Brokerage Account Titles: Doe Big Brokerage Firm [name omitted] have a beneficiary designation form to fill out? I was told no. Do I need a transfer on death or pay on death account? What do I do? Nothing is to go to my immediate family as far as any assets I have now. Also, I am legally separated and waiting for the divorce to be finalized.
Your question is a bit confusing, but let's see what we can do.
Brokerage Account Titles are vital to address, especially during and following a divorce which you indicated is in process. Every brokerage firm should have a beneficiary designation form to fill out for retirement plan accounts. Is it possible that the firm did not understand what you needed or that they may know of the divorce and were concerned about involvement? It doesn't make any sense that any firm, especially a major brokerage firm, doesn't have a beneficiary designation for a retirement account. If the account you are inquiring about is not a retirement plan account (e.g., IRA), but rather is just a regular brokerage account, then it would not be surprising that there is no beneficiary designation form. Your will would govern what will happen with that account. If (see below) you're in the midst of a divorce, you could amend your will (but discuss this with your matrimonial attorney) to limit what your ex-spouse-to-be will receive in case you die before the divorce is finalized. Be sure to discuss with your divorce attorney the issues of spousal right of election and what you might have to provide otherwise relating to the divorce.
"Transfer on death" or "Pay on Death" accounts are designed to transfer title automatically on death to a named person (presumably not your ex-spouse-to-be). While these account titles avoid probate they often do not provide the protection and planning options and flexibility more comprehensive beneficiary designations or wills (yes, going through probate!) can provide.
You indicated that you are legally separated and waiting for the divorce to be finalized. If you are in the process of a divorce or separation you must address these issues with your matrimonial attorney. If something happens before the divorce is finalized you'll need to know what will happen with your assets as well as your ex-spouse's assets. Even if the divorce agreement specifies who should be a beneficiary of which accounts, don't rely on the divorce agreement alone, get the beneficiary designations forms changed as quickly as possible. Similarly, if your ex-spouse is to name you a beneficiary of any insurance or other account get proof the change was made. Don't rely only on what the divorce agreement says.
You should review these matters with your matrimonial attorney and if he or she doesn't have tax expertise (or his or her firm) consult a tax adviser as well.
Subscribe to our email list to receive information on consumer webcasts and blogs, for practical legal information in simple English, delivered to your inbox. For more professional driven information, please visit Shenkman Law to subscribe.