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vanguard beneficiary policy stinks
Old 08-14-2017, 09:09 AM   #1
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vanguard beneficiary policy stinks

i happen to notice the vanguard joint account my wife and i have says no beneficiaries listed .

i know we did have them so i called .

i was told joint accounts can not have beneficiaries listed until they are down to a single owner.

that is ridiculous, all our fidelity joint accounts have beneficiaries . what happens in the event of a common disaster like plan crash or car crash . that logic is nuts .

we know a couple killed a few months ago in a horrible car crash .

we don't need our estate paying for probate costs here in ny . if that is the case i will give fidelity 100% instead of just 85% of our money
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Old 08-14-2017, 09:31 AM   #2
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Ha! Ha! You could blame your state laws and probate costs. After all, isn't a will the more flexible, traditional way to get this done?
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Old 08-14-2017, 09:33 AM   #3
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it is not a state law at all . all our accounts have them .

NOOOOOOOOO , a will cannot gain access to the accounts without going through probate . that is the problem .

only accounts with beneficiaries , in trusts or jointly held escape having to be probated .
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"Not everything you own will automatically go through probate. The obvious assets that will need to be probated are those with a title that is in your name only. These might include bank accounts, investments, home, other real estate, vehicles, etc. If yours is the only name on the title and you are deceased, only the probate court can take your name off the title and put someone else’s name on.
*
Assets that generally do not go through probate are 1) jointly owned assets that transfer to the surviving owner; 2) assets that have a valid beneficiary designation; and 3) assets that are in a trust"

1. Jointly Owned Assets. Jointly owned assets that transfer to the surviving owner do not go through probate. (This kind of joint ownership is “joint ownership (or joint tenants) with right of survivorship.”) But if the surviving owner dies without adding another owner, or if both owners die at the same time, the asset must be probated before it can go to the heirs."



https://www.estateplanning.com/Do-Al...rough-Probate/
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Old 08-14-2017, 10:14 AM   #4
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interesting , the wording in the tod packages are different between the two

.

vanguard's tod package says do not use for joint accounts .

"Use this form to establish, change, or terminate a Vanguard Transfer on Death Plan. The plan is available only for nonretirement accounts registered to an individual, including Vanguard Brokerage Accounts. Donít use this form for IRAs, other retirement accounts, or community property accounts, or to enroll a joint, Uniform Gifts/Transfers to Minors Act (UGMA/UTMA), or trust account. Print in capital letters and use black ink.
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
fidelity's reads differently .

For joint ownership with right of survivorship or tenants by entirety accounts, the joint registration transfers account ownership upon the first death, usually directly to the surviving accountholder. TOD becomes effective for joint accounts if both owners pass away simultaneously.
Joint and TOD registration generally allow an account to pass outside the probate estate, enabling the surviving owner or beneficiaries to avoid the time and expense of that process for this account."


i just wrote our account executive at fidelity to confirm the beneficiaries will get the assets in case of a common disaster on the joint account
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Old 08-14-2017, 10:15 AM   #5
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got a reply from fidelity

------------------------------------------------------------

"Thank you for contacting Fidelity! I am happy to assist.

We definitely do recognize the beneficiaries that you have listed on all your accounts including the joint accounts.

Let us know if we can help with anything else. We really appreciate your business! Have a great day.

Sincerely,
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Old 08-14-2017, 10:49 AM   #6
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There is a reason why what would have been a joint account is a revocable trust account at Vanguard.
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Old 08-14-2017, 10:54 AM   #7
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with fidelity it is not in any way a trust account . it is specifically a tod account . it passes to the beneficiaries in the event of a simultaneous death.

trusts come with their own set of issues and expenses ..we do not want a trust account . which is why i will consider not using vanguard . i really have no reason to use them other than i just wanted a back up source with some money besides fidelity .

i much prefer fidelity any way so it is really a moot point .
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Old 08-14-2017, 11:07 AM   #8
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This made me think about something: If we both die at the same time, our adult kids would not have enough money to pay the upcoming monthly bills. We don't keep more than about 2 weeks worth of cash around and all the rest is invested. I have to sell something this week to pay an upcoming credit card bill.

I guess I can set up our Fidelity joint taxable account for a TOD. Could such a transfer take place in less than 2 weeks?
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Old 08-14-2017, 11:07 AM   #9
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I like Fidelity too but we moved to Vanguard to take advantage of Wellesley, Wellington and their low cost index funds. May move back because Fidelity has two offices in the metro area. Their representatives were a Godsend when dealing with my Mother's investments.
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Old 08-14-2017, 11:17 AM   #10
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Originally Posted by LOL! View Post
This made me think about something: If we both die at the same time, our adult kids would not have enough money to pay the upcoming monthly bills. We don't keep more than about 2 weeks worth of cash around and all the rest is invested. I have to sell something this week to pay an upcoming credit card bill.

I guess I can set up our Fidelity joint taxable account for a TOD. Could such a transfer take place in less than 2 weeks?
not sure
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Old 08-14-2017, 11:24 AM   #11
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Originally Posted by LOL! View Post
This made me think about something: If we both die at the same time, our adult kids would not have enough money to pay the upcoming monthly bills. We don't keep more than about 2 weeks worth of cash around and all the rest is invested. I have to sell something this week to pay an upcoming credit card bill.

I guess I can set up our Fidelity joint taxable account for a TOD. Could such a transfer take place in less than 2 weeks?
Maybe! Of course there can be other issues. When DF passed his estate was TOD'ed to my sister's and me. I had an existing brokerage account. As soon as the money was transferred the State of Pennsylvania locked my account until the estate taxes had been settled. Only 6 months or so.
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Old 08-14-2017, 11:42 AM   #12
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Originally Posted by mathjak107 View Post
with fidelity it is not in any way a trust account . it is specifically a tod account . it passes to the beneficiaries in the event of a simultaneous death.

trusts come with their own set of issues and expenses ..we do not want a trust account . which is why i will consider not using vanguard . i really have no reason to use them other than i just wanted a back up source with some money besides fidelity .

i much prefer fidelity any way so it is really a moot point .
I have found that in recent years, Vanguard has lost its touch and others have improved. I switched everything to Schwab from Vanguard a few months ago (still have Fido as my main provider). So far, I can recommend it (also: both Fido and Schwab have brick and mortar offices where I live, and Vanguard does not).
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Old 08-14-2017, 12:07 PM   #13
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Originally Posted by LOL! View Post
This made me think about something: If we both die at the same time, our adult kids would not have enough money to pay the upcoming monthly bills. We don't keep more than about 2 weeks worth of cash around and all the rest is invested. I have to sell something this week to pay an upcoming credit card bill.

I guess I can set up our Fidelity joint taxable account for a TOD. Could such a transfer take place in less than 2 weeks?
That's where a trust comes in handy. Extra time and effort and cost up front, but with my trust now listed as the owner of my after-tax brokerage account, the trustee will have access much more promptly.

Also, to the thread subject, I'm pretty sure I used the beneficiaries option on the Vanguard web site to set that info for our jointly owned after-tax accounts before DH died. Check that and see? Maybe it's just the paperwork version they are hickey about.
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Old 08-14-2017, 12:12 PM   #14
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mathjak, you raise a good point that I had never thought of but am also interested in.

I just wrote a secure message to my Vanguard rep asking if they have a mechanism similar to what Fidelity offers to designate beneficiaries on joint accounts to avoid probate that perhaps isn't shown on their website. I'll let you know his response. If they don't have something similar then perhaps I'll move at least the joint account or split the joint account between our two individual accounts to avoid probate.

Also, I just called Discover Bank and added our two kids as 50/50 beneficiaries to our joint savings account.
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Old 08-14-2017, 12:35 PM   #15
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Originally Posted by LOL! View Post
This made me think about something: If we both die at the same time, our adult kids would not have enough money to pay the upcoming monthly bills. We don't keep more than about 2 weeks worth of cash around and all the rest is invested. I have to sell something this week to pay an upcoming credit card bill.

I guess I can set up our Fidelity joint taxable account for a TOD. Could such a transfer take place in less than 2 weeks?
You'll have to ask your institution what they require in order to trigger the transfer. I suspect they will require a death certificate, which can take time.
The mother of a local acquaintance recently died... the funeral home will not issue the death certificate until they are paid $1200, but the family needs access to the accounts to get the $1200.
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Old 08-14-2017, 12:38 PM   #16
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I'm not sure if the funeral home can legally do that.... your acquaintance may want to call the body that regulates funeral homes in your state and ask if the funeral home can do that.
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Old 08-14-2017, 12:46 PM   #17
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The mother of a local acquaintance recently died... the funeral home will not issue the death certificate until they are paid $1200, but the family needs access to the accounts to get the $1200.
I was under the impression that death certificates are issued by the state (usually the state medical examiner's office), not a funeral home. Am I wrong?
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Old 08-14-2017, 12:51 PM   #18
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Originally Posted by mathjak107 View Post
i happen to notice the vanguard joint account my wife and i have says no beneficiaries listed .

i know we did have them so i called .

i was told joint accounts can not have beneficiaries listed until they are down to a single owner.

that is ridiculous, all our fidelity joint accounts have beneficiaries . what happens in the event of a common disaster like plan crash or car crash . that logic is nuts .

we know a couple killed a few months ago in a horrible car crash .

we don't need our estate paying for probate costs here in ny . if that is the case i will give fidelity 100% instead of just 85% of our money
Just off the phone with Vanguard. Gal and I, different last names, unmarried, own everything as "joint tenants with right of survivorship". Quick non-event no probate title change if one of us dies. If we both get dead at the same time beneficiaries outside of probate would be good.

Vanguard is sending us forms to remove one owner, so accounts become individually owned. We can then have ownership transfer without probate to a primary beneficiary (Gal or I), or if we both snuff it at once to a secondary beneficiary or beneficiaries. Downsides may include danger of one of us running off with all the stocks, thumbing our nose at the former joint owner. Possible tax ramifications? Thinking none at transfer, as it is an undefined joint interest. Individual will have to claim all gains at annual tax time. Other issues? Errors in thinking?
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Old 08-14-2017, 01:09 PM   #19
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I was under the impression that death certificates are issued by the state (usually the state medical examiner's office), not a funeral home. Am I wrong?
IME the funeral home initially provides them... if you need some later then you get them from the state or the funeral home can get them for you from the state.

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The simplest way to get certified copies of a death certificate is to order them through the funeral home or mortuary at the time of the death. If you are in charge of winding up the deceased personís affairs, you should ask for at least ten copies. You will need one each time you claim property or benefits that belonged to the deceased person, including life insurance proceeds, Social Security benefits, payable on death accounts, veterans benefits, and many others.

If the time of death has passed and you need to order death certificates yourself, contact the county or state vital records office. For deaths that occurred within the past few months, you should start with the county office, because it is more likely to have the certificate on file. After a few months have passed, the state office will probably have it, too.
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Old 08-14-2017, 01:50 PM   #20
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This made me think about something: If we both die at the same time, our adult kids would not have enough money to pay the upcoming monthly bills. We don't keep more than about 2 weeks worth of cash around and all the rest is invested. I have to sell something this week to pay an upcoming credit card bill.
If you're both gone I wouldn't worry about it. What are they gonna do- trash your credit? It would take awhile, for example, for the bank to get annoyed enough to foreclose on your house or for the utilities to get turned off. Before that point, whoever is handling your estate would contact creditors and tell them their debtors are deceased. They've seen it before.

Not every estate has to be probated. I know this is very different from the OP's case, but DH died with $228 in his checking account and not much else, and no debts. We'd even re-titled the cars in my name after his terminal diagnosis. He had a will which left everything to me. Bank of America must have tapped into the SS Death database (funeral directors are required to report deaths) because they contacted me before I even had a chance to contact them. It took about a month and the local branch people couldn't do much except tell me which forms to fill out and send them to some central place, but somewhere I was able to indicate that DS' estate was a small one so did not go through probate.

Finally, YMMV but I didn't need as many death certificates as I got. SS may have kept one but everyone else was happy looking at it, maybe copying it and then handing it back to me.
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