Except in certain limited circumstances, the IRA should ordinarily be distributed based upon the contractual account agreement. If you and your sister were listed as 1/3 beneficiaries each - and that designation was done after your Dad's remarriage it should be honored. (CA law could invalidate the designation if made pre-marriage) It sounds like a strong set of letters to the bank are needed. If the bank erroneously gave the funds to your step-mother, it is liable. We've seen this sort of thing happen before - If the facts you shared are correct and complete, some polite, but formal conversation and perhaps a little arm twisting and lawsuit threatening should be able to get the job done.
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Ah, banks. Always remember the golden rule: the one with the gold makes the rules.
I agree that a properly executed beneficiary designation must be honored. There are exceptions here and there, and unfortunately this law can get pretty complicated very quickly. Banks will sometimes make mistakes, especially when their legal department is from another state. They are supposed to be good at complying with the law, but nobody's perfect.
However, from a practical perspective, you may need a formal exchange of letters with the bank AND with your dad's new wife. There could be a lot of complications to your fact pattern, such as whether or not your father contributed to the IRA after his second wedding, or if he executed certain estate planning documents such as a marital property agreement. Depending on who did what, you may want to go after the bank, or his second wife, or both (or neither). Unfortunately, the law is very complicated and adding just one or two facts could totally change the outcome of your case. I know lawyers are expensive, but their expertise can be critical; if this stuff were easy, I wouldn't have a job.
Best of luck. There are many good attorneys who do free initial consultations with clients. You can get a referral through the San Diego County Bar, the North County Bar, or Avvo.
Best of luck.
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I agree with the answer. If your mother passed prior to your father, then there would be no viable beneficiary unless a contingent beneficiary was listed. If you were listed as the contingent beneficiary and the primary is deceased, it goes to you and your sister and the bank is in error. If there were no contingent beneficiaries listed then the assets pass according to your father's will or estate plan. If there is no estate plan, then the assets pass according to the California laws of intestate succession. If it was community property, then it goes to the current wife. If it was separate property (and it sounds like it in this case) then 1/3 goes to the wife with the remaining split between the living issue if there is more than one child (which sounds like your case). It seems from your facts that you have a case against the bank. You should discuss further with a California estate planning attorney. If you were my client, it appears that the bank made an error and we would proceed against the bank and the current spouse.