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Getting Financial Affairs in Order – Trusted Contacts and Beneficiaries
by Sally Pessin, Esq., CRPC®, FIDUCIARY
I met with a client in her 70s who had recently gone from working full-time to part-time. She finally had some time to get her financial affairs in order. We decided to consolidate several of her retirement accounts from former employers into one brokerage firm where my client already held an old Traditional IRA. Unfamiliar with the brokerage website, we called customer service to walk us through the steps to transfer the outside accounts.
After the call, a message flashed across the computer screen asking the client to name a “trusted contact.” Listing a trusted contact on financial accounts is prudent as is protects clients from becoming victims of scams. As people age, they are more likely to fall prey to one of the ever-growing fraudulent scams. If an attempt is made to withdraw an unusually large amount of money, the trusted contact is first notified.
After my client had selected her two adult children as her trusted contacts, I asked her if she had named beneficiaries upon her death. She was certain that she had already done this, but I pressed her to double check. When we located the beneficiary designation listed on her account, my client let out a shriek; her ex-husband was listed as the only beneficiary on the account that she had set up a long time ago. This meant that her ex-husband would receive all the assets in my client’s account if she predeceased him, leaving her children with nothing. We immediately deleted the ex-husband from the account and replaced his name for that of my client’s children designating them as beneficiaries. Moral of the story is: always double check the beneficiaries on your accounts!
