Q: After my father passed my sister took charge of his savings accounts and things went missing or weren't accounted for. For example, I found notations in a journal from 1994 about an IRA, but there was no sign of this account after my father died. There were no required minimum distributions being deposited into his other accounts, so I'm assuming it was a Roth IRA. Any advice on how to track this account down?
A: Unfortunately, this type of situation is all too common - both incomplete records left behind when a person dies, and mistrust between siblings about their involvement in their parents' finances. At this point, there would only be two possible leads to pursue to find old IRA accounts, neither of which has a huge possibility of success. However, this is also an opportunity to make some more general comments about preparing for the transition of retirement assets into an estate.
How to track down an old IRA account
Your thought about the Roth IRA is understandable because these accounts do not mandate required minimum distributions while traditional IRAs do. However, since the reference to the account is from 1994, it cannot be a Roth IRA. These did not come into existence until 1997. Assuming your father had reached the age where he was required to make minimum distributions from a traditional IRA, it is entirely possible that deposits were made into an account you are not aware of, given that you believe there is information missing from your father's records.
Ask for bank records
As for tracking this old IRA account down, one possibility would be to ask the bank specifically to look at their account transfer records. When IRA accounts are moved, they are typically transitioned directly into a new IRA at another institution in order to avoid tax consequences. The bank may still have a record of this kind of institution-to-institution transfer. Though if this happened all the way back in the 1990s, the current data system might not have records dating back that far.
Look at tax forms
Another possibility would be to look at your father's tax records. IRA trustees are required to provide the owner of an IRA and the Internal Revenue Service with an annual Form 5498 that includes the market value of the IRA and amounts of any contributions and required minimum distributions that took place during the year. This form also includes the trustee name and the account number, so if you can find this form among your father's tax records, it might help you track down the old IRA account.
Safeguard the transition of retirement assets to heirs
As some final notes for yourself and others when it comes to planning for your own estates:
- Have an independent executor. It helps to have an independent executor (i.e., someone who is not a beneficiary of the will) and to periodically give that executor an updated list of account information.
- Families should communicate about financial affairs as a group. That way, everyone is privy to the same information, so there is less possibility of things being done in secret.