Clients have a right to keep their IRA beneficiary designationsprivate. But you might want to advise them that this privacy canhave a high price for loved ones – as the case of the late WayneWilson shows.
In 2010, the 9th Circuit Court of Appeals upheld thepriority of an IRA beneficiary designation over the claim made by awidow who asserted her rights to receive qualified retirement planbenefits under ERISA’s surviving spouse requirements. Thecase (Charles Schwab & Co. v. Chandler) was brought by the IRAcustodian, Charles Schwab, to resolve a dispute between the fourmarried children of Wayne Wilson and hiswidow, Katherine Chandler, to whom he had been married since2000.
Wilson had participated in his company’s 401(k) plan untilmaking a rollover to an IRA in 1994.He then continued to consolidate and move his IRA assets betweenaccounts and custodians until his accidental death in 2005, whenhis truck and horse trailer was washed away and overturned in aflash flood in Arizona.
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