When I saw the thread title, I thought, "Ah, I can contribute to this thread." Please see below for the details (copied from a thread I started at the Mr. Money Mustache forum in 2014). At the time I was more circumspect about naming the company, but it's Vanguard.
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Feel free to read on for the details, but here's the upshot: Make sure the beneficiaries of your accounts know that they are the beneficiaries. Even better, provide them with documentation, including how their names are spelled on the account (i.e. full name or middle initial)and the account numbers, and contact information for the company holding the account.
Our experience happened to be with a low-fee provider, but it would not surprise me to learn that the same was true at all of the big money-management firms. I'll call the company LowFee.
My husband's mother and father died within a year of each other. His mom's estate took a long time to clear, in part because of one retirement account that she held at LowFee. The account was through the company she worked for, and she had it for about six years before she retired. The amount: $45K.
The estate attorney had no luck getting anyone at LowFee to discuss the account, so she asked my husband - the executor of the estate - to call.
So my husband called... and was told by the LowFee CSR that she could only speak directly to the beneficiary. He, the executor of the estate, had no authority whatsoever with regard to the LowFee retirement account. She would not tell him who the beneficiaries were, or even if there were two, a primary and a contingent.
The legal representative of the deceased is not recognized by LowFee with regard to the distribution of assets. Think about that.
He asked what LowFee did in terms of outreach to beneficiaries and was told they do nothing. NOTHING. If the beneficiary doesn't know he or she is listed as the beneficiary by the account holder, and therefore does not contact the company with very specific information in hand, including the account number and full legal name of the account holder, the company will not inform them.
He asked if the beneficiaries were listed anywhere, and she told him they were listed on the paper statement. Although now that he had notified LowFee of the account holder's death, they would no longer send paper statements.
My husband had just gone through a two-foot stack of paperwork - executing an estate is practically a full-time job - and he'd kept what he felt were critical papers and then recycled the rest.
So off he went to the recycle bin, where he plowed through the mess until he found Pg. 5 of 7 of the latest LowFee statement, which listed the beneficiaries. We were one piece of recycled paper from that $45K never reaching its intended beneficiary.
It turned out that the primary beneficiary was my husband's father, who had died a year before his mother. The contingent beneficiary was our niece - her granddaughter - who was eighteen months old at the time his mom named her the beneficiary. She's now 22.
We were lucky. We found the ONE piece of paper that gave our niece access to the money her grandmother wanted her to have. If we hadn't? Well, I don't know what LowFee would have done with it, but it certainly would not have followed the deceased's stated intentions.
How much money are these companies sitting on that will never be distributed? I thought my husband would pop a vein by the end of that phone call.
His mom had done what she thought was best: she listed her husband as the primary beneficiary, and then her granddaughter. Her own health was poor, and she did not think to change the beneficiary after her husband died. She didn't think to tell her granddaughter that there was an account with $45K that she would inherit... I'm sure she expected it would all happen as a matter of course during the settlement of the estate. But it didn't. And it wouldn't have. EVER.
So take it upon yourselves, investors and parents and grandparents, to educate and inform your beneficiaries. Don't expect any due diligence from the companies making money off your money.