Other Matters

IRA Beneficiary Designation

Anton v. Merrill Lynch, 36 S.W.3d 251 (Tex. App.—Austin 2001, pet. denied).


Husband named Wife as the beneficiary of his IRA. Shortly before his death, he removed her as the beneficiary and added his children. Wife claims that Merrill Lynch breached a fiduciary duty by changing the beneficiary without giving her notice. The trial court rendered summary judgment against Wife.

The appellate court affirmed. The court rejected a variety of Wife’s claims. The fact that the change in beneficiary form did not have all the requested information (e.g., social security numbers of Husband’s children) was deemed irrelevant because there was no requirement that all the blanks on the change in beneficiary form be completed. The form met the mandatory requirements of being in writing, signed, dated, and received by Merrill Lynch. In addition, Merrill Lynch could waive compliance with its own rules.

The court also indicated that Merrill Lynch had no duty to inform Wife of the change even though Wife also employed Merrill Lynch as her financial consultant. It would be untenable to impose a duty on a financial consultant to inform designated beneficiaries when designations change, withdrawals made, or value of investments fluctuate. Merrill Lynch owed Wife no duty with respect to Husband’s account.

Moral: Married couples need to understand that even if each partner uses the same financial consultant that changes may occur to the account of one partner without the knowledge of the other.