San Diego Estate Planning Lawyer Blog
One of the least appreciated benefits of having professional assistance with things like estate planning and long-term finances is having an extra set of eyes watching for irregularities. After all, the world is a busy place, and it is easy to get overwhelmed by confusing paperwork issues. Many people allow mail related to bank accounts, insurance, or retirement savings to pile up, assuming that most of the details are not time-sensitive.
But sometimes this casual neglect may lead to serious damage. That is especially true when outside support, like legal professionals, are not involved in these affairs to catch potential problems. The Retirement Blog recently shared one such story where a man lost thousands of dollars because of his failure to keep up-to-date on his retirement account transactions.
Bitter Divorce & Retirement
The man in this situation was in the midst of a divorce after an eleven year marriage. While the details of the spit were being worked out, his ex-spouse was living in the home that they shared. As happens in this situation, most of the man’s mail was delivered to that home. One of the letters that was received indicated that it needed to be opened by “Addressee Only.” The former spouse opened the letter and discovered new information about her former husband’s retirement account. It seems that the process for collecting from the account had changed. Online disbursements could now be made.
Lacking any concern for fairness, in about a four month period the soon-to-be-ex wife drained the entire retirement account. All told the man lost about $42,000. In fact, it was only months later that he ever learned about the situation, when he received a tax form from the retirement provider indicating that the money was taken out.
Out of Luck
Understandably angered by the situation, the man sought legal action against the provider claiming that he did not authorize the payments. However, it was too little too late, as a trial court and appellate court both found that the provider was not required to insure against wrongful actions by others. Essentially it was the man’s obligation to ensure that the plan providers had his correct address. His failure to notify them–a mistake that many in the same situation might make–was the cause of the problem.
While the court ruling is logical, it is easy to understand how this sort of error might affect others. After all, the man had not worked for his former employer for six years. In the midst of divorce it is not necessarily unusual that he did not immediately think to notify that former employer (or the company which manages their retirement plans) of his change of address.
The case is a reminder of the critical importance of having outside support for all of these issues. From financial planners to estate planning attorneys, much comfort can be gained by knowing that there are professionals assisting with all of these issues on your behalf. Many local community members have suffered as a result of trying to go it alone on these matters.
Do not make the same mistake. For professionals help on estate planning issues in San Diego, please contact the attorney at the Law Office of Scott Soady today.