vanguard beneficiary policy stinks

[mathjak107]

i never received notice that vanguard removed our beneficiaries when they stopped them on joint accounts . i had no idea until the new box came up the other day when you log in and it said no beneficiaries listed . i am like what ??

that is what kicked off this thread .

anyway the etf conversion was completed today so i can finally say good bye to vanguard .

 

[fritz]

i never received notice that vanguard removed our beneficiaries when they stopped them on joint accounts . i had no idea until the new box came up the other day when you log in and it said no beneficiaries listed . i am like what ??

that is what kicked off this thread .

anyway the etf conversion was completed today so i can finally say good bye to vanguard .[/ve QUOTE]

I mentioned this was also the scenario for us (2014) on my post #54. Not sure they notified anyone of this taxable account change (kind of one of those bad press decision things companies would rather downplay and bury in some related announcement). I did get them to reinstate beneficiaries on our joint taxable accounts with the TOD paperwork as mentioned on post #54 as well. I also mentioned that they remind us annually via email about verifying beneficiaries on post #100.

Not defending Vanguard's actions - just offering up our work around for the same scenario you experienced (for anyone here following this thread in the same Vanguard boat). If they should remove our ability to have TOD beneficiaries on our joint taxable accounts, we'll have to reconsider. We will be changing our taxable account selections to minimize taxable income over the next 4-5 years B/4 RMDs start - when wife is off ACA (early next year). Looking at Admiral vs. ETF, but would like to consolidate at Vanguard for simplicity. Wife has zero interest in managing investments and I'm also worried that as we age my/our cognitive ability will decline and we won't know it. Plans are in place, but simplicity is goal.

 

[mathjak107]

vanguard completed my fund to etf conversions yesterday . it takes 3 days .

so now i can transfer out at any time .

 

[Texas Proud]

Has anybody who was an executor tried to get info from Fidelity or someone else on an account with a named beneficiary



IOW, someone mentioned that Vanguard was much less than helpful on getting these accounts to the proper beneficiary.... they would not talk to the executor or even tell any account info to a beneficiary if they did not have full info.... to me this is much worse since it would affect everybody who has money at Vanguard... and it could make me move money to someone else...

Fidelity in the best option IMO, so I would like to know how helpful they are when someone passes....

 

[fritz]

Has anybody who was an executor tried to get info from Fidelity or someone else on an account with a named beneficiary



IOW, someone mentioned that Vanguard was much less than helpful on getting these accounts to the proper beneficiary.... they would not talk to the executor or even tell any account info to a beneficiary if they did not have full info.... to me this is much worse since it would affect everybody who has money at Vanguard... and it could make me move money to someone else...

Fidelity in the best option IMO, so I would like to know how helpful they are when someone passes....

I set up all of our financial accounts, including DW's Rollover IRA and Roth accounts at Vanguard. I have never set her stuff up with Vanguard for me to have access permission (I set it all up...). I do have household statements set up at Vanguard. Vanguard Flagship Rep has gotten very concerned in the past whenever I questioned anything about any of her accounts. It's annoying, but you have to remember - they're following protocol they've been trained in, and it's for the investor's protection.

The scenario is even worse with the ACA and the Hipaa privacy rules. I picked our ACA policies online originally and it is impossible to discuss anything related to DW's policy with Blue Cross Blue Shield w/o 1st having her get on the phone and give them permission to talk to me. They do have paperwork allowing this permission, but they seem to lose it annually and the issue starts over again. Just keep reminding myself - it's for her/our protection and have to appreciate the steps in place to enforce it.

 

[nwsteve]

For those using Vanguard (I stopped about 2 years ago after their last admin screw-up), you really need to recognize that Vanguard's low costs are driven in part by rote administration rules and hiring people (even in Flagship) that are comfortable with most of their thinking being done by the main V brain.
I also experienced V stripping beneficiaries from accounts. In my case, it was my 85 yo Mom. Fortunately, I found accidently a few months before she passed away from a stroke.

 

[JoeWras]

I set up all of our financial accounts, including DW's Rollover IRA and Roth accounts at Vanguard. I have never set her stuff up with Vanguard for me to have access permission (I set it all up...). I do have household statements set up at Vanguard. Vanguard Flagship Rep has gotten very concerned in the past whenever I questioned anything about any of her accounts. It's annoying, but you have to remember - they're following protocol they've been trained in, and it's for the investor's protection.

The scenario is even worse with the ACA and the Hipaa privacy rules. I picked our ACA policies online originally and it is impossible to discuss anything related to DW's policy with Blue Cross Blue Shield w/o 1st having her get on the phone and give them permission to talk to me. They do have paperwork allowing this permission, but they seem to lose it annually and the issue starts over again. Just keep reminding myself - it's for her/our protection and have to appreciate the steps in place to enforce it.

This is where having the trust was helpful, when I could help Dad legally without hassle when we opened an account with Vanguard for him. But I totally understand the desire to go TOD instead.

Your story reminded me of something. I was dealing with an insurance company, acting on my Dad's behalf. They asked for my Dad to verify who he was, and asked him his previous address. Instead, my Dad gave a CORRECT address from 1952! I laughed under my breath, but the insurance guy denied the conversation. We had to start over and call back ... After I coached Dad a bit.

 

[Texas Proud]

This is where having the trust was helpful, when I could help Dad legally without hassle when we opened an account with Vanguard for him. But I totally understand the desire to go TOD instead.

Your story reminded me of something. I was dealing with an insurance company, acting on my Dad's behalf. They asked for my Dad to verify who he was, and asked him his previous address. Instead, my Dad gave a CORRECT address from 1952! I laughed under my breath, but the insurance guy denied the conversation. We had to start over and call back ... After I coached Dad a bit.

LOL... with my mom I have some stuff written down and will point to what she needs to say... but I have not gotten the previous address question yet... then again, she lived there almost 50 years so she might remember.... not so much her current address....

 

[fritz]

This is where having the trust was helpful, when I could help Dad legally without hassle when we opened an account with Vanguard for him. But I totally understand the desire to go TOD instead.

Your story reminded me of something. I was dealing with an insurance company, acting on my Dad's behalf. They asked for my Dad to verify who he was, and asked him his previous address. Instead, my Dad gave a CORRECT address from 1952! I laughed under my breath, but the insurance guy denied the conversation. We had to start over and call back ... After I coached Dad a bit.

I spent more than a little time researching methods of protecting assets and insuring proper succession. My goal was to avoid probate (allowing public exposure of assets), and lawsuits while minimizing complexity. When both of us have left, look to have little to nothing in exposed assets (only car, personal belongings, etc). See a Will as an insufficient picture in time that requires regular updating/maintenance. My understanding is that revocable trusts are legally vulnerable, and only irrevocable trusts are safe from lawsuits. They have their own issues (irrevocable). LLCs (Family Savings LLC) appeared to be a suitable solution for asset protection, but again requires regular maintenance and has to be properly set up. Was looking at this and a personal residence trust. Just seemed to be difficult at best and mistakes could be costly. The more I looked at ways to protect and secure succession of assets - the more difficult/costly it became.

Long story short - gave up on that approach as it was costly, required regular updating/maintenance, and somewhat relied on competent third party (legal) assistance for all of it. All of our financial assets are set up with direct transfer to either a primary beneficiary, or to secondary beneficiaries (with the 2014 TOD of jointly held taxable accounts by VG working around their latest joint account policy). As mentioned in an earlier post, a TOD of property in our state is allowed and fairly straightforward which avoids probate. This doesn't provide legal protection from lawsuits on joint taxable accounts or property, but carry an umbrella policy to hopefully put enough insurance company lawyers in front of any attempt to seize them. It's less expensive for us than the alternative and complex route mentioned above. This approach is probably not suitable for everyone (and restricted to the 27 states that allow TOD deeds), but works well for our scenario. Guess you could say I can appreciate Mathjak107's efforts/approach - although I prefer to stay with Vanguard currently for costs/simplicity. Would most likely split joint accounts, if VG reneges on our joint taxable accounts TOD setup, but wouldn't be happy about it.

 

[mathjak107]

thanks

 

[mathjak107]

we went and confirmed the beneficiaries on our chase joint accounts today , no problem , all were listed and in effect .

spoke to them about having them babysit the etf we now have at vanguard and they will give us a private client account for just moving it there . no problem with adding beneficiaries to a joint account either .

since we will be in the market for a mortgage the discounts and perks that go with that account can make it worthwhile .


if fidelity does not offer cash promo's as of sept. again we likely will switch over to chase/jpm from vanguard and take advantage of the private client account status . .

we had opened up an account there a while ago because they gave us 600 bucks for opening the account .

if i can get chase to waive the first year fee on the sapphire reserve card too that would be a big score .

 

[aja8888]

Just a side note on Vanguard competency. I have an account now for 5 years. When I attempted to change my account e-mail address due to a new one I created (long story), I was unable to accomplish that changes via the online portal. So I called VG and asked them to do it for me. Hmmm, when they tried using the portal link, no dice. "We will get back to you....."

Well, no one "got back to me" for three weeks. On the third call, I mentioned leaving VG if I can't even change my e-mail address and that got someone's attention. Seems like the third call was magic. Whatever was wrong and created my inability to change my email address, was magically fixed.

Maybe Fidelity is better? IDK??

 

[mathjak107]

i just referred some friends to fidelity and my rep sent me 100.00 gift cards for each person .

there is no question the service and response time i get from fidelity is a much higher level .

 

[nwsteve]

i just referred some friends to fidelity and my rep sent me 100.00 gift cards for each person .

there is no question the service and response time i get from fidelity is a much higher level .

Mathjax, even if there is not a general cash rewards program at Fido next month, you may want to ask them about a competitive match. Your PC rep should have a access to such funds. Not sure how they would handle a mtg bene but costs nada to ask ;-)

 

[kimcdougc]

We have DH 401K account listing me as primary beneficiary at 100% and DS and DD as 2nd beneficiary at 50% each.

Outside we have a will, POA and a trust so nothing has to go through probate. DD is also on our bank accounts. She is our executor on all paperwork.

 

[aja8888]

We have DH 401K account listing me as primary beneficiary at 100% and DS and DD as 2nd beneficiary at 50% each.

Outside we have a will, POA and a trust so nothing has to go through probate. DD is also on our bank accounts. She is our executor on all paperwork.

In your state, do you have to probate the will?

 

[mathjak107]

Mathjax, even if there is not a general cash rewards program at Fido next month, you may want to ask them about a competitive match. Your PC rep should have a access to such funds. Not sure how they would handle a mtg bene but costs nada to ask ;-)

i asked , they said they can't do cash now . just hundreds of free trades .

 

[meierlde]

If all or most of the funds a person has have beneficiaries listed when they die can these funds be used for expenses (i.e. Funeral etc) before being distributed? As an example there is $100k in an investment account that has beneficiaries listed and a separate checking account with $275 and no beneficiary. Can part of the $100k be used for funeral expenses?

In the case cited, the beneficiaries will have to pay,
since some living person has to sign that they will be responsible for funeral expenses at the funeral home, just make sure that the beneficiary understands that that is part of the deal. So if the estate does not pay then the beneficiary pays. BTW if you happen to fall above the estate tax limit, the executor can claw back from beneficiaries if need be to pay the federal estate tax. So even in the case of all TOD you do need to total up the TOD bequests to see if it hits the limit.

 

[mathjak107]

In your state, do you have to probate the will?

not unless there is something probate . we have a will that technically would have to be probated if anything was to pass through it only there is nothing to probate . everything we own has beneficiaries.

which goes back to why i was annoyed at vanguard . we have no use for a trust .

 

[MrLoco]

Something that is missed here. Vanguard is NOT a public traded company. They do not have to answer to shareholders. Fidelity does. So Fidelity, in order to gain business from one of its biggest competitors...Vanguard....decided to get cute.

In fact, right on Fidelity's own website...they list a side by side comparison of 17 of their index funds compared to Vanguard...and tout how they "beat" Vanguard's expense ratios by 1....or 2 basis points. WOW!!!! What a savings! Schwab has done the same thing! They tout that they now have less expensive index funds than VAnguard....by 1 basis point! WOW!!!
Most people should be able (hopefully) to see the con here.

But what about the other 100+ mutual funds offered by Vanguard compared to all the other mutual funds offered by Fidelity or Schwab?
Even when comparing actively managed funds....Vanguard.....is less expensive than Fidelity....in some cases substantially so.
There may be cases where one wished to invest beyond an index fund.
Myself, I am invested in Vanguard's Wellington Fund. This is an actively managed fund with an expense ratio of only 16 basis points (Admiral Shares). Comparable actively managed funds from Fidelity have expense ratios of 3 times as much.

So, it is not a case of "Vanguard all bad.....Fidelity all good." There are issues with all investment firms. If you can invest on your own and do not need someone to hold your hand along the way and put up with an inconvenience along the way....Vanguard will serve you well.

God Bless Jack Bogle.

 

[mathjak107]

Something that is missed here. Vanguard is NOT a public traded company. They do not have to answer to shareholders. Fidelity does. .

that would be false .

fidelity is Privately owned. in fact it is #19 on forbes list of privately owned companies .

i never said vanguard is all bad . i personally like fidelity better for a number of reasons .

i find better customer service

local office

faster responses

vanguard has no ability on screen to cancel a fund order

vanguard does not allow beneficiaries on joint accounts .

all are important to me . .

 

[MrLoco]

that would be false .

fidelity is Privately owned. in fact it is #19 on forbes list of privately owned companies .

i never said vanguard is all bad . i personally like fidelity better for a number of reasons .

i find better customer service

local office

faster responses

vanguard has no ability on screen to cancel a fund order

vanguard does not allow beneficiaries on joint accounts .

all are important to me . .

But you and other Fidelity customers are paying for those "benefits" thru higher expenses on the bulk of their funds as well as their advertising...".Follow the green line!" And if you say you chose not to invest in Fidelity's active managed funds, then you need to look elsewhere.

Abigail Johnson ....with a net worth of over $14 billion....says Thank you!

God Bless Jack Bogle.

 

[Katiek]

Has anybody who was an executor tried to get info from Fidelity or someone else on an account with a named beneficiary



IOW, someone mentioned that Vanguard was much less than helpful on getting these accounts to the proper beneficiary.... they would not talk to the executor or even tell any account info to a beneficiary if they did not have full info.... to me this is much worse since it would affect everybody who has money at Vanguard... and it could make me move money to someone else...

Fidelity in the best option IMO, so I would like to know how helpful they are when someone passes....

I know everyone's experience is different, but when I inherited some accounts at Vanguard, they were very easy to deal with. They split the deceased's account and transferred it to me and the other beneficiaries very quickly.

 

[MRG]

But you and other Fidelity customers are paying for those "benefits" thru higher expenses on the bulk of their funds as well as their advertising...".Follow the green line!" And if you say you chose not to invest in Fidelity's active managed funds, then you need to look elsewhere.

Why?

If I'm happy with their service, their index funds slightly less expensive?

 

[mathjak107]

the model i have been using for 30 years of various fidelity funds has beaten what a total market fund would have done despite slightly higher expenses and all .
i have used the fidelity insight growth model which surpassed it . give me that performance for another 30 years and i will gladly pay the expenses.