Today the Appeals Court ruled that a widow can proceed with her lawsuit seeking to claim her deceased husband’s IRA account with Charles Swab.
The husband created the account in the early 1990s, naming his parents as beneficiaries and his sister as the contingent beneficiary.
At the time, the man was unmarried.
After marrying, he allegedly attempted to name his wife as sole beneficiary.
To do this, according to court documents, he needed to submit a hardcopy “Change of Beneficiary Form” to Charles Swab.
Again citing court documents, the wife claims that the husband submitted the form electronically instead of mailing in a printed copy.
When the man died in 2019, Charles Swab did not have the “Change of Beneficiary Form.”
The company initially sent the IRA funds to the man’s sister (his parents being deceased) and then took back the funds within a few weeks.
The company then filed a lawsuit seeking clarification in superior court.
The wife cites two company records which suggest that the husband did in fact name her as his beneficiary.
First, there was an entry in Charles Swab’s Client Central System listing the woman as the account’s beneficiary.
Second, there was a note in the company’s “MARS system” which read “SUBMITTED CHG OF BENEFICIARY ON IRA ACCT SET FORM TO BE PROCESSED.”
The wife’s claims were dismissed in superior court via summary judgment.
Her attorneys appealed and today the Appeals Court reversed the lower court’s decision.
The question before us is if a genuine factual dispute exists on the issue of whether [the husband] “substantially complied” with the requirements of his agreement with Schwab to change the beneficiary of his IRA to [his wife].
The justices conclude that a genuine dispute does indeed exist:
Schwab’s computer system contains one record listing [the wife] as the beneficiary, and another record noting the submission of a “CH[AN]G[E] OF BENEFICIARY ON IRA ACCT” and acknowledging the existence of a “FORM.” And both parties agree that any change to a beneficiary could have only been made by a Schwab employee…We conclude that the judge’s determination that there was “no evidence that would demonstrate that [the husband] substantially complied with the terms of the IRA agreement to name [his wife] as beneficiary” was erroneous.
The full text of the slip opinion is attached below.