Hello –

Have a 35 year old new client; father passed away late last year w/ a # of IRAs and Non-IRAs. She was named 50% primary beneficiary on all the IRAs as well as TOD on the Non-IRAs. All accounts are w/ brokerage firms – not ones that cater to RIAs (so the likes of UBS, Merrill Lynch, Morgan Stanley, etc.). This is a State of NJ estate.

The client’s brother is the executor, who has been rushing to do things w/ the accounts.

1. Apparently, he had my client sign paperwork w/ at least one of the new brokerage firms in order to set up accounts w/ them – both Inherited IRA as well as Non-IRA. Yet, because she did not complete/submit a W-9 Form within 30 days, they are claiming she will be subject to mandatory 24% withholding (TEFRA) tax on her interest – which has yet to be received.
Are you familiar w/ this?

2. Also, I have been told that, in spite of their being designated beneficiaries on completed Beneficiary Designation Forms, as well as TODs, the brokerage firms require a NJ L-8 Form to be completed. This Form is typically used for bank and brokerage accounts w/o beneficiaries named. Have you ever heard of IRAs and TODs not being able to pass directly to the beneficiaries upon providing a Death Certificate?

Thanks.

Jason