No. of Recommendations: 1
Dear Fidelity: 24 Sept 2000

My wife and I have had an IRA with Fidelity since the early 1980's.

Today's edition (24 Sep 00) of The Dallas Morning News (page 6H) includes an article by Kathy Kristof highlighting potential legal problems one's spouse can encounter related to managing their Fidelity IRA. The problem arises if IRA owner (usually the husband) becomes incapacitated (but not dead) and his wife may not be able to access and manage their IRA investment portfolio without resort to extensive (and expensive) legal machinations. In effect, their IRA account would become frozen in the world of 'legal limbo' with severely restricted access and high legal fees. According to the article, several of Fidelity's competitors allow IRA account owners to provide the institution with a legally binding durable power of attorney so that the account owner's spouse can manage their IRA account(s) should the account owner become incapacitated.

The article describes a couple with circumstances similar to my wife and I. In both cases, we are partners in all things financial (even though account number is in my name) in a community property state (Texas) and each of us has a durable power of attorney for the other. However, according to this article, Fidelity will not accept my spouse's power of attorney to manage our IRA portfolio should I become incapacitated without extensive legal machinations. If this is true, it is time for us to find another financial institution for our investments.

I have been assured (verbally) by Fidelity customer service that my account is set up so that my wife can have access to our account should I die. However, I neglected to ask specifically what would happen to her access should I become incapacitated by a long-term illness such as Alzheimer's.

What do I expect from Fidelity? We have Rollover IRA, Traditional IRA, and Joint Taxable brokerage accounts with Fidelity. I want to know (in writing) how Fidelity will allow my wife unrestricted access to manage each of our accounts. If we need to file a spousal power of attorney for each account, please provide me with the forms.

I look forward to hearing from you.


NOTE: I am an active contributor to online investment bulletin boards maintained by The Motley Fool and Yahoo. I have posted this letter on both boards to ensure that this potential legal limbo is broadcast to as many investors, Fidelity and otherwise, as possible. This is an issue which is much too important for individual investors to allow to continue.

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The situation you described is not unique to Fidelity. I have encountered the same situation with regard to my parents' IRA's with First Union Bank. Mom has alzheimer's and is in a nursing home. Dad has been in and out of the hospital several times recently. I hold Power of Attorney for both of them. I was able to arrange for access to their checking and money market accounts at First Union by supplying a copy of the POA's. However, for the IRA's the bank requires their own special POA form to be signed by mom and day. I am traveling to Pennslvania this weekend (where they live) to get these forms signed.

I should also add that arrangements with Vanguard, Lord Abbett and Manulife on other accounts of my parents were also difficult. All three eventually accepted the original POA's and Summary of Trust documents once I provided copies and letters of instructions with signature guarentees. The whole process of arranging to handle my parents finances took many weeks and many letters and phone calls.

You are wise to get these questions addressed before the need arises. Good luck.

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You should mail this inquiry to Fidelity in Boston via "certified return receipt requested" mail to begin resolving your urgent and very important problem.

Your message is not clear about how the accounts are titled. You said "even though account number is in my name." What does that mean, exactly? It sounds as if You are the sole owner.

Of course your wife would have access to the account on your death. She will own it by inheritance.

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I am the subject of the referenced article written by Kathy Kristof. I would recommend that any answers that Fidelity gives you that you insist it be in writing.
During my several weeks of attempting to get to the bottom of this issue with my IRA I was told verbally and via email that Fidelity would accept my Durable POA from my wife if I were to become incapacitated. Other Fidelity representatives would tell me POAs are not accepted.

One lady at Fidelity told me that if I were to become incapacitated my wife could present a "certified" POA for making a withdrawal and later if she needed to make another withdrawal all she had to do was have the POA "re-certified". I asked her for her answer in writing and when I received Fidelity's letter I was told that they could not accept a POA! When I received this letter I contacted 7 other investment firms and found that all had provisions to handle the case where the IRA investor becomes incapacitated; however, some had their own forms and would not accept the investor's POA.

I then sent a letter with my findings to Fidelity's Chief Executive Officer. I received a letter signed by his assistant in which he verified that Fidelity did not accept POAs.

If I can be of further help, you can contact me via email at

Good luck.
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Yesterday (10/10/00), I received a letter signed by Will DeMartino, Assistant to Edward C. Johnson III in which he states "We plan to offer power of attorney on retirement accounts by year-end. At that time, we will send you a letter and the appropriate form".

Let's hope that Fidelity follows through and indeed solves what many of us find to be an unacceptable Fidelity policy.
Cecil Davidson
Houston, Texas
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