneficiary for a decedent’s retirement account. IMO, retirement account owners should ask for written confirmation of their beneficiary designations ( from the financial institutions) at least once per year, but definitely when the following occurs :

Death of beneficiary

New addition to family. For instance, if the retirement account owner had a new child, remarried etc. If the retirement account owner now has stepchildren, update if they should be included/excluded in/from “all my children” beneficiary designation

Divorce

With all the mergers, acquisitions and conversions, each time one of these occur. The new financial institution may not have obtained copies of beneficiary designations, and even if they did, new plan documents or IRA agreements may either have different default provisions or may not find a ‘customized’ designation acceptable

[John G]

I would like to see more custodians get the the point that when they send out the form at year end telling you how you can pay you annual fee by check, that they also give you a printout of who are the beneficiaries and give you a chance to change them.