My parents owned a joint TOD account. Their children were the designated secondary beneficiaries when they both had the mental capacity to make such decisions. After our parents moved to a nursing home a couple of years later, the doctor determined that neither parent was mentally capable of making financial decisions. That information was given to the financial advisor in writing. When Mom died before Dad, the firm closed the joint account and set up a single account for Dad. It was the same money but a new account number and type of account. They did not list beneficiaries for the new single account since they said Dad could no longer make those decisions. Mom and Dad determined the beneficiaries when they were still capable of making decisions, and the financial advisor was reminded of that by my father during subsequent meetings. How is it possible for them to set up a single account without listing the children as beneficiaries, knowing that was our parents’ intent?
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First, I’m so sorry for the loss of your mother and for the added stress of navigating this during such a difficult time. You deserve clear answers.
There are several red flags here worth examining:
Who authorized the new account? If your father signed off on it after the doctor had already documented his incapacity in writing, that’s a significant problem, and the firm should have known better.
Was a power of attorney in place? Once a physician formally determines that someone can no longer make financial decisions, someone with legal authority needs to step in to act on their behalf. Find out who was authorized to transact on your father’s account, and whether that person was involved in opening the new one.
Did a new account even need to be opened? That depends on whose Social Security number was tied to the joint account. If your mother was the primary account holder, opening a new account for your father would be a standard administrative step. However, if your father was the primary, the firm may have had the option to simply remove your mother…meaning a brand-new account (and the loss of the beneficiary designations) may not have been necessary at all.
Either way, the firm was on notice, and in writing, of both your parents’ incapacity and their beneficiary intentions. I’d recommend requesting a meeting with the advisor’s supervisor or the firm’s compliance department and asking them to document exactly why the beneficiary designations were not carried forward to the new account, and determining who signed the new account application.