1035 Issues

[Norwayguy]

Great point.

You can also visit many companies websites to acquire their proprietary 1035 paperwork.

You can always call the ceding company and ask them to fax or email their paperwork to you.

Please be advised that you must be clever while having this conversation........

I always try to have a 3 way call with the client and surrendering company before heading out to an appointment like this to find out what the company is going to require and to get paperwork emailed or faxed....I've recently run across a company that faxed me paperwork required it be signature guranteed and then rejected the paperwork because they require their paperwork to be original and because they faxed it to me it was no longer original...interesteing the csr didn't mention that one up front.

 

[Newby]

YEs I usaully I make copies of what my customers recieve so I have reference.
Thats a good idea about calling but so many fmo/imo's have online form archive basicly available to the world so 9 time out of 10 I can get it but sometime it just doesnt work, but what I just ran into was Great American did not except the form I sent in early they waited for the one they sent out to come back (i geuss I sent it a little to early) which was the same . They are always a pain to get money away from.

Does the surrender of the Great American policy even create a taxable event?
They can just cash surrender the policy if they aren't going to have to pay taxes anyway. Just do a replacement form and it will be a lot quicker.

 

[HarryRenard]

It was an annuity I was 1035ing so yes it was a taxable situation, it was a National Health annuity which is now great american.

Norway Guy- If they faxed a form to you and then you have it signed and MAIL it back that is an Original. Signatures are original not forms. But having said that these companies tend to say and do a lot when they dont want to transfer $$$$$.

 

[padthaiforlunch]

lol. sucky, but funny. Thanks for the story, from now on I'll ask for pdf's.

I always try to have a 3 way call with the client and surrendering company before heading out to an appointment like this to find out what the company is going to require and to get paperwork emailed or faxed....I've recently run across a company that faxed me paperwork required it be signature guranteed and then rejected the paperwork because they require their paperwork to be original and because they faxed it to me it was no longer original...interesteing the csr didn't mention that one up front.

 

[Norwayguy]

It was an annuity I was 1035ing so yes it was a taxable situation, it was a National Health annuity which is now great american.

Norway Guy- If they faxed a form to you and then you have it signed and MAIL it back that is an Original. Signatures are original not forms. But having said that these companies tend to say and do a lot when they dont want to transfer $$$$$.

Equitable at least for a time would fax you forms but they would refuse to accept the completed form because they required you to use their original form which was green in color it was a joke because they would fax or email the form to you all day long and then refuse to accept it because it was not their original form....

 

[SmartMoney]

The worst part is, the companies can drag their feet. The stipulation is they have to transfer the money within 180 days after receiving the transfer request.

Still, these companies that hold onto the money for 3 months is downright criminal. Especially when the client may be paying a surrender charge to them on top of that wait.

 

[InsureGuy5]

One wonder if it will take some litigation to get insurance companies moving on 1035 exchanges - especially those that involve variable accounts. Just a couple of days can cause massive losses.

 

[HarryRenard]

If I am moving a variable (annuity) account or even MF's (brokerage accounts) I have always called with the customer to move the money to a money market or a stable account to preserve the account from any additional losses.
But I almost always find variable accounts to transfer a little quicker as long as the paperwork is clean (which is a given).

 

[scagnt83]

If I am moving a variable (annuity) account or even MF's (brokerage accounts) I have always called with the customer to move the money to a money market or a stable account to preserve the account from any additional losses.
But I almost always find variable accounts to transfer a little quicker as long as the paperwork is clean (which is a given).

Yes, I have always found that variable products transfer a bit quicker. And I have started doing the MM thing lately too.

Just an update on the original post. After my client faxed in a letter demanding them to transfer the funds, they had it done in 3 business days. I think that if the client directly requests that it me moved immediately, by law they have to act in an efficient and timely manner...part of the whole fiduciary responsibility thing...
I also learned that the managing partner of the office the business was written at has the say to sit on the money to try to save the business....
For now on my 1035s will have a singed letter by the client stating that they want the conservation effort waived.