Very uncomfortable phone call w/Vanguard about Beneficiaries

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
markcoop
Posts: 1054
Joined: Fri Mar 02, 2007 8:36 am

Very uncomfortable phone call w/Vanguard about Beneficiaries

Post by markcoop » Tue Dec 16, 2014 10:17 am

I just had what I believe is the worst phone call with Vanguard I have ever had. Here is my issue. I wanted to make sure my beneficiaries were set up properly for all my accounts. I had set them up years ago, but in helping out a friend, I noticed something odd. When I look at the beneficiaries on the Vanguard website (go to My accounts -> Account maintenance -> Beneficiaries) I see a list of all accounts with beneficiaries. On the right side, there's a link to View accounts. When I click on that link for my ROTH IRA (I hold Vanguard mutual funds and VBS assets in there), I only see the Vanguard mutual funds listed. I see nothing about the VBS assets (I hold Vanguard ETFs, as well as non-Vanguard assets in there). The phone rep, after being transferred to a beneficiary expert, said that it was a limitation in their system. I then asked about VBS accounts outside of an IRA (this was my friend's situation). After being told that I can put a beneficiary on VBS assets, I explained I did not see any way to do it. When I click on View/Edit accounts, it only showed my Vanguard mutual funds, nothing about VBS accounts. She then told me that if my VBS account is linked to a Vanguard fund, it will have all the same beneficiaries. My response was since I have my sweep account money market account listed with a beneficiary, that means everything in my VBS will get the same beneficiary? She said yes. I responded I am very uncomfortable by this limitation in their system not to list it (not even sure I believe everything I was told). I then asked if there was any way to open up some kind of problem report to fix it. All I got back was, "yes, I understand your concern". When I pressed will you do something, she replied that she can send me a letter stating what she said. I responded please do that but I think you need to fix this. More "Yes, sir. I understand."

Anyone here familiar with what I'm talking about here? Concerned?

The issue was half the problem. In general I have been very happy Vanguard's customer service. Mistakes do happen, but they were always dealt with by what I considered a reasonable action. Being "yes"ed by Vanguard today was really uncomfortable for me.
Mark

fposte
Posts: 1722
Joined: Mon Sep 02, 2013 1:32 pm

Re: Very uncomfortable phone with Vanguard about Beneficiari

Post by fposte » Tue Dec 16, 2014 10:20 am

Call back and try another. I got a real dud once--unpleasant and dismissive--but most of the time I've found them very helpful. (And I'm interested in the answer to this too, because I couldn't find a way to put beneficiaries on the VBS account either.)

Jack FFR1846
Posts: 10437
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Jack FFR1846 » Tue Dec 16, 2014 10:38 am

She may have heard this issue come up before, reported the issue, followed up and been told that this is how their software works and that they don't plan to change it.

Vanguard is not known for their online (from the 90's) website.
Bogle: Smart Beta is stupid

red5
Posts: 786
Joined: Sun Apr 01, 2012 4:42 pm

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by red5 » Tue Dec 16, 2014 10:47 am

On my birthday Vanguard sent an e-mail suggesting I check my beneficiaries. Low and behold I ran into a similar issue. I was able to check and change my fund beneficiaries but I was not able to do so with my VBS funds.

I sent them an e-mail asking about this and they replied back stating that yes this is the case and that the VBS beneficiaries are the same as one of my fund designations (I believe it was my money market sweep fund).

Topic Author
markcoop
Posts: 1054
Joined: Fri Mar 02, 2007 8:36 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by markcoop » Tue Dec 16, 2014 11:32 am

Thanks for the replies.

I will call back at some point. It's good to know that my VBS accounts are probably covered. I'm not going to be satisfied till I see it listed. "This is how their software works" is really not an acceptable excuse. If the information being presented is not accurate, they need to change the software. I would think a company the size of Vanguard would agree with this thought. Fast forward into the future - In case there's an issue, do you really want your heirs to deal with this?
Mark

harmony
Posts: 536
Joined: Sun Nov 24, 2013 1:35 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by harmony » Wed Dec 17, 2014 11:06 am

Some time ago I made note of a change in beneficiary designation policies at Vanguard which was reported in this article:

http://www.forbes.com/forbes/2007/0903/068.html (I just tried it and the link is still good.)

At first glance, this may not be exactly the same situaion you are experiencing, but I am posting the link because you might want to compare the article to the facts of your case for yourself.

User avatar
Taylor Larimore
Advisory Board
Posts: 28808
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Telephone calls ?

Post by Taylor Larimore » Wed Dec 17, 2014 11:15 am

Marcoop:

It is dangerous to rely on a telephone representative when important information is involved. Always get information that must be relied upon in writing--and keep a copy.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

_travis
Posts: 1
Joined: Wed Dec 17, 2014 11:47 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by _travis » Wed Dec 17, 2014 11:58 am

Each year around my birthday I receive a beneficiary verification letter. On the second page of mine it lists all of my funds that are affected including my brokerage account number. Check yours and it should list your brokerage account number.

Alan S.
Posts: 8677
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Alan S. » Wed Dec 17, 2014 2:13 pm

Just one more reason to get your accounts combined in a single brokerage account ASAP.

It is very serious if your beneficiary designations are not clear to you, and possibly not clear to VG and their Reps as well. Note that VG has historically maintained a number of different beneficiary restrictions that are not common to other custodians. In the past this has included refusal to accept survivorship periods (eg 30 days, 90 days etc), various problems with per stirpes or per capita designations, and more recently requiring all accounts of a certain kind to have identical designations for certain account types. More confusion results from changes at various points of time and exceptions for certain clients, either individually or perhaps because they are flagship clients.

It is difficult to generalize with all these factors in play. Suffice it to say that you need to address your particular situation and be sure your beneficiary designations have been accepted by VG and are clearly specified on each account you have. If there are issues, you may be able to work them out with VG, but if you cannot you will have to make a decision of either accepting the situation or moving the assets. Either is better than making assumptions that may not be correct which could lead to unexpected results at your death and some very disappointed beneficiaries who may blame you and not VG.

User avatar
Dale_G
Posts: 3269
Joined: Tue Feb 20, 2007 5:43 pm
Location: Central Florida - on the grown up side of 82

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Dale_G » Wed Dec 17, 2014 3:54 pm

The beneficiary designation on the sweep account Money Market fund applies to all holdings in the (separately held) brokerage account. In the case where there is a brokerage account and a separate mutual fund account, the mutual fund account can have different beneficiaries.

I don't know what happens when the mutual funds are moved into the brokerage account after "upgrading". Perhaps someone who has "upgraded" to a combined account can shed some light on that.

Dale
Volatility is my friend

Norris
Posts: 526
Joined: Tue May 08, 2007 10:04 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Norris » Wed Dec 17, 2014 6:01 pm

I have been "upgraded" and just checked my beneficiaries. They are who their supposed to be. I have three brokerage accounts at Vanguard, one for my taxable account, one for TIRA and one for Roth. There is a separate account number for each of these three brokerage accounts but no individual fund numbers. I don't hold anything other than Vanguard mutual funds but I would think any and all holdings in a VBS account would go to the beneficiary designated for that particular account number.

Norris
Life is really simple, but we insist on making it complicated. Confucius

JDDS
Moderator
Posts: 1001
Joined: Sun Mar 16, 2014 2:24 pm

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by JDDS » Thu Dec 18, 2014 12:21 am

This is probably one of the lessor noticed limitations of the split MF vs. VBS account structure. Hopefully they have improved the interface for clarity on the new combined brokerage account structure. I don't doubt that the phone rep agrees the situation is less than ideal, but a phone rep is not in a decision making position such that they can promise a fix.

toto238
Posts: 1891
Joined: Wed Feb 05, 2014 2:39 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by toto238 » Thu Dec 18, 2014 1:34 am

JDDS wrote:This is probably one of the lessor noticed limitations of the split MF vs. VBS account structure. Hopefully they have improved the interface for clarity on the new combined brokerage account structure. I don't doubt that the phone rep agrees the situation is less than ideal, but a phone rep is not in a decision making position such that they can promise a fix.
+1 to this.

Under the beneficiaries page it should list your VBS account number there under the holdings. That's simply how the system works. Under the new upgraded system it may be more clear but I find using the old system it's perfectly clear to me. It lists every mutual fund and the VBS account number so there's no question in my mind that the beneficiaries are set up correctly.

Silence Dogood
Posts: 1150
Joined: Tue Feb 01, 2011 9:22 pm

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Silence Dogood » Thu Dec 18, 2014 9:26 am

Right now I have a mutual fund only account.

Does anyone know (from experience) if I will need to change/add beneficiaries once I switch the the "new" brokerage account (the combined account)? In other words, will all of my current beneficiary settings be saved?

Browser
Posts: 4857
Joined: Wed Sep 05, 2012 4:54 pm

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Browser » Thu Dec 18, 2014 12:35 pm

Alan S. wrote:Just one more reason to get your accounts combined in a single brokerage account ASAP.

It is very serious if your beneficiary designations are not clear to you, and possibly not clear to VG and their Reps as well. Note that VG has historically maintained a number of different beneficiary restrictions that are not common to other custodians. In the past this has included refusal to accept survivorship periods (eg 30 days, 90 days etc), various problems with per stirpes or per capita designations, and more recently requiring all accounts of a certain kind to have identical designations for certain account types. More confusion results from changes at various points of time and exceptions for certain clients, either individually or perhaps because they are flagship clients.

It is difficult to generalize with all these factors in play. Suffice it to say that you need to address your particular situation and be sure your beneficiary designations have been accepted by VG and are clearly specified on each account you have. If there are issues, you may be able to work them out with VG, but if you cannot you will have to make a decision of either accepting the situation or moving the assets. Either is better than making assumptions that may not be correct which could lead to unexpected results at your death and some very disappointed beneficiaries who may blame you and not VG.
Let me underline the importance of the observations that Alan S. has stated regarding the limitations and inadequacies of Vanguard's beneficiary designations. It's essential that clients make the effort to clarify exactly how Vanguard has recorded those and to determine if they correctly match your intentions. Unless you're a Flagship client ($1M in assets), you are limited to Vanguard's cookie cutter beneficiary options. One problem is that they may stick you into one of those boxes even though that isn't what you requested, and they won't tell you or explain it to you. In my case, I wanted to designate my sister as primary and her offspring per stirpes. That doesn't fit their available recipes, so they set up my sister as primary and simply dropped my nephews as per stirpes beneficiaries. I didn't know it until I checked my designations online much later. There are other issues I've had and the net result is that I've ended up moving a lot of money out of Vanguard to other custodians who can accommodate my requirements. Vanguard has some good investment products and some lousy customer service. I guess when you're the largest fund and ETF provider in the universe you just don't have to care.
We don't know where we are, or where we're going -- but we're making good time.

toto238
Posts: 1891
Joined: Wed Feb 05, 2014 2:39 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by toto238 » Thu Dec 18, 2014 12:49 pm

Silence Dogood wrote:Right now I have a mutual fund only account.

Does anyone know (from experience) if I will need to change/add beneficiaries once I switch the the "new" brokerage account (the combined account)? In other words, will all of my current beneficiary settings be saved?
If you're MF-only and like it that way, you don't even HAVE to upgrade. You can but you don't have to. They have to maintain MF-only accounts for those that are not allowed to open brokerage accounts.

But yes, the beneficiaries should roll over no problem unless you have something customized, non-standard. In my case, I have my wife as my primary, and "to my descendants who survive me per stirpes" as secondary. Boom done. If you have something complex like "to my wife's sister's niece-in-law, but only if she survives her spouse by 90 days" etc. well then I don't know.

User avatar
FelixTheCat
Posts: 1667
Joined: Sat Sep 24, 2011 12:39 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by FelixTheCat » Thu Dec 18, 2014 12:54 pm

Your problem is easily fixed. Get a trust that names the beneficiaries of your estate. Name the trust as the beneficiary on your accounts.
Felix is a wonderful, wonderful cat.

Browser
Posts: 4857
Joined: Wed Sep 05, 2012 4:54 pm

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Browser » Thu Dec 18, 2014 12:58 pm

imgritz wrote:Your problem is easily fixed. Get a trust that names the beneficiaries of your estate. Name the trust as the beneficiary on your accounts.
You need to understand how trusts work before doing this. They have some limitations when named as beneficiary, such as not being able to "stretch" inherited IRAs
We don't know where we are, or where we're going -- but we're making good time.

Topic Author
markcoop
Posts: 1054
Joined: Fri Mar 02, 2007 8:36 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by markcoop » Thu Dec 18, 2014 1:02 pm

Browser wrote:Unless you're a Flagship client ($1M in assets), you are limited to Vanguard's cookie cutter beneficiary options.
Please explain. Do flagship clients have different options?
JDDS wrote:...a phone rep is not in a decision making position such that they can promise a fix.
They are in a position to open some kind of problem report where the matter is looked into and a formal response is made.
toto238 wrote:Under the beneficiaries page it should list your VBS account number there under the holdings. That's simply how the system works. Under the new upgraded system it may be more clear but I find using the old system it's perfectly clear to me. It lists every mutual fund and the VBS account number so there's no question in my mind that the beneficiaries are set up correctly.
When I look at the beneficiaries page it lists all the accounts except the VBS account. This is why I called them in the first place. Doesn't seem like the system works perfectly.

The prime MM sweep account has the account number of the VBS account mentioned in it's title. It sounds from the phone rep and people here, although I still would like to see it listed when I look at the website, that that means the VBS account has the same beneficiaries as the prime MM account. I still plan to make sure I have this writing and I see no reason why Vanguard does not make this clear.
Mark

User avatar
FelixTheCat
Posts: 1667
Joined: Sat Sep 24, 2011 12:39 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by FelixTheCat » Thu Dec 18, 2014 1:11 pm

Browser wrote:
imgritz wrote:Your problem is easily fixed. Get a trust that names the beneficiaries of your estate. Name the trust as the beneficiary on your accounts.
You need to understand how trusts work before doing this. They have some limitations when named as beneficiary, such as not being able to "stretch" inherited IRAs
What do you mean by stretching an inherited IRA? I inherited an IRA from a trust. I was told I could keep it as is and receive distributions at retirement OR cash it out and pay the taxes. Is there a third option?
Felix is a wonderful, wonderful cat.

Silence Dogood
Posts: 1150
Joined: Tue Feb 01, 2011 9:22 pm

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Silence Dogood » Thu Dec 18, 2014 1:30 pm

toto238 wrote:
Silence Dogood wrote:Right now I have a mutual fund only account.

Does anyone know (from experience) if I will need to change/add beneficiaries once I switch the the "new" brokerage account (the combined account)? In other words, will all of my current beneficiary settings be saved?
If you're MF-only and like it that way, you don't even HAVE to upgrade. You can but you don't have to. They have to maintain MF-only accounts for those that are not allowed to open brokerage accounts.

But yes, the beneficiaries should roll over no problem unless you have something customized, non-standard. In my case, I have my wife as my primary, and "to my descendants who survive me per stirpes" as secondary. Boom done. If you have something complex like "to my wife's sister's niece-in-law, but only if she survives her spouse by 90 days" etc. well then I don't know.
I thought that the plan was for all of us to be pushed to the new brokerage account. Why are some people not allowed to open brokerage accounts? I'm not against switching over, they just haven't asked me to yet. I only own one fund and don't check on my balance that often so it hardly makes a difference to me.

Right now my beneficiaries are set up this way:

1) Whoever I'm married to at the time of my death. (I'm not actually married yet though)

2) Split between my two sisters (50/50)

Seems like I should be fine even if I do switch over to the new account.

toto238
Posts: 1891
Joined: Wed Feb 05, 2014 2:39 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by toto238 » Thu Dec 18, 2014 3:28 pm

Silence Dogood wrote:
toto238 wrote:
Silence Dogood wrote:Right now I have a mutual fund only account.

Does anyone know (from experience) if I will need to change/add beneficiaries once I switch the the "new" brokerage account (the combined account)? In other words, will all of my current beneficiary settings be saved?
If you're MF-only and like it that way, you don't even HAVE to upgrade. You can but you don't have to. They have to maintain MF-only accounts for those that are not allowed to open brokerage accounts.

But yes, the beneficiaries should roll over no problem unless you have something customized, non-standard. In my case, I have my wife as my primary, and "to my descendants who survive me per stirpes" as secondary. Boom done. If you have something complex like "to my wife's sister's niece-in-law, but only if she survives her spouse by 90 days" etc. well then I don't know.
I thought that the plan was for all of us to be pushed to the new brokerage account. Why are some people not allowed to open brokerage accounts? I'm not against switching over, they just haven't asked me to yet. I only own one fund and don't check on my balance that often so it hardly makes a difference to me.

Right now my beneficiaries are set up this way:

1) Whoever I'm married to at the time of my death. (I'm not actually married yet though)

2) Split between my two sisters (50/50)

Seems like I should be fine even if I do switch over to the new account.
Some people's employers don't allow them to have brokerage accounts at any other firm. Mostly people in the financial industry. I'm fairly certain VG doesn't want to lose that business. So if you tell the VG people "I'm not allowed to have a brokerage account because of my employer" they may stop bothering you. It's not like they have any way of checking whether you're telling the truth.

toto238
Posts: 1891
Joined: Wed Feb 05, 2014 2:39 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by toto238 » Thu Dec 18, 2014 3:33 pm

markcoop wrote:
Browser wrote:Unless you're a Flagship client ($1M in assets), you are limited to Vanguard's cookie cutter beneficiary options.
Please explain. Do flagship clients have different options?
JDDS wrote:...a phone rep is not in a decision making position such that they can promise a fix.
They are in a position to open some kind of problem report where the matter is looked into and a formal response is made.
toto238 wrote:Under the beneficiaries page it should list your VBS account number there under the holdings. That's simply how the system works. Under the new upgraded system it may be more clear but I find using the old system it's perfectly clear to me. It lists every mutual fund and the VBS account number so there's no question in my mind that the beneficiaries are set up correctly.
When I look at the beneficiaries page it lists all the accounts except the VBS account. This is why I called them in the first place. Doesn't seem like the system works perfectly.

The prime MM sweep account has the account number of the VBS account mentioned in it's title. It sounds from the phone rep and people here, although I still would like to see it listed when I look at the website, that that means the VBS account has the same beneficiaries as the prime MM account. I still plan to make sure I have this writing and I see no reason why Vanguard does not make this clear.
I feel like the beneficiaries screen that lists the VBS account number makes it pretty dern clear to me. There's 0 question in my mind that it's included. I see the account number right there. I don't really know what else you'd like. I feel like what they display is completely reasonable and I don't want them expending resources trying to change things around so everyone is satisfied.

And I think you strongly over-estimate what any individual phone rep is able to do. At best, they may be able to submit a suggestion into a suggestion box. Of which 99% are probably skimmed and disposed of. I think you got upset at a powerless phone rep over something that they can't do anything meaningful about, and that really doesn't bother 99% of clients.

Topic Author
markcoop
Posts: 1054
Joined: Fri Mar 02, 2007 8:36 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by markcoop » Thu Dec 18, 2014 4:02 pm

toto238 wrote:I feel like the beneficiaries screen that lists the VBS account number makes it pretty dern clear to me. There's 0 question in my mind that it's included. I see the account number right there. I don't really know what else you'd like. I feel like what they display is completely reasonable and I don't want them expending resources trying to change things around so everyone is satisfied.

And I think you strongly over-estimate what any individual phone rep is able to do. At best, they may be able to submit a suggestion into a suggestion box. Of which 99% are probably skimmed and disposed of. I think you got upset at a powerless phone rep over something that they can't do anything meaningful about, and that really doesn't bother 99% of clients.
I am not sure where you're looking. Perhaps your screen is different than mine. But I see everything but my VBS accounts listed on the beneficiary page. In fact, it may be even more concerning if different clients are seeing different things.

You may say it doesn't bother 99% of the clients, but the beneficiary information should be stated clearly. This is not a nice suggestion. As far as I'm concerned, this is a problem with their system that they should fix. Something that I expect the rep to think it warrants an inquiry. In the past, I have had reps call me back after they investigated a particular issue. I feel this is important enough to merit the same treatment. You don't have to agree, but to this client, clarity about beneficiaries is mandatory. Vanguard sends out a reminder every year about checking your beneficiaries. Someone at Vanguard must feel it's important too.
Mark

toto238
Posts: 1891
Joined: Wed Feb 05, 2014 2:39 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by toto238 » Thu Dec 18, 2014 6:19 pm

markcoop wrote:The prime MM sweep account has the account number of the VBS account mentioned in it's title. It sounds from the phone rep and people here, although I still would like to see it listed when I look at the website, that that means the VBS account has the same beneficiaries as the prime MM account. I still plan to make sure I have this writing and I see no reason why Vanguard does not make this clear.
markcoop wrote:
toto238 wrote:I feel like the beneficiaries screen that lists the VBS account number makes it pretty dern clear to me. There's 0 question in my mind that it's included. I see the account number right there. I don't really know what else you'd like. I feel like what they display is completely reasonable and I don't want them expending resources trying to change things around so everyone is satisfied.

And I think you strongly over-estimate what any individual phone rep is able to do. At best, they may be able to submit a suggestion into a suggestion box. Of which 99% are probably skimmed and disposed of. I think you got upset at a powerless phone rep over something that they can't do anything meaningful about, and that really doesn't bother 99% of clients.
I am not sure where you're looking. Perhaps your screen is different than mine. But I see everything but my VBS accounts listed on the beneficiary page. In fact, it may be even more concerning if different clients are seeing different things.

You may say it doesn't bother 99% of the clients, but the beneficiary information should be stated clearly. This is not a nice suggestion. As far as I'm concerned, this is a problem with their system that they should fix. Something that I expect the rep to think it warrants an inquiry. In the past, I have had reps call me back after they investigated a particular issue. I feel this is important enough to merit the same treatment. You don't have to agree, but to this client, clarity about beneficiaries is mandatory. Vanguard sends out a reminder every year about checking your beneficiaries. Someone at Vanguard must feel it's important too.
Yes I see the VBS account number listed under the Prime Money Market sweep account as well. That is what clearly indicates that the VBS is part of the same account and therefore has the same beneficiaries. That doesn't sound like a system error or problem to me. It's a layout issue. You don't like the layout of one page of the website. That's fine. That's your opinion. You feel like it could be more clear. Ok, so they can put that in the suggestion box. But it's certainly not a pressing issue. It's a display/layout preference that you have.

If you want the display to be more clear, upgrade to the new consolidated brokerage account, and the layout will likely be more to your liking. But its clearly not a system issue. It's simply that you prefer the layout to be slightly different.

toto238
Posts: 1891
Joined: Wed Feb 05, 2014 2:39 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by toto238 » Thu Dec 18, 2014 6:22 pm

Can someone with the upgraded brokerage account report on what their beneficiary page looks like? Maybe a screenshot with the sensitive information blocked out?

Browser
Posts: 4857
Joined: Wed Sep 05, 2012 4:54 pm

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Browser » Thu Dec 18, 2014 6:30 pm

@ markcoop: Flagship clients are allowed to have customized beneficiary designations at Vanguard.

@ imgritz: Inherited IRAs must be distributed with required minimum distributions based on the age of the beneficiary. If the original owner specifies contingent beneficiaries who are young, passing the IRA to them allows the IRA to be "stretched" over a much longer period of time and allowed to grow because much lower RMDs are required. One estate planning strategy, for example, is for the original owner to designate a child or even grandchild or great-grandchild as contingent beneficiaries, which would optionally allow the inherited IRA to be passed to them. If a trust is designated as beneficiary, RMDs must be based on the age of the oldest named beneficiary in the trust. Thus, for example, if the original owner designates a sibling as well as perhaps children, grandchildren, etc. they must all take RMDs based on the oldest - most likely the sibling. There is no way of stretching the IRA beyond the age of the oldest named beneficiary in the trust.
We don't know where we are, or where we're going -- but we're making good time.

Happygolucky
Posts: 8
Joined: Sat Aug 09, 2014 11:17 pm

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Happygolucky » Thu Dec 18, 2014 6:48 pm

We(me and my wife) have a Joint tenant taxable brokerage account with Vanguard. I have just hung up the phone with the VG representative,who claims I can't designate beneficiaries as its a joint account, and not possible even if we both consent for the same.He has no further advise to offer.Any body in same situation ? Any suggestions is much appreciated.
Thank you.

toto238
Posts: 1891
Joined: Wed Feb 05, 2014 2:39 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by toto238 » Thu Dec 18, 2014 7:02 pm

Happygolucky wrote:We(me and my wife) have a Joint tenant taxable brokerage account with Vanguard. I have just hung up the phone with the VG representative,who claims I can't designate beneficiaries as its a joint account, and not possible even if we both consent for the same.He has no further advise to offer.Any body in same situation ? Any suggestions is much appreciated.
Thank you.
I have seen this before. Yes, you can't have any further beneficiares on a joint at VG because you are each other's beneficiaries. They used to allow it, but discontinued it, and now only a small group of people are grandfathered into it. My understanding is that it was a feature that was very rarely used, and the few times it was it created more trouble than it was worth. It puts VG in the situation where they have to figure out who died first, or something along those lines, and that's simply not a legal liability they want.

WORKAROUND:

Open an individual taxable account in your name only. Make your wife the primary beneficiary. Also make her a full agent on the account, so she has full authority to transact on it. Then you can also set up a secondary benefiary of who you would want it to go to if your wife pre-deceases you.
The net effect is virtually the same. Both of you have complete access to the account. If you die, she gets the account. If she dies, well it's already your account, no need to change anything. If both of you die at the same time, it clearly goes to the secondary beneficiary.

equivestor
Posts: 26
Joined: Mon Mar 17, 2014 6:33 pm

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by equivestor » Thu Dec 18, 2014 8:56 pm

I am VERY surprised that Vanguard does not require social security numbers for stated beneficiaries. Am I missing something?

toto238
Posts: 1891
Joined: Wed Feb 05, 2014 2:39 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by toto238 » Thu Dec 18, 2014 9:23 pm

equivestor wrote:I am VERY surprised that Vanguard does not require social security numbers for stated beneficiaries. Am I missing something?
They require Date of Birth. I don't think there's too many other people with my wife's name AND DOB and certainly none that could make any legal claim to my estate. They'd be laughed out of any court.

KyleAAA
Posts: 7574
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by KyleAAA » Thu Dec 18, 2014 9:53 pm

You're basically trying to force them to add a brand new feature to their system that doesn't currently exist (or was turned off for some business reason). The customer service rep obviously doesn't have the authority to promise you anything. What did you expect them to say, exactly? If the system doesn't work that way, it doesn't work that way. The rep can't do anything, not even file a problem report.

User avatar
celia
Posts: 9828
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by celia » Thu Dec 18, 2014 10:28 pm

equivestor wrote:I am VERY surprised that Vanguard does not require social security numbers for stated beneficiaries. Am I missing something?
It is unreasonable to record SSN for beneficiaries. Beneficiaries could be trusts, non-profits, or other non-person entities or foreign relatives. DH's company got a new employee benefits/payroll system that was full of bugs. One of them was that you HAD to give the SSN for your beneficiaries. Many employees were up in arms. We were one of those who wanted to list our trust as the beneficiary of the life insurance. [They fixed this within a few days.]

Would you want to give me your SSN so I could list you as a beneficiary? Would you trust me? Would you trust everyone who had access to this system?
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

Topic Author
markcoop
Posts: 1054
Joined: Fri Mar 02, 2007 8:36 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by markcoop » Thu Dec 18, 2014 10:40 pm

I have to say I'm amazed that some of you feel the way you do. On my beneficiary page, every account I have is listed except my VBS account. I see account numbers for every account. Again, except for the VBS account. However, when I call, I'm told the VBS is covered. And because of a system limitation it's just not displayed on the beneficiary page. This is not a brand new feature. My VBS does have a beneficiary. At least, that's what the rep tells me. I just can't find proof of it on the page that lists the accounts that have a beneficiary.

Toto - When you say "I see the VBS account number listed under the Prime Money Market sweep account as well." Is that on the beneficiary page? Because I do not see that on the beneficiary page. Or are you seeing that on the Balances and Holding page? I do see it there. But that just indicates it's linked to the VBS account. I have an online AmEx savings account that's linked to my local bank. The beneficiaries have no relationship in that case.
Mark

KyleAAA
Posts: 7574
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by KyleAAA » Thu Dec 18, 2014 10:51 pm

markcoop wrote:This is not a brand new feature. My VBS does have a beneficiary. At least, that's what the rep tells me. I just can't find proof of it on the page that lists the accounts that have a beneficiary.
It's a brand new feature on the website. Just because your VBS has a beneficiary doesn't mean the data is available to display on the website. You called with a question and the rep gave you an answer. I'm confused what else exactly you wanted the rep to do for you.

Topic Author
markcoop
Posts: 1054
Joined: Fri Mar 02, 2007 8:36 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by markcoop » Thu Dec 18, 2014 10:52 pm

ok...I made a mistake. I have multiple IRAs that have a MM in it. The first one listed is not the VBS linked one. However, in the second one listed I do see the MM account with the VBS account number. I guess I can argue that the rep should have been able to direct to me that, especially since he looked at it with me. But at least I can now agree that the info is there (still not so clear for my liking but there).

Sorry about the confusion.
Mark

Dyloot
Posts: 156
Joined: Mon Oct 14, 2013 8:04 am

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Dyloot » Thu Dec 18, 2014 11:05 pm

markcoop wrote:I have to say I'm amazed that some of you feel the way you do. On my beneficiary page, every account I have is listed except my VBS account. I see account numbers for every account. Again, except for the VBS account. However, when I call, I'm told the VBS is covered. And because of a system limitation it's just not displayed on the beneficiary page. This is not a brand new feature. My VBS does have a beneficiary. At least, that's what the rep tells me. I just can't find proof of it on the page that lists the accounts that have a beneficiary.

Toto - When you say "I see the VBS account number listed under the Prime Money Market sweep account as well." Is that on the beneficiary page? Because I do not see that on the beneficiary page. Or are you seeing that on the Balances and Holding page? I do see it there. But that just indicates it's linked to the VBS account. I have an online AmEx savings account that's linked to my local bank. The beneficiaries have no relationship in that case.
So.

1) You're likely right. It's a defect.
2) Software companies don't always fix defects even if they acknowledge they exist.
3) Even if it does get fixed, it may not be any time soon.
4) A phone rep likely has no connection to the web development team.

I could give you examples of Microsoft acknowledging a defect in a product, acknowledging that it's been reported previously, and acknowledging they can reproduce it. And then they told my company that it had been added to the list, and may be corrected in an upcoming patch.

Instead of fixing root cause, the phone agent is taught to identify a work-around. There are times when the customer doesn't accept the work-around. And then the phone agent is taught to sympathize and apologize.

And, sad to say, you're really not that big of a customer. The web development team may be working on fixes or enhancements tied to much bigger customers (companies, vendors, etc) or endeavors.

I'd recommend identifying the work-around you're comfortable with (like getting it sent to you in writing) and moving on to more important things in your life. :D

User avatar
Dale_G
Posts: 3269
Joined: Tue Feb 20, 2007 5:43 pm
Location: Central Florida - on the grown up side of 82

Re: Very uncomfortable phone call w/Vanguard about Beneficia

Post by Dale_G » Thu Dec 18, 2014 11:25 pm

I agree that when I look at my account it is not crystal clear that the money market sweep account beneficiaries are also applied to all holdings within the associated brokerage account.

If you look at the Transfer On Death beneficiary form for taxable accounts or the IRA Beneficiary Designation form it is clear that the brokerage account shares the same beneficiaries as the sweep account. I don't need anything more in writing than that.

TOD form: https://personal.vanguard.com/us/litera ... _mode=true
IRA form: https://personal.vanguard.com/us/ElfPDF ... 8962375121

Dale
Volatility is my friend

Post Reply