Traditional IRA Beneficiary Statement on a Morgan Stanley Account

Submitted by Allan Whittemore on Fri, 2024-01-05 17:26

For this IRA, I have listed my four (4) children as primary beneficiaries. I have specified “per stirpies” for the first three (3) of my children. The fourth child, Todd, is without issue. If Todd predeceases me, or if he elects to disclaim this inheritance, I want his share to go to his five (5) nieces/nephews (my grandchildren).

The above seems like it should be a simply matter. However, I have learned that: although Morgan Stanley has a whole page of spaces for contingent beneficiaries, naming Todd’s five (5) nieces/nephews as contingents does not accomplish my desires, because contingents do not get any inheritance unless all primary beneficiaries are deceased. And, there is no way to list Todd’s nieces/nephews on Morgan Stanley’s form as his alternate beneficiaries. They insist that I write a Custom Beneficiary Statement. This means that my monthly statements and my account on Morgan Stanley’s website will not even show my primary beneficiaries. They will both only state that a Custom Beneficiary Statement is on file. Note: I beleive that Fidelity is the same as Morgan Stanley in this regard.

Does your experience agree with my findings? Are you aware of any custodian who has a form that will accommodate my desires? Has someone at your company ever requested that a custodian modify their form to accept such a prevalent situation? I hope that Ed Slott and Company has the possibility of influencing Morgan Stanley to modify their Beneficiary Form to accommodate this situation. If successful, I imagine that most other custodians would follow suit. This may be yet another opportunity for Ed Slott to help me and many other IRA owners?

Allan Whittemore
248-660-4868



Submitted by Alan - IRA critic on Sat, 2024-01-06 18:13

  • Sorry, but this forum is operated by volunteers unaffiliated with the Slott company, and is not monitored by Slott. We have no contact or influence with MS or other custodians. That said, each custodian has their own rules regarding beneficiary options, and in some cases clients have been lost through inflexibility regarding beneficiary formats. That said, MS will apparently accept a customized beneficiary designation from you with the tradeoff being loss of convenience in checking that your designation remains intact at all times. You would periodically have to contact MS to verify this, since beneficiary designations have been known to being mishandled or lost with custodian system changes or mergers.
  • Most likely you will be left with a choice of the customized designation with it’s drawbacks or verifying and accepting the typical default that a deceased beneficiary’s share is split ratably with the other primary beneficiaries. MIght not the other children be in a position to take care of their own children?   Could you have additional grandchildren born?
  • Of course, you could contact Slott directly. Someone there may know of a custodian that offers what you are seeking, but they probably would not intercede directly on your behalf with any of them. Good luck in getting this resolved.

Submitted by Allan Whittemore on Sat, 2024-01-06 20:15

Thanks for taking the time to answer my question.  I thought that I was presenting my concern to Ed Slott & Company.  Can you suggest an email or phone number that will allow me to contact Slott & Company? 

Submitted by Alan - IRA critic on Sun, 2024-01-07 00:01

The 800 # is shown on the top of these pages. 

Submitted by David Mertz on Sat, 2024-01-06 21:43

You might consider splitting the IRA into two, one with Todd as primary beneficiary and your grandchildren as contingent beneficiaries and another with your other children as beneficiaries per stirpes.  If invested the same there would be no need for rebalancing.  The slight downside is that in the unlikely event that Todd and the grandchildren all predecease you your estate would inherit the IRA, but in that case your will could specify how that IRA is to be divided.  You could also specify a trust as beneficiary of your IRA and the trust document could specify how the IRA is to be divided.  Of course there is a bit of added complication if either your estate or a trust is involved.

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