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.