# Should banks and brokers be allowed to require social security numbers to list beneficiaries?



## WhatInThe (Aug 31, 2020)

Should banks and brokers be allowed to require  a social security number just to list someone as a beneficiary. Some they'll give it right away others are leary yet I'd like to see them get something. To me it's awkward asking a potential beneficiary for their soc if not a child. It's an awkward conversation period. I'd rather talk about what might finish me off than post mortem financial matters/personal information.

Also with some you list or predesignate a beneficiary on a single form online while some require a notorized signed statement for each individual and organization you'll be giving you money/stocks to.

Also many of these same banks and brokers want tax identification numbers  of charities one might give to. There are websites for those since they're public organizations.

With the right bank/broker pre designating beneficiaries is easier and more efficient than a will along with confidential.


----------



## Marie5656 (Aug 31, 2020)

Yes. For proper identification. Example. I have my niece, Julie, as my beneficiary on my IRA. She has a cousin with the same first , middle and last name. Plus, our Italian surname is not uncommon there. How else to determine it goes to correct person?
If you care enough for a person to designate them, then should not be an issues to ask for social.  Until such a time a better Means of ID comes along, this is it.


----------



## Aunt Bea (Aug 31, 2020)

It's definitely an awkward conversation but I understand it and see the need for it.

For me, the thing that makes it awkward is explaining the reason and setting a person's expectations over something that may never happen.  What I have today I may not have tomorrow, etc...

I was lucky enough to get the Social Security numbers I needed years ago by helping people with their income tax returns.


----------



## Lizzie00 (Aug 31, 2020)

Aunt Bea said:


> For me, the thing that makes it awkward is explaining the reason and setting a person's expectations over something that may never happen.  What I have today I may not have tomorrow, etc...



Excellent point.

Also something to consider:     there’s a reason that SOCIAL SECURITY NUMBERS HAVE BEEN REMOVED from, for example, Medicare cards. And to my way of thinking, asking my beneficiary to give me their SSN and then me passing it on to ANYONE seems less than ideal since there’s a risk factor every single time an SSN is put out there anywhere.

I can see tho that the beneficiary SSN requirement might be a significant shortcut for financial institutions.

To which i say:     Pffffffftttttt!!!


----------



## OneEyedDiva (Aug 31, 2020)

In answer to the OP: Some brokerages don't require the SS to list someone but I wouldn't be surprised if the SS is required to get the inheritance. With the number of people who share the same names, I'm sure it's considered an extra measure of protection and verification. There are probably thousands of people with the same name as my late husband. And my goodness...don't be a John Smith!


----------



## mathjak107 (Sep 1, 2020)

some states have not estate taxes but inheritance taxes ... depending on your relationship to the  beneficiary there could be taxes so  it may get reported when a pod or tod account gets paid .

6 states  have possible  inheritance taxes     Nebraska, Iowa, Kentucky, Pennsylvania, New Jersey, and Maryland. thosde inheritance taxes are paid by the receiver of the money .

don't confuse estate taxes with inheritance taxes . they are quite different


----------



## Marie5656 (Sep 1, 2020)

@Lizzie00  You make an excellent point. As I mentioned in my first response, it is a way to assure the correct person gets benefits. But our Social in wrong hands can be dangerous.

That being said, I wonder how else it can be done. If one of us had, say $20,000 in our checking account, and put in our will that the money goes to Sally from next door, I do not think I need to give Sally's social.   But I needed to to leave my IRA to my niece.

Makes little sense


----------



## mathjak107 (Sep 1, 2020)

Marie5656 said:


> @Lizzie00  You make an excellent point. As I mentioned in my first response, it is a way to assure the correct person gets benefits. But our Social in wrong hands can be dangerous.
> 
> That being said, I wonder how else it can be done. If one of us had, say $20,000 in our checking account, and put in our will that the money goes to Sally from next door, I do not think I need to give Sally's social.   But I needed to to leave my IRA to my niece.
> 
> Makes little sense


anything going out via  your will gets paid to the estate not directly to heirs ... the money just becomes part of your estate and it is up to the executor to distribute it as per your will . it does not involve a bank or brokerage if there are no beneficiaries listed.

an ira going out gets reported as a distribution to the irs by the bank or brokerage . the heir gets a 1099r in their ss number


----------



## Lizzie00 (Sep 1, 2020)

Marie5656 said:


> @Lizzie00  You make an excellent point. As I mentioned in my first response, it is a way to assure the correct person gets benefits. But our Social in wrong hands can be dangerous.
> 
> That being said, I wonder how else it can be done. If one of us had, say $20,000 in our checking account, and put in our will that the money goes to Sally from next door, I do not think I need to give Sally's social.   But I needed to to leave my IRA to my niece.
> 
> Makes little sense


  Oh i hear you, Marie. And note i didn’t say i haven’t done it myself lol but it sure burned my buns to be put in a position to have to solicit & then hand out another’s SSN in order to designate a beneficiary. And like you said, some places require the beneficiary SSN and some don’t.   Hmmmmm....makes me wonder why that is.

 Just a for instance, my 401K equivalent does NOT require a beneficiary SSN....but for each beneficiary they do require a full name, address, date of birth OR social security number. So clearly they’re able to take care of biz without the bene SSN (even tho they’ll def need to get it from the bene on the other end when it’s payout time). 

  Up until a very few years ago i was never asked to provide a bene SSN for anything, ever. Given that i’m older than mud, that was a lotttt of years where a bene SSN was NOT required for the kind of thing that we’re talking about here.  And again, it’s not an across the board requirement even today. Still wondering why that is.

  Okay/okay.....rant over.


----------



## mathjak107 (Sep 1, 2020)

Lizzie00 said:


> Oh i hear you, Marie. And note i didn’t say i haven’t done it myself lol but it sure burned my buns to be put in a position to have to solicit & then hand out another’s SSN in order to designate a beneficiary. And like you said, some places require the beneficiary SSN and some don’t.   Hmmmmm....makes me wonder why that is.
> 
> Just a for instance, my 401K equivalent does NOT require a beneficiary SSN....but for each beneficiary they do require a full name, address, date of birth OR social security number. So clearly they’re able to take care of biz without the bene SSN (even tho they’ll def need to get it from the bene on the other end when it’s payout time).
> 
> ...


They will need the ss number before the heirs can actually get it


----------



## Lizzie00 (Sep 1, 2020)

mathjak107 said:


> They will need the ss number before the heirs can actually get it


Exactly! It’ll be up to the financial institution to solicit the ssn at payout time instead of being my job now.


----------



## Butterfly (Sep 1, 2020)

Neither of my financial institutions have requested SS numbers for beneficiaries.  Mine are set up to be "transfer on death" accounts.


----------

