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The high cost of keeping IRA beneficiary designations private

IRAs give owners the option of keeping assets and beneficiary designations private. However, when people don't have a clear understanding of beneficiary designations, things can go awry.

By Rich White | Updated on June 09, 2015
Photo: AP

Clients have a right to keep their IRA beneficiary designations private. But you might want to advise them that this privacy can have a high price for loved ones – as the case of the late Wayne Wilson shows.

In 2010, the 9th Circuit Court of Appeals upheld the priority of an IRA beneficiary designation over the claim made by a widow who asserted her rights to receive qualified retirement plan benefits under ERISA’s surviving spouse requirements.  The case (Charles Schwab & Co. v. Chandler) was brought by the IRA custodian, Charles Schwab, to resolve a dispute between the four married children of Wayne Wilson and his widow, Katherine Chandler, to whom he had been married since 2000.

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