Security of retirement/savings accounts

[R. Debbing]

What is the name of your state? What is the name of your state? Delaware

My brother was divorced years ago, and says he won the child support court case. He lives in Delaware. His X continues to go after him for child support, although the 'child' is 28 or 29 now and living independently elsewhere in Massachusetts.

The x-wife has somehow has been able to empty several savings and retirement accounts my brother has in various locations. The most recent theft was from a retirement account my brother had with a tax preparation company. The X wife somehow got the entire contents, $10,000.00, and my brother and his current wife only found out later when they got the monthly statement. Worst still, the 'institution/company' is insisting my brother pay the tax on the money his X stold!

Question - what responsibility do banks and savings institutions, etc., have to their depositors? And what kind of papework/situation/story would allow institutions/companies housing money/retirement accounts for depositors to legally pay the contents of those accounts to individuals whose name is not on the account? In short, how can the X wife legally be draining accounts she has no actual legal entitlement to? Finally, is there any kind of account that is secure enough to prevent this from taking place? She is somehow able to track my brother's accounts - possibly through his social security number. And when she finds them, she empties them out. I don't understand how. Please enlighten me how.

 

[ALawyer]

Might she have been entitled to unpaid alimony or back child support? If so, and she has a valid judgment and/or court order permitting attachment or paying over of the proceeds, she is within her rights, and your brother is a deadbeat dad. If not she is a thief (and perhaps using forged documents, a forger) and her crimes should be reported to the criminal authorities.

Banks and brokers and custodians don't and can't just pay over money absent legal process. If they did they are liable to your brother civilly also.

 

[R. Debbing]

Greedy X

Delaware

I don't have all the facts. I believe my brother paid support, and I know for a fact when his daughter from his first marriage graduated from high school, he bought and delivered a bran new car to her, but neither she or her mother even had the courtesy to talk to him, or thank him.

I also know that when she graduated his X contacted me, 'fishing' for a graduation present, although there had been no previous correspondence or contact of any kind previously. And that takes nerve!

My brother is not a deadbeat dad - quite the contrary. He grew up working from dawn to dusk, 7 days a week on a dairy farm. He has seen his share of hardship and personal loss, including the loss of his home and car and first business to a fire. But through his dedication, determination and hard work he has built up what is now a thriving second business.

The X wife long ago remarried, and her family has money through businesses of their own. This isn't and never was 'need' - it's greed. And vindictiveness.

I believe part of the problem is differences in Massachusetts and Delaware state laws. In addition, the retirement account she just leeched dry was in Michigan and was through H & R Block. Those are two other factors, as Michigan may had yet another set of rules, and H & R Block isn't a bank, so probably isn't held to the same laws and mandates banks and financial institutions are.

As I mentioned previously, the daugher is now 28 or 29, living independently, working, etc. And my brother has a wife and two kids of his own he's trying to raise and put through college, etc.

But the X won't relent. My brother has consulted a lawyer who feels he has a very good case, but that it will have to go higher up in the court system due to conflicts in state laws, etc.

Meanwhile, my brother has shut down all his accounts to avoid this happening again.

And yes, I do believe fraud is involved. But my concern is also with fuidiciary responsibility, and how someone whose name is not on the account can drain it. Again, I'm wondering just what kind of documentation the X presented that gained her entitlement to money that is not hers.

And in line with that, I believe that H & R Block simply took the X's word without doing any kind of legal verification, and that also concerns me. I know for a fact her father has a very close friend who is an attorney. I also know there has been some speculation of mafia involvement.

Bottom line - I'm concerned this kind of thing goes on, and am frankly suprised that savings and retirement accounts obviously are not as secure as I believed them to be. And in these days of security concerns, that is something everyone needs to be aware of.

 

[Jeter]

As a former bank officer I can tell you that banks and financial institutions secure accounts by requiring confidential information and holding a signature card on file. Unfortunately there are loopholes that could allow someone to drain an account. Your brother's ex is most likely privy to all necessary account info as well as pertanant dates. She could pick up withdrawl paperwork from the bank very easily. They are generic bank documents. Chances are she has a copy of his signature. As long as it matches the signature card at the bank (which it probably does) and the information is consistent, she could forge the document.

Many security and retirement account withdrawls require nothing more than a form with the proper information and a signature. You need not show your face or speak to anyone on the phone. The legal process in respect to withdrawls includes disclosures on the documentation informing the applicant that forgery in any way is a criminal offense. I worked in NYC in a $1 billion dollar per year branch and it was not uncommon during tax time to have a hundred retirement documents per week be processed for either withdrawl or deposit. The documents were the same and required the same confidential info.

Jeter