This is another case about dotting t's and crossing i's. And, it's another case that didn't happen here in Florida. But it does involve probate, and it teaches a valuable lesson.

Almost 20 years ago, a learned attorney with years of experience under his belt opened an IRA. He named his wife as beneficiary.

The couple divorced a few years later, and it was not a hassle-free split. From reports, it looks as if the couple barely spoke after the thing was finally over with.

He proceeded to remove his wife's name from his accounts. Where she was named beneficiary, he designated his estate in her place. He'd removed his wife as beneficiary of his profit sharing plan, and he rolled that plan into the IRA he'd set up earlier. The combined accounts were worth four times what the IRA alone had been.

He remarried.

And he died suddenly.

His widow was the executor of his estate, and she secured a court order that required all of the financial institutions, brokerage houses and so on that had her husband's accounts to turn them over to the estate. The IRA, however, was turned over to her predecessor, the man's first wife.

As meticulous as he was, he had failed to replace her as beneficiary. Or had he? Perhaps the financial institution had failed to make the change.

The estate filed a FINRA arbitration claim against the institutions that held the IRA. The estate said the holder of the IRA had acted negligently and that it breached its fiduciary duty to the deceased by not advising him to designate his second wife as beneficiary. (FINRA, the Financial Industry Regulatory Authority, is the country's largest independent regulator of securities firms.)

We'll let you know how it came out in our next post.

Source: Insurance News Net, "The Lawyer, the Stockbroker, the Ex-Wife, and the Widow," Aug. 02, 2011