Large IRA’s: Vanguard Powers of Attorney–Advisable Or Not?
A married couple ages 80 and 78 have named each other as primary beneficiary of their $2.5 million in their 6 IRA’s at Vanguard and their 3 sons as equal secondary beneficiaries. The sons live in 3 cities in 2 states. Upon their parents’ second death, one son will assume the work of of filing instructions with Vanguard for creating inherited IRA’s and inheriting the parents’ nonretirement assets, he will deal with an estate attorney, etc.
While the documents he’ll prepare could be FedEx’d to his 2 brothers for their signatures and signature guarantees, it would be simpler and quicker if he had their Vanguard Power of Attorney (P/A) so he could act for them. The Vanguard P/A, which cannot be modified and which Vanguard wants rather than a more general P/A, would also enable him to move his brothers’ Vanguard assets into his own account. (While Vanguard also has a Limited P/A, it would prevent his acting for his brothers.) This one son is trustworthy so there does not appear to be any real risk of his acting in other than a fiduciary way.
I would appreciate any comments about the advisability/inadvisability of the one son being given a Vanguard P/A by his 2 brothers and I welcome any other suggestions.
Thank you.
Permalink Submitted by Alan Spross on Thu, 2008-02-14 18:49
While large sums of money have often resulted in substantial character changes in people, this probably still comes down to how comfortable all 3 of them are with the situation. They each know the other’s temperaments and understanding of financial transactions better than those advising them, so if they are ALL comfortable with the VG full POA form, it should be OK. This includes the attorney in fact just as much as the other two, and goes beyond the question of integrity. For example, even though everything is done properly, how likely will it be that one of the brothers does not fully understand all the issues and that becomes a wedge issue?