DEAR BRUCE: My husband recently passed, and I was shocked to find that in error he named our trust as the beneficiary. I know he never intended that, as we had always heard you should make a person your beneficiary and not the trust for tax purposes.
The rollover is sizable -- more than $600,000. In either case the funds are mine, but one is with tax consequences and the other is not.
We have not been with this financial firm very long. To my dismay, no one questioned the beneficiary designation. Do you know of any way we can reverse this error? -- Reader in California
DEAR READER: I can appreciate how shocked you were when you learned after your husband's death that your new financial adviser may have made a substantial error. If that is true and if it can be documented, it's possible the errors-and-omissions insurance he hopefully carries would cover your tax loss.
If the error is not his but rather your late husband's, I seriously doubt there is anything you can do, since the "only" damage here was the additional tax. The fact that you remember retrospectively that the designation should have been handled differently is not an excuse for your contribution to the error.
The first thing to determine, with a proper tax attorney or CPA, is whether this error can be overturned. The next thing is to determine who made the mistake. Often, things of this nature work out.
DEAR BRUCE: I am concerned that the amount of money in my bank account, $325,000, is over the maximum amount the government will protect you for in the event the bank goes under.
After thinking about this for some time, I went to the bank to discuss it. Their suggestion was to put my children's names on the account, which would divvy that amount among the three of us.
Continue reading this story on the...