POD Beneficiary signature rejected after passing

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Mike14
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POD Beneficiary signature rejected after passing

Post by Mike14 »

Account owner signed beneficiary paperwork at financial institution's field office.
After the owner's passing, the financial institution is rejecting the signature used to designate the beneficiary.

What responsibility does the financial institution have to notify the owner of any signature discrepancies?
How important is the signature anyway, considering that it was signed in front of an employee with a notary license, who obviously verified the identity of the signer?

This has been escalated several times and they are not budging.

Edit: Additional details:
Brokerage account was opened many years ago. They are saying that the POD signature looks different from account opening signature.
Beneficiary paperwork was completed several years prior to passing.
Last edited by Mike14 on Sun Jun 04, 2023 3:35 pm, edited 1 time in total.
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Re: POD Beneficiary signature rejected after passing

Post by crefwatch »

You've got to say a little more, even if you are not willing to name the financial services provider. Is it a brokerage that likely is subject to regulatory bodies? What exactly do they say is wrong with the signature? What was the credential and job title of the witness/notary? What documents did they ask the signer to present? Was it during business hours? Did you get a copy of the signed document? How many days before the death was the document executed? Was the decedent in credible health and competence in the office? What is the relation between the decedent and who took them to the field office?
stan1
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Re: POD Beneficiary signature rejected after passing

Post by stan1 »

Needs a lot more information. What state? Bank, brokerage, insurance company, etc?

My mom had a brokerage account she opened from a desk in her credit union that ended up with LPL as an inactive account. We transferred the account out a few years ago. LPL basically made her fill out an entirely new account application form before they would transfer it out due to compliance issues. This was in March 2020 so we had to work around COVID protocols to find a notary.
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ResearchMed
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Re: POD Beneficiary signature rejected after passing

Post by ResearchMed »

Mike14 wrote: Sun Jun 04, 2023 2:51 pm Account owner signed beneficiary paperwork at financial institution's field office.
After the owner's passing, the financial institution is rejecting the signature used to designate the beneficiary.

What responsibility does the financial institution have to notify the owner of any signature discrepancies?
How important is the signature anyway, considering that it was signed in front of an employee with a notary license, who obviously verified the identity of the signer?

This has been escalated several times and they are not budging.

That *same* firm's own notary was the person who notarized the original signature?
And now that firm is declining to honor that signature?
There must be some reason they are claiming...
How are they explaining this other than "sorry, no go, too bad"??

Which agency to file a complaint with would probably depend upon just which type of "financial institution": bank? brokerage firm? or ?

RM
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Mike14
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Re: POD Beneficiary signature rejected after passing

Post by Mike14 »

Added additional details.
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Re: POD Beneficiary signature rejected after passing

Post by tibbitts »

Mike14 wrote: Sun Jun 04, 2023 2:51 pm Account owner signed beneficiary paperwork at financial institution's field office.
After the owner's passing, the financial institution is rejecting the signature used to designate the beneficiary.

What responsibility does the financial institution have to notify the owner of any signature discrepancies?
How important is the signature anyway, considering that it was signed in front of an employee with a notary license, who obviously verified the identity of the signer?

This has been escalated several times and they are not budging.

Edit: Additional details:
Brokerage account was opened many years ago. They are saying that the POD signature looks different from account opening signature.
Beneficiary paperwork was completed several years prior to passing.
That's interesting, because it seems like they're saying the notary (their own in this case) has no value.
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ResearchMed
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Re: POD Beneficiary signature rejected after passing

Post by ResearchMed »

tibbitts wrote: Sun Jun 04, 2023 3:38 pm
Mike14 wrote: Sun Jun 04, 2023 2:51 pm Account owner signed beneficiary paperwork at financial institution's field office.
After the owner's passing, the financial institution is rejecting the signature used to designate the beneficiary.

What responsibility does the financial institution have to notify the owner of any signature discrepancies?
How important is the signature anyway, considering that it was signed in front of an employee with a notary license, who obviously verified the identity of the signer?

This has been escalated several times and they are not budging.

Edit: Additional details:
Brokerage account was opened many years ago. They are saying that the POD signature looks different from account opening signature.
Beneficiary paperwork was completed several years prior to passing.
That's interesting, because it seems like they're saying the notary (their own in this case) has no value.

Right.
I thouight the purpose (or *a* purpose?) of a notary was so this type of issue would not be... an issue.

My goodness. MY signature from years past has certainly changed. And especially more recently, after what can seem like 24/7 online/typing, my signature is a mess. That lovely, neat handwriting I used to have? Gone. Totally gone.
And over the decades, my signature has just changed, as has my handwriting more generally.

Indeed, what's the point of having a signature notarized (and by one's OWN notary!?) if one is only going to try to compare one signature with a signature from what might be many years earlier anyway - and then maybe decide they don't look "similar enough"?

RM
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Re: POD Beneficiary signature rejected after passing

Post by stan1 »

Do you know if the POD was ever added to the account online/electronically, or was this all in paper form until the "handwriting analyst" was called in after his death?

Also what is the consequence of the difference in what was on the POD vs what is in the will or intestate order of succession if there was no will? Will this create a rift with another heir who would inherit the account in a different share if it were to pass through the will? That could guide what your next steps are such as hiring an attorney or figuring out where to file a complaint.

I do suspect our attorneys on the site are going to chime in and say "see I told you so, this is why you use a will/trust not POD".
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Re: POD Beneficiary signature rejected after passing

Post by Makefile »

stan1 wrote: Sun Jun 04, 2023 4:10 pm Do you know if the POD was ever added to the account online/electronically, or was this all in paper form until the "handwriting analyst" was called in after his death?
Right, I thought the terms and conditions usually say a paper beneficiary form isn't effective until mailed, received, and processed. Then you usually get a confirmation mailing back listing the beneficiary change. I didn't think you could just sign a paper beneficiary form and stash it away, like a will... not saying it's necessarily what happened here, but that would be a good reason to carefully scrutinize the signature.
nonnie
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Re: POD Beneficiary signature rejected after passing

Post by nonnie »

Perhaps you can contact the agency in your state that regulates notaries and see what advice they have to offer.

https://www.nationalnotary.org/support/ ... -bond-faqs
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Re: POD Beneficiary signature rejected after passing

Post by SuzBanyan »

nonnie wrote: Sun Jun 04, 2023 4:26 pm Perhaps you can contact the agency in your state that regulates notaries and see what advice they have to offer.

https://www.nationalnotary.org/support/ ... -bond-faqs
In California at least, you can see the entry the notary made in their sequential journal, which should have both another signature by the account owner, as well as the identification number from the document used to verify identity (usually driver’s license).
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Re: POD Beneficiary signature rejected after passing

Post by nisiprius »

Mike14, somewhat tangential: how do the signatures look to you? I realize you have reasons why you think a difference in appearance shouldn't matter, but I'm still curious to know. Are they nitpicking, or is it true that the signatures aren't a good visual match?

As a very direct practical matter, are there procedures we should be following to refresh and update our signatures? Should we be obtaining our own notarized signatures every five years or so and sending them to all our financial banks? Maybe there's a good practical reason to save all of our expired passports and drivers' licenses.
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HomeStretch
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Re: POD Beneficiary signature rejected after passing

Post by HomeStretch »

On the surface, this seems unfathomable. Have your attorney contact the head of the legal department at the financial institution. In addition to filing a complaint with any/all applicable regulatory agencies.

The transaction had to be captured on the financial institution’s camera. Do they still have the surveillance videos?
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Re: POD Beneficiary signature rejected after passing

Post by single2019 »

nisiprius wrote: Sun Jun 04, 2023 5:08 pm Mike14, somewhat tangential: how do the signatures look to you?

As a very direct practical matter, are there procedures we should be following to refresh and update our signatures? Should we be obtaining our own notarized signatures every five years or so and sending them to all our financial banks? Maybe there's a good practical reason to save all of our expired passports and drivers' licenses.
All my POD/TOD beneficiary designations were entered online and can be verified online (Vanguard, Fidelity, Schwab, Chase). My annual tax forms on IRAs and HSA include the names and percentages for the beneficiaries.
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Re: POD Beneficiary signature rejected after passing

Post by single2019 »

Mike14 wrote: Sun Jun 04, 2023 3:36 pm Added additional details.
Why didn’t you name the brokerage?
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Re: POD Beneficiary signature rejected after passing

Post by Joey Jo Jo Jr »

Makefile wrote: Sun Jun 04, 2023 4:15 pm
stan1 wrote: Sun Jun 04, 2023 4:10 pm Do you know if the POD was ever added to the account online/electronically, or was this all in paper form until the "handwriting analyst" was called in after his death?
Right, I thought the terms and conditions usually say a paper beneficiary form isn't effective until mailed, received, and processed. Then you usually get a confirmation mailing back listing the beneficiary change. I didn't think you could just sign a paper beneficiary form and stash it away, like a will... not saying it's necessarily what happened here, but that would be a good reason to carefully scrutinize the signature.
I’m wondering this as well. If the bene designation was provided by owner during life it would have already been processed. But institutions generally have a policy against accepting these after death since the owner isn’t around to confirm. There are plenty of reasons to hate on institutions but this isn’t one IMHO.

To fix this you may need the consent of the prior beneficiaries (or if none the default beneficiaries) maybe even as a consent order approved by the probate court. If they don’t consent you can consider a declaratory judgment action.
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Re: POD Beneficiary signature rejected after passing

Post by Watty »

Mike14 wrote: Sun Jun 04, 2023 2:51 pm This has been escalated several times and they are not budging.
Often times a letter from a lawyer will get results a lot better than anything else.

That may be because once a lawyer is involved it will get passed over to their legal department instead of their normal bureaucracy.
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typical.investor
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Re: POD Beneficiary signature rejected after passing

Post by typical.investor »

Watty wrote: Sun Jun 04, 2023 6:10 pm
Mike14 wrote: Sun Jun 04, 2023 2:51 pm This has been escalated several times and they are not budging.
Often times a letter from a lawyer will get results a lot better than anything else.

That may be because once a lawyer is involved it will get passed over to their legal department instead of their normal bureaucracy.
Filing a FINRA complaint may help get results.

https://www.finra.org/investors/need-he ... -complaint
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Re: POD Beneficiary signature rejected after passing

Post by Watty »

typical.investor wrote: Sun Jun 04, 2023 6:23 pm
Watty wrote: Sun Jun 04, 2023 6:10 pm
Mike14 wrote: Sun Jun 04, 2023 2:51 pm This has been escalated several times and they are not budging.
Often times a letter from a lawyer will get results a lot better than anything else.

That may be because once a lawyer is involved it will get passed over to their legal department instead of their normal bureaucracy.
Filing a FINRA complaint may help get results.

https://www.finra.org/investors/need-he ... -complaint
Good suggestion.
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Re: POD Beneficiary signature rejected after passing

Post by SxSW »

tibbitts wrote: Sun Jun 04, 2023 3:38 pm
That's interesting, because it seems like they're saying the notary (their own in this case) has no value.
The sad truth is that notaries have essentially no value. They are notorious for not verifying identity. Check out the DocX scandal, for example.

http://thjf.org/2012/12/12/who-is-linda-green/

Of course, if the firm in question accepted the forms originally, it prompts the question of why they were acceptable then, but not now.
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Re: POD Beneficiary signature rejected after passing

Post by crefwatch »

Check what kind of evidence you may have that the designation was, previously, accepted. Did you get an occcasional (I mean, routine) regulatory query about the "Objectives" of the investor and the identifying information on the account? I got those all the time on my IRA. It might have listed the Beneficiaries as text.

The other idea is a paper they sent acknowledging the designation. (?) I had the opposite experience at a too-big-to-fail bank; When they suddenly told me I didn't have (anymore .... ) Agent designation, I sent them a copy of the old POA, on their proprietary form, that she and I had done years before. The bank said, sorry, OK. You're an Agent! No need to do it again.
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Re: POD Beneficiary signature rejected after passing

Post by ResearchMed »

crefwatch wrote: Mon Jun 05, 2023 11:13 am Check what kind of evidence you may have that the designation was, previously, accepted. Did you get an occcasional (I mean, routine) regulatory query about the "Objectives" of the investor and the identifying information on the account? I got those all the time on my IRA. It might have listed the Beneficiaries as text.

The other idea is a paper they sent acknowledging the designation. (?) I had the opposite experience at a too-big-to-fail bank; When they suddenly told me I didn't have (anymore .... ) Agent designation, I sent them a copy of the old POA, on their proprietary form, that she and I had done years before. The bank said, sorry, OK. You're an Agent! No need to do it again.

What type of "regulatory query" about "Objectives"?
I've been POA/full agent/etc., for DH's accounts at several financial firms for quite a few years, and I've never received anything like that. And anything like that would come to me, as "his" contact info is my e-address and my phone number, at his request.

And IF it came to the house via snail mail, he'd no doubt give it to me with an "Is this important?" because he simply does *not* want to deal with any of this. He really enjoys his work (well after any "regular" retirement age), and handles the bills, but zero interest in investments.

Thanks.

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Re: POD Beneficiary signature rejected after passing

Post by Lee_WSP »

Mike14 wrote: Sun Jun 04, 2023 2:51 pm Account owner signed beneficiary paperwork at financial institution's field office.
How important is the signature anyway, considering that it was signed in front of an employee with a notary license, who obviously verified the identity of the signer?
Extremely important, but it should have been processed years ago. Was the signature notarized or was the notary simply present? Notarization requires a rather formal process including a log book and usually a stamp.
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Re: POD Beneficiary signature rejected after passing

Post by crefwatch »

ResearchMed wrote: Mon Jun 05, 2023 11:50 am What type of "regulatory query" about "Objectives"?
I've been POA/full agent/etc., for DH's accounts at several financial firms for quite a few years, and I've never received anything like that.
In don't have one handy, but I get them a lot, for our own accounts. The "objective" question, like "capital preservation" is one defense against dishonest brokers. I replied to one of these error reporting forms when TIAA made an unsolicited change in the registration/address of my IRA so that it no longer had the letters "IRA" in it. I thought that was an invitation to an error in their offices. They put the three letters back in.
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Re: POD Beneficiary signature rejected after passing

Post by Aggieland »

single2019 wrote: Sun Jun 04, 2023 5:47 pm
Mike14 wrote: Sun Jun 04, 2023 3:36 pm Added additional details.
Why didn’t you name the brokerage?
+1 who is the brokerage?
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Re: POD Beneficiary signature rejected after passing

Post by michaeljc70 »

single2019 wrote: Sun Jun 04, 2023 5:44 pm
nisiprius wrote: Sun Jun 04, 2023 5:08 pm Mike14, somewhat tangential: how do the signatures look to you?

As a very direct practical matter, are there procedures we should be following to refresh and update our signatures? Should we be obtaining our own notarized signatures every five years or so and sending them to all our financial banks? Maybe there's a good practical reason to save all of our expired passports and drivers' licenses.
All my POD/TOD beneficiary designations were entered online and can be verified online (Vanguard, Fidelity, Schwab, Chase). My annual tax forms on IRAs and HSA include the names and percentages for the beneficiaries.
+1

Obviously this doesn't help the OP now.
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Re: POD Beneficiary signature rejected after passing

Post by michaeljc70 »

I'll add, that in some states, this being rejected could cause major issues. What I mean is in states that you have to go through an expensive probate over XXX$, this being rejected could put you in that category blowing up your estate planning. I suppose some will say you should have paid a lawyer $3k to do a trust or whatever.....and I don't reject that entirely...but.....
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Re: POD Beneficiary signature rejected after passing

Post by 123 »

I am aware that there are some brokerage and life insurance companies where "acceptance" of a beneficiary designation in their account agreements only happens when the financial institution posts the new beneficiary into their automated system of records. If the beneficiary designation has not been entered into their system it would just be regarded as incomplete and subject to further study/review. Financial organization have mechanisms to deal with "wet ink" documents, some may store actual documents, others may work from microfilm or digital copies. So errors and oversights in processing are not that unusual.

In this case I would suspect that the intended beneficiary would need to engage the financial institution in litigation and get some kind of court judgement about the proper beneficiary for the account. Perhaps the financial institution would welcome such litigation to settle the matter.

Of course some of us are curious if the the financial institution has has already distributed to the proceeds to a previous beneficiary or to some other party in accordance with the terms of the account agreement or applicable state law. If the financial institution distributes funds to an inappropriate individual that does not absolve them of their obligation to pay the proper beneficiary.
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Re: POD Beneficiary signature rejected after passing

Post by michaeljc70 »

Just...wow. I am finding this whole discussion to be unbelievable. As I stated above, all my beneficiary designations were done online. If they were later found to be invalid, that would be so unbelievable. Beneficiaries are a major estate planning tool and if they are not honored...the implications could be huge. Beneficiaries are keeping my estate below the probate limit in my state. If I had to make changes because I thought they wouldn't be honored, it would cost me thousands of dollars.
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Re: POD Beneficiary signature rejected after passing

Post by cadreamer2015 »

Beneficiaries are keeping my estate below the probate limit in my state.
I am not a lawyer, but does having a POD of TOD designation of beneficiaries really exclude your assets from probate limits? I understand that those assets would transfer without going through probate, but I believe they certainly would count as assets for estate tax consideration. Do POD and TOD designations work like a trust and keep assets out of probate limits?

I learn something new almost every day on Bogleheads.

Edited to add that after a little research this all depends on state law, but that in many states POD and TOD assets do not count towards small estate probate limits.
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Re: POD Beneficiary signature rejected after passing

Post by celia »

OP, it is possible the notary witnessed a change of beneficiary and the institution has some information that the original beneficiary (or an even later change) shows the beneficiary isn’t who you think, but they don’t say that since it is none of your business as far as the transfer of assets.

Do you have access to the account owner’s signature over time, say on copies of cashed checks (that comes with bank statements) or with Christmas or birthday cards (hopefully not from a close relative who just signs “Love, mom”.
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Re: POD Beneficiary signature rejected after passing

Post by JBTX »

Do you have access to any of the statements? Sometimes they will show the POD/TOD somewhere, including in the account title.

If the TOD is clearly listed on the statements seems like it would be hard to argue that the deceased failed to notice a fraudulent TOD form with an unintended beneficiary.

Might be worth having an attorney draft and send a demand letter of sorts, if the amount is material enough to worry with it.
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Re: POD Beneficiary signature rejected after passing

Post by DeliberateDonkey »

Am I missing something, or was this paperwork filled out years prior to passing and not filed until after the fact? That is how the post reads to me, anyway.

While I can't speak to the regulatory implications of the situation, I would be awfully suspicious if someone came in with paperwork to change the beneficiary on a deceased person's account. Perhaps it is typical and I have just not experienced it.
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Re: POD Beneficiary signature rejected after passing

Post by JBTX »

cadreamer2015 wrote: Sat Jun 10, 2023 6:42 am
Beneficiaries are keeping my estate below the probate limit in my state.
I am not a lawyer, but does having a POD of TOD designation of beneficiaries really exclude your assets from probate limits? I understand that those assets would transfer without going through probate, but I believe they certainly would count as assets for estate tax consideration. Do POD and TOD designations work like a trust and keep assets out of probate limits?

I learn something new almost every day on Bogleheads.

Edited to add that after a little research this all depends on state law, but that in many states POD and TOD assets do not count towards small estate probate limits.
Probate and estate tax are not the same thing. Something can avoid probate but still be part of a taxable estate.
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Re: POD Beneficiary signature rejected after passing

Post by stan1 »

Mike14 wrote: Sun Jun 04, 2023 2:51 pm This has been escalated several times and they are not budging.
OP, any updates or feedback?

Several have recommended having an attorney write a letter of demand if the amount warrants it. If the POD designation is different than the will or state intestacy succession rules you might also need to discuss that with an attorney.
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