IRA Beneficiary form retention
Do Broker/Dealers or IRA Custodians retain beneficiary designation forms or applications that contained designations beyond the FINRA/SEC 6 year requirements for books and records? Once recorded, the account systems will show designations but at some point is the copy of physical and legal proof gone as records or documents get purged, even say 10, 15, 20yrs down the road? Would there be no form to back up current designation showing up on system or statements moving forward for an IRA account at some point?
Permalink Submitted by Alan - IRA critic on Tue, 2022-09-13 00:03
Just guessing, but there are probably some “best practices” applied by most custodians, but I expect that there is also variances since a beneficiary documentation failure can result in expensive claims and legal costs. I have heard of various systems failures to capture beneficiary data when system changes are made, when firms are sold, or when they change recordkeepers. Which is why most broker dealer custodians advise IRA owners to verify that their beneficiary designations are current at least once a year, and more often when health is failing or custodians make major systems changes. Of course, even if the original account application is preserved and accessible, the result is not conclusive since that beneficiary may have been changed at any time or several times over the years following the account opening. Do you have a specific case in mind that exposed this issue?
Permalink Submitted by Bruce Steiner on Sat, 2022-09-17 16:41