Skip to main content

What do I do if the credit union does not honor my mother's change of beneficiary on her IRA accounts.

Silver Spring, MD |

My mother had IRA accounts with a local credit union. Initially, she designated her trust as the beneficiary. A month prior to her death, I accompanied her to the credit union where she requested to change the beneficiary to just me. The representative looked at her ID as well as my ID and made the change in the computer system.At her urging, he provided her a print-out of her accounts, showing that I was now the sole beneficiary on her accounts. She had him sign and initial the print-out, which I have.

When I went to roll-over the accounts into an inherited IRA, the credit union said that they will only make a distribution to the trust (the original beneficiary) despite the fact that I am listed as the beneficiary in their system and have the signed form showing the change. My options?

+ Read More

Attorney answers 3

Posted

You need to discuss this matter with an attorney. I think what has happened is that the Credit Union has some doubts about your mother's mental capacity to make the changes and that they are going to be sued, either by you or the trustee/ trust beneficiaries. From the Credit Union's point of view, it is better to be sued by you while they still hold the money or let you sue and the trust at the same time. They do not want to be in a situation where they pay out and the funds are gone and they have to dig into the Credit Union's assets to pay up.

Asker

Posted

Thanks for your reply. I have more information about their hesitance. Apparently, when my mother visited the credit union to make beneficiary change, the representative who handled the transaction made the change in the computer system but did not have my mother sign the proper form. Therefore, even though the change shows in their system, they do not have the supporting documentation. Based on my discussions with management, the representative who handled the transaction admits that he was new at the time and may have mishandled the transaction. The credit union is deliberating how they will handle the situation. Because my mother wanted proof that the change had been made, she had the representative provide a print-out of her accounts showing the change, which he signed and dated at my mother's request. Given that the confusion is the result of credit union error and given the documentation I have, does my lawyer have a good basis for disputing this if the credit union does not honor the change in beneficiary?

Posted

Mr. Carroll offers a good answer. Probably due to the proximity of the change to her death they became wary. I know lawyers say this alot - but get a lawyer to write a letter for an explanation as to why they will not honor the change. I just don't think, based on experience, that the bank will respond to you with out a lawyer. I suppose there is a difference between the ultimate beneficiaries if it goes to the trust versus the change?

This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. This attorney may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature. Visit Steve Zelinger's website: http://www.stevenzelinger.com/

Asker

Posted

Thanks for your reply. I can certainly have my estate attorney draft a letter. I am actually the sole beneficiary of the trust (which she amended near her death) as well. But I think it would be simpler for me to open an inherited IRA with me as the beneficiary rather than the trust.

Steven M Zelinger

Steven M Zelinger

Posted

Depending on the way the trust is drafted, there may also be tax benefits or detriments. Speak to your lawyer.

Posted

I agree that you should consult with an estate attorney as soon as possible to discuss the issue with the credit union. I regularly practice in this area of law in MD and would be happy to speak with you. I can be reached (301) 850-3387.

Please note that the use of the Internet, including this Avvo forum (this "forum"), for communication does not establish an attorney-client relationship, unless and until a written engagement has been made and signed by both you and the attorney who is answering your question. Any answers by Julie Goodwin Weber or Goodwin Weber LLC on this forum are not intended as legal advice, and may not be relied upon or used as legal advice.

Wills and estates topics

Recommended articles about Wills and estates

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer