This is a heads up for anyone deciding on how to designate beneficiaries of an IRA based on advice from an IRA custodian call-center employee.
When you call your IRA custodian, checking your account balance or requesting paperwork for a transaction is straightforward, but designating beneficiaries, paying an IRA to a trust, or leaving someone other than your spouse your IRA is an entirely different matter.
Even if the service from your IRA custodian receives high ratings from consumers, calling in with a question about the disposition of an IRA upon your death may be placing faith in the advice of a recent college graduate new to financial and tax planning. Relying on advice from a custodian call center employee about your IRA beneficiary designations is a gamble unless you’re an expert on IRAs. Please also keep in mind:
- Even if you have a will, your beneficiary designations probably will override it.
- You can name different beneficiaries on each IRA account you own, and designations made years ago at old IRA accounts should be confirmed as correct and in accordance with your wishes.