Another Vanguard Rant

[mathjak107]

I wonder if more institutions will follow Vanguard in this regard, there has to be a reason they are doing this...

so far none i know …that is chase , fidelity and capital 1

yeah m there is a reason ….they are promoting their trust services

 

[24601NoMore]

so far none i know …that is chase , fidelity and capital 1

yeah m there is a reason ….they are promoting their trust services

When I pressed them on the reason why, they claimed it's because there are a lot of legal potholes for them when joint owners die "at the same time". They claim that's rare..one person may die a minute or two after the other, etc. And the state laws about this vary so significantly across states it can be legal quagmire.

Other brokerages don't seem to care. But VG seems so cautious about wading into potential issues that they simply refuse to allow beneficiaries on joint accounts.

 

[MRG]

When I pressed them on the reason why, they claimed it's because there are a lot of legal potholes for them when joint owners die "at the same time". They claim that's rare..one person may die a minute or two after the other, etc. And the state laws about this vary so significantly across states it can be legal quagmire.

Other brokerages don't seem to care. But VG seems so cautious about wading into potential issues that they simply refuse to allow beneficiaries on joint accounts.

Yup. I appreciate a provider that knows what they can not effectively do. My career was in financial services and I saw first hand what death claims are like. Any efforts to help the process and the people is a great benefit.

 

[kgtest]

Yepp,
It passes to the surviving owner. So the Will would need to take care of the situation where both account owners are deceased at the same time.

 

[Healthy Lifestyle]

What a terrible vanguard decision and will carefully review our joint account.

 

[ivinsfan]

What a terrible vanguard decision and will carefully review our joint account.

What's terrible about it ? I remember an old friend who really regretted divorcing his wife. As he aged he opened a joint account with the ex,without even telling her. He dies, his brother finds the account and tries to get the money from EverBank...claims brother forgot to remove ex wife from account..uh no because it was opened after the divorce. Brother finally tells ex about the money and offers to split it with her. Ex calls EverBank and even though she is listed on the account EverBank says get a lawyer because someone already disputes ownership.. So yes crap happens

 

[Texas Proud]

When I pressed them on the reason why, they claimed it's because there are a lot of legal potholes for them when joint owners die "at the same time". They claim that's rare..one person may die a minute or two after the other, etc. And the state laws about this vary so significantly across states it can be legal quagmire.

Other brokerages don't seem to care. But VG seems so cautious about wading into potential issues that they simply refuse to allow beneficiaries on joint accounts.

My answer to this is if it is so rare why worry?



Not a lawyer but I would think that they could have some document that would say when dying at the same time exists...


BUT, who cares in the end... when the 2nd dies it goes to the POD... no need to change it up...

 

[mathjak107]

i care .. first of all it was awful to just drop them with no notifications .

and today common deaths can happen so easily with all that is going on in the world .

it’s stupid on their behalf and if they were hoping to funnel business to their trust services it’s even worse .

last thing our kids need is to have to deal with unscrambling accounts with no beneficiaries when there is no reason to.

odds of us dying in our 20’s and 30’s is rare too , should we just cancel life insurance policies since 99% of term policies never pay out for one reason or another ?

 

[MSDalt]

Disclaimer: I have not checked this out recently so some information may be stale.
eTrade has been offering Vanguard & Fidelity Funds without a transaction fee.
Unlike Vanguard, eTrade's mutual fund screeners allow screening of all funds offered, not just Vanguard funds.
Wife & I are in the process of transferring a joint account from Vanguard to eTrade and plan to receive $600 for moving $200k (their BONUS24 offer expires at the end of Feb).
I am not familiar with eTrade's TOD provisions but am otherwise impressed.

 

[Koolau]

Yepp,
It passes to the surviving owner. So the Will would need to take care of the situation where both account owners are deceased at the same time.

View attachment 48548

I can understand why Vanguard wouldn't want to get in the middle of disputed claims when state laws can become in effect.

We're maybe w*rking toward a trust, but in the mean time - short of dying in the same aircraft or car, it's unlikely this would be a problem with our 2 joint accounts at Vanguard.

My guess: Other big investment houses let you THINK it's all okay and then your HEIRS end up actually dealing with the state issues and the big house just waits for them to figure it all out. Vanguard may be more honest about it, letting you know they don't want to be involved in the hassles of state laws when you die together. Just my thinking on the subject, but I've been wrong before so YMMV.

 

[mathjak107]

there is nothing for the state to get involved in with beneficiaries..it is cut and dry and the easiest, simplest way to get assets to heirs.
it is what it is and it involves no other factors.

trusts on the other hand are complex , have to be administered and are subject to defective wording or missing verbiage. both of which we have experienced first hand.

a trust missing verbiage about predeceasing cost us 500k to buy out some estranged step children from a family construction business they were specifically mentioned by name to get no part of

 

[Piper20]

Our lawyer setup our Will if we both die at the same time I am the first goner.

 

[Sunset]

there is nothing for the state to get involved in with beneficiaries..it is cut and dry and the easiest, simplest way to get assets to heirs.
it is what it is and it involves no other factors.

trusts on the other hand are complex , have to be administered and are subject to defective wording or missing verbiage. both of which we have experienced first hand.

a trust missing verbiage about predeceasing cost us 500k to buy out some estranged step children from a family construction business they were specifically mentioned by name to get no part of

Normal situations a POD/TOD is (IMHO) very easy and simple.

However, in this joint account issue, I can see some complications and there are probably lots I don't see.
Couple has joint account and die in plane/car crash.
Husband's Will says give all to charity.
Wife's Will says give all to nephew
TOD/POD beneficiary statement says give to Couples Child.

Where there is survivorship in the Joint account agreement.

Did Husband die after Wife by 2/5/30 minutes : Joint account is therefore Husbands and all the $$ goes to Charity.

Did Wife die after Husband by 2/5/30 minutes : Joint account is therefore Wife's and all $$ goes to Nephew.

Both died at the same instant: Joint account POD's to the Couples Child.

Imagine the legal quagmire fighting over who died when

 

[mathjak107]

regardless it still goes to beneficiaries on the account , as beneficiaries are primary as to who gets what. not wills or trusts .

irrelevant if they died together or apart , dead is dead if any of the surviving spouses can’t take the money out and beneficiaries rule.

they tell you on beneficiary forms the beneficiaries over ride any wills or trusts and pass outside of them to whomever is listed

 

[sengsational]

Imagine the legal quagmire fighting over who died when

Imagine getting hit by lightning every year, for 5 years straight. That's probably the odds of both of a couple dying at the same time in a plane crash. But I suppose if someone wants to plan for every eventuality, no matter how remote, then a plan is needed. If we go down together, we'll just let them fight it out.

 

[mathjak107]

Imagine getting hit by lightning every year, for 5 years straight. That's probably the odds of both of a couple dying at the same time in a plane crash. But I suppose if someone wants to plan for every eventuality, no matter how remote, then a plan is needed. If we go down together, we'll just let them fight it out.

happened to a couple we knew a few years ago which is why we were concerned.

they went out to celebrate their 40th anniversary and a drunk killed them both in an accident..

it happens far more then lightning does and more then we think

And it happens frequently enough that most states have laws to address the issue and the problems that can arise from simultaneous deaths.


by the way it just happened again here 4 days ago

https://westchester.news12.com/coup...ash-after-police-pursuit-identified-by-family

and it happened 2 months ago
https://nypost.com/2023/12/06/metro...-killed-in-thanksgiving-crash-3-kids-injured/

and a few years ago
https://hudsonvalleypost.com/new-yo...ile-crash-with-cement-mixer-in-hudson-valley/

 

[sengsational]

it happens far more then lightning does and more then we think

Not that I do THAT much research before posting, but I did ask ChatGPT, and it said the chances of a couple in the US dying at the same time was much less than getting struck by lightning. I pressed it for a number, but it only had a statistic for lightning (1 in a half million, I think it said).


Again, we all can plan for any eventualities we think are likely. I, personally, have written-off the dying at the same time eventuality as so statistically unlikely as to not worry about it.

 

[Texas Proud]

Normal situations a POD/TOD is (IMHO) very easy and simple.

However, in this joint account issue, I can see some complications and there are probably lots I don't see.
Couple has joint account and die in plane/car crash.
Husband's Will says give all to charity.
Wife's Will says give all to nephew
TOD/POD beneficiary statement says give to Couples Child.

Where there is survivorship in the Joint account agreement.

Did Husband die after Wife by 2/5/30 minutes : Joint account is therefore Husbands and all the $$ goes to Charity.

Did Wife die after Husband by 2/5/30 minutes : Joint account is therefore Wife's and all $$ goes to Nephew.

Both died at the same instant: Joint account POD's to the Couples Child.

Imagine the legal quagmire fighting over who died when

I think that does not even go there... the beneficiaries are there for both parties and if one dies it does not change the POD... it is only when the 2nd dies that it happens...


After the first death, the surviving spouse can go and change the POD if they want as they are now the sole owner... but wills should never come into the mix with a POD designation....

 

[mathjak107]

I think that does not even go there... the beneficiaries are there for both parties and if one dies it does not change the POD... it is only when the 2nd dies that it happens...


After the first death, the surviving spouse can go and change the POD if they want as they are now the sole owner... but wills should never come into the mix with a POD designation....

exactly ..who dies first is irrelevant as long as the account stands .

it’s a simple transfer to beneficiaries no matter what the order was .

it is the easiest method of passing to heirs and vanguard killed that.

 

[ivinsfan]

exactly ..who dies first is irrelevant as long as the account stands .

it’s a simple transfer to beneficiaries no matter what the order was .

it is the easiest method of passing to heirs and vanguard killed that.

In this age of multiple spouses and children from several marriages, I could absolutely see this coming I doubt VG will be the one and only.

 

[mathjak107]

In this age of multiple spouses and children from several marriages, I could absolutely see this coming I doubt VG will be the one and only.

still irrelevant…beneficiaries are what they are …

it’s up to the couple to do things differently if needed …

it’s simple , it isn’t effected by family dynamics under any circumstance.

once the beneficiaries are sent checks they are free to sue each other but those listed are written in stone

 

[Texas Proud]

In this age of multiple spouses and children from several marriages, I could absolutely see this coming I doubt VG will be the one and only.

still irrelevant…beneficiaries are what they are …

it’s up to the couple to do things differently if needed …

it’s simple , it isn’t effected by family dynamics under any circumstance.

once the beneficiaries are sent checks they are free to sue each other but those listed are written in stone

Agree... who cares if there is an old spouse etc... there have been many times a life insurance policy named the old spouse and guess who got the money?


It is up to the person to keep their beneficiaries correct... and BTW, I remember them having secondary beneficiaries as an option in case the first level had died...

 

[Koolau]

So, we're agreed? Probably a bad idea to take out the insurance currently advertised on TV. You know, the one who insures against BOTH of you dying of the SAME lightening strike?

 

[ivinsfan]

still irrelevant…beneficiaries are what they are …

it’s up to the couple to do things differently if needed …

it’s simple , it isn’t effected by family dynamics under any circumstance.

once the beneficiaries are sent checks they are free to sue each other but those listed are written in stone

Well I'm sure Vanguard has gotten caught in the middle more then once. You seem unduly upset about this .

 

[ivinsfan]

Agree... who cares if there is an old spouse etc... there have been many times a life insurance policy named the old spouse and guess who got the money?


It is up to the person to keep their beneficiaries correct... and BTW, I remember them having secondary beneficiaries as an option in case the first level had died...

If only people were that diligent.... the old spouse got the money I'm guessing. This stuff isn't Vanguards problem