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January 26, 2012 at 06:30 AM
Thank you Ed Slott for your tireless work in educating us on IRAs, their benefits and their near misses. But for the agents and reps who don’t want to spend three days and several thousand dollars in a workshop, here is the key to making you an invaluable IRA resource for your clients and prospects. Share the stories of unaware families who thought their parent’s or spouse’s IRA would automatically pass tax free to their IRA, because they don’t.
My most recent experience with a new client is just another nightmare whereby the wife figured her deceased husband and their estate attorney had all the details worked out in their IRAs. And I suppose their plan was copacetic back in 1999 when it was drafted. But news flash! The custodian (aka banks and brokerages) have gone through tumultuous times and there have been untold numbers of mergers and sales of banks, insurers and firms over the past few years, often unintentionally negating prior estate planning.
In this case, the firm that was once the custodian of my new client’s IRA was acquired. And even though their IRAs held by the acquired firm named the spouses as each other’s beneficiaries, the firm’s custodian was the owner “for the benefit of” (FBO) the clients.
