What Your Teller Can’t Tell You
By Lee Phillips
I recently made an IRA transfer from one trustee to another one. I was searching for an extra 0.1 percent return. I might just say that interest rates banks are paying aren’t good. (The real way I feel about it isn’t best put in writing, because it would get this blog rated as adult only.) At any rate, when I got the little girl at the new accounts desk to finally help me, she had no clue. I had to walk her through it step by step. In her words, “We don’t do a lot of IRA transfers.”
The real sticking point came with the naming of the contingent beneficiaries. You are actually the primary beneficiary of your IRA. Your advisor doesn’t know what an IRA is. It is actually a 408 trust. There has to be an IRS approved trustee. (IRA trustees have to pass an IQ test, and if they score above 60 they aren’t qualified to be an IRS approved trustee.) Then there is a beneficiary – You. Can you see how it could be a trust? Trustees, beneficiaries, all the language sounds like a trust, but nobody ever thinks of IRAs as trusts.