Annuity Beneficiary incorrect
Hi Terry,
In-laws had set up a trust for their dependents, trust was in both parents name. They hired financial advisor who set up annuities to be disbursed to the trust upon their death. When mother in-law passed these annuities were rolled over and the beneficiary was change to just the father in-laws name as the trust. Now that he has passed had financial advisor contact insurance company to cash out. When no checks arrived, wife contacted insurance company directly and found out that the annuities could not be cashed out as there is no trust name that matches the beneficiaries on the annuities. Was told only option was to take to probate court for judge to decide. Is this the only option or is there any other path we could take? Thank you for any assistance or guidance you could provide.
Terry Says
Wow, that is a terrible story! And I hope it serves as a reminder to other people to carefully check the named beneficiaries on all insurance policies and IRAs.
Let me ask you a few questions –although I know the insurance company must be on top of this situation. What beneficiary does the insurance company say is the current “name” on the policy? Does that “name” have a Social Security number attached to it?
In fact, would you send me an email with details and answers to the above –(Terry@TerrySavage.com) and your phone number for contact. And the name of the insurer and contact info? And the name and contact info of the financial planner?
And a copy of the communication from the insurance company. Annuities owned by a trust MUST have named beneficiaries. The fact that the original joint name rolled into one (successor trustee?) name, indicates that this process worked. Did your father (and the financial planner) neglect to name individual beneficiaries — or a successor trustee — for the trust that owned the annuity? I need more clarity on what is the real issue here.
Don’t worry I won’t move forward until I talk to you. But it helps to have the facts.
And one fact sticks out: The financial planner was definitely negligent if he/she was responsible for setting up the trust and beneficiaries on this policy. Therefore, if the insurance company can’t be persuaded to deliver the proceeds, he or she (the planner) should pay the costs of probate, at the very least! And if there is any argument about this, I will show you how to complain to the registries, depending on the situation. As a last resort, a lawsuit for negligence would be a threat.
But I don’t want to make accusations without knowing all the facts. So please send me the requested info.
