Broker/Dealer Will Not Accept a Custom Bene Form.
If my client wants 21 nephews and nieces as primary beneficiaries and we create a custom beneficiary form, why shouldn’t the BD honor that request?
If my client wants 21 nephews and nieces as primary beneficiaries and we create a custom beneficiary form, why shouldn’t the BD honor that request?
Permalink Submitted by Bruce Steiner on Wed, 2015-02-25 22:18
They should. If they won’t, your client should move the IRA to a different financial institution.Outright to 21 nieces and nephews isn’t all that complicated, regardless of whether the share for a deceased niece or nephew goes to his/her issue or to the surviving nieces or nephews.
Permalink Submitted by Jose Morales on Thu, 2015-02-26 00:02
What is the issue that they claim? Is it the number of benes? Is there something different about the language on the custom form from their in house form that they do not like? Why can’t their beneficiary form be used if they don’t want to accept one drafted by the IRA owner? This seems very straighforward to me as presented and wouldn’t require a custom form to begin with.
Permalink Submitted by Ben Meyer on Fri, 2015-02-27 16:09
Many institutions want the beneficiary designations to be contained within their computer system, not as an additional document. Therefore the beneficiaries need to be coded into the fields of their database. Assuming that there are no special conditions attached to the designations there should be no problem. Many institutions have an initial screen showing a fixed number of beneficiaries, but they have a clickable option to add an additional beneficiary. They may even have a box to check for “per stirpes”. For these institutions, beneficiaries can continue to be added until the desired number has been entered. Perhaps the representative you spoke to isn’t fully trained as to how to use the IT system. It may also be that really do have a limit. Possibly they don’t want the eventual burden of dealing with a high number of beneficiary accounts at some future date. In this case it sounds like a good idea to look more a more accomodating B/D. Your client is fortunate to have 21 nieces and nephews.