• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Agent error creates complicated problem.

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

TNCPUPZlazy

New member
What is the name of your state?Montana
I have a complicated problem with my mother’s annuity. An error made by an agent has left her children/estate unable to claim their portion of the money. My mother always referred to it as my grandmother’s annuity and later the “trust” or “contract”, so I didn’t know the whole story until we tried to claim our portion. The players are A= my mother the annuitant, B=her brother, C=my cousin, D=my dad, E=me and my siblings (the estate), F=the selling agent (a close family friend and former pastor) and G=my grandmother.
In 1995 G returned to Montana after my grandfather passed. In 1996 she purchased and was owner of an annuity (on A’s life) from F to avoid an estate. F’s first mistake is obvious on it, he listed A as a beneficiary on her own life. The other beneficiary was B. G withdrew money as needed and passed in 2001, leaving A as the sole owner. In 2006, A told me (by phone, I live in another state) she asked F if he could set it up similar to a trust that D had (for B and her). D’s trust was split 50/50 with my aunt and had separate beneficiaries. A and B also requested that B’s portion go directly to C to bypass his estate and her mother (G’s wish was for any unused portion to go to all the grandchildren and none was to go to C’s mother). F said he thought he could, so he rolled it over in to a new one. There is no reason why the older policy couldn’t have been assigned new owners and beneficiaries. The difference appears to be that the current one can be a joint annuity, but B was not a joint annuitant, just a joint owner. F typed over the contingent beneficiary line – “Primary beneficiary of B, C daughter of B”. It makes no sense unless she was supposed to get B’s half upon his death. A chose D as her primary (it was her default on everything). F tried to write up the policy in a way it wasn’t designed to do. Someone at the brokerage caught it and sent a “clarification” memo that A and F signed. It said “Friends, please verify that the following is true. The beneficiaries are D, husband of A and C, daughter of B. 50/50.” The other mistake F made was in allowing A to list D as her primary beneficiary. In 2006 (as well as 1996) we knew that D would predecease her. He survived a massive stroke in 1991 and had continual, serious complications. F knew this. He had an ethical and fiduciary responsibility to point out the clause that states beneficiary status does not pass to the estate upon the death of a beneficiary, but to the other beneficiaries. If he knew about the clause and knew that the policy wasn’t split, he should have advised her to put E as her beneficiary. Because he was perhaps well meaning but not knowledgeable about the product, we are unable to claim our share of our own mother’s insurance. I’m sure if F knew what was happening, he would be heartsick. He moved out of state a short time after that, and passed away in 2015. D passed in 2011. B was diagnosed with cancer in 2010. In 2012 and 2013 A went out of state to care for B and they started pulling money out for him. She told me each time she did this, and also when she pulled money out for herself. When B passed in 2016, A told me she requested forms to claim C’s share for her. A was diagnosed with cancer a few months later and the subject of C’s share never came up again and I never found the original policy until after she passed in May, 2019. I was counting on the money to pay her bills, taxes, and save the house.
C has complications of her own. For numerous reasons she cannot have a lot of money in her possession. She wants to be fair, but she cannot claim the money and give part of it away. She cannot claim all of the money, and she cannot formally decline it. At this point it’s best that she just ignore it.
I have tried to contact the brokerage that F sold it through. They won’t return emails, and the operator told me they only provide training to the agents about the products and they don’t talk to clients. I hold F and the brokerage firm primarily responsible. They didn’t train and advise him and they knew something was off about the contract, but didn’t provide proper follow up. Other than file complaints, write bad reviews, and be a pain to them, is there anything that can be done? Who is held accountable in a case like this?
Thanks for your help.
 


BuyLowSellHigh

Active Member
I'm sorry for your loss and it must be hard learning this information during a difficult time. It sounds like you were never listed as a beneficiary and therefore are not going to received any proceeds. The annuity company is obligated to follow the beneficiaries as designated in the contract. At any point after 2006 were any of the primary or contingent beneficiaries updated? Especially after your dad passed in 2011 and before your mom passed in 2019 were any of the beneficiaries updated? The policy owner is accountable for making sure that beneficiary information is kept updated.
 

adjusterjack

Senior Member
F’s first mistake is obvious on it, he listed A as a beneficiary on her own life.
Had somebody actually read the policy when it was delivered, the error would have been discovered and easily corrected.

Lesson to anybody reading this: Read your insurance policies, contracts, and any other documents that are of any value to you. If you don't understand them, get help.
 

TNCPUPZlazy

New member
I'm sorry for your loss and it must be hard learning this information during a difficult time. It sounds like you were never listed as a beneficiary and therefore are not going to received any proceeds. The annuity company is obligated to follow the beneficiaries as designated in the contract. At any point after 2006 were any of the primary or contingent beneficiaries updated? Especially after your dad passed in 2011 and before your mom passed in 2019 were any of the beneficiaries updated? The policy owner is accountable for making sure that beneficiary information is kept updated.
Thank you. No, we weren't listed. There was only 1 short line on the contract to list a primary (not even a percentage box), and below it (not even double spaced) only one short line to enter a contingent. The names and titles didn't even fit. She submitted my uncle's death certificate and had him removed as owner (so she could use it without his signature), and they admitted that she requested beneficiary forms (they didn't say whether they sent claim or change forms), but said it was not sent back. We've looked for it. If they sent forms she wasn't expecting, she was probably confused. I think she believed it was all set and that "her half" would revert to her estate. It and her other financials were among the things we were going to work on when they sent her home on hospice. She had a stroke 5 days after getting home, before my FML was even approved.
 

TNCPUPZlazy

New member
Had somebody actually read the policy when it was delivered, the error would have been discovered and easily corrected.

Lesson to anybody reading this: Read your insurance policies, contracts, and any other documents that are of any value to you. If you don't understand them, get help.
Yes. After reading some of the other questions, most of the problems would have been prevented if the insured had listed "my estate". The other lesson is review them every few years.
 

Dandy Don

Senior Member
Sorry that this did not have a good outcome for you.

The broker only sells the products for the annuity company or insurance company. It is the actual company that provided the annuity and/or insurance policy that you need to be contacting to ask about the annuity or policy provisions.

If you have not already done so, ask for a copy of the annuity contract so you can see how it reads. Many times there are additional rules and regulations (that the company goes by) that a customer can only get more information about by talking to a customer service rep., and those additional rules/stipulations may not be readily available to be seen in the contract. In an annuity contract I am familiar with, payments can be made only to a designated beneficiary and once the stipulated payments are made during the beneficiary's life and when the beneficiary dies, the contract ends and no further payments can be made to anybody under that annuity contract.
 
Last edited:

TNCPUPZlazy

New member
Sorry that this did not have a good outcome for you.

The broker only sells the products for the annuity company or insurance company. It is the actual company that provided the annuity and/or insurance policy that you need to be contacting to ask about the annuity or policy provisions.

If you have not already done so, ask for a copy of the annuity contract so you can see how it reads. Many times there are additional rules and regulations (that the company goes by) that a customer can only get more information about by talking to a customer service rep., and those additional rules/stipulations may not be readily available to be seen in the contract. In an annuity contract I am familiar with, payments can be made only to a designated beneficiary and once the stipulated payments are made during the beneficiary's life and when the beneficiary dies, the contract ends and no further payments can be made to anybody under that annuity contract.
Thanks, Don. My cousin cannot claim the money. The way it ended up was the worst possible outcome for everyone involved. Had it been the other way around, we could have given her portion to her in a way she could use it. They told me (and it's in the contract) that if it's not claimed by the end of next year, they will turn the funds over to the state. It looks like it will then be 3-5 years before they declare it abandoned. I think at that time they will look for another owner.
I don't know if there is some way to then petition the state to accelerate that grace period or not.
 

Sponsored Ad

Top