N.B. To clarify, as far as I can tell there are no standard IRS-designated IRA transfer forms, and there are numerous sample forms posted online from various fund companies and banks. However, many banks use at least two types of common IRA transfer forms from Bankers Systems, the company that supplies the also-common bank account customer agreement signature forms and other bank paper forms. Those are the IRA transfer forms my bank used, which should have been familiar to Vanguard.... These forms are not standardized, so Vanguard's people were somehow confused by the form. ...
Confusion could arise due to the several types of IRA, as well as the option on the forms of what they call a "mid-air" IRA conversion. The form that a particular custodian should use may be different depending on the type of IRA - this is especially important for an inherited IRA. Also, some of the forms like those from Bankers Systems use the term "beneficiary IRA" for an inherited IRA. If the employee receiving the transfer is not familiar with all of these IRA details (as they should be), I can see how they might get confused and delay the transfer, or enter the transaction designation incorrectly as they did in my case (which is a serious tax problem). I would hope only FINRA CIP reps are handling IRA transfers at Vanguard, but perhaps not these days. Again, that's why including a clear letter of instruction is so important.
Also, a couple more tips on IRA transfers:
To avoid possible delays, carefully review the transfer form yourself before the new custodian mails it to make sure everything is correct. There is a lot of required information on the form including your long Vanguard fund account number, which obviously must be correct. For an inherited IRA, they will need information on the decedent (SSN, date of birth, date of death, etc.). If you are dealing with a branch bank or local mutual fund or broker office, make sure that their mailing address is on the form rather than the main address of the bank or firm. Otherwise there will be delay (and loss of interest) since the FOB check will have to be physically forwarded to the branch or office, since you have to sign the new IRA account forms there, and they will have to endorse the FBO check in your presence.
Statistics: Posted by Farm boy — Wed Oct 16, 2024 9:49 pm — Replies 1878 — Views 226327