Ask Liz Weston

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Liz Weston

Q&A: How to protect QCD checks from mail theft

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Dear Liz: In response to a reader whose check to the IRS was stolen from the post office, you (again) warned readers that mail theft and check fraud have soared and that electronic payments are now the safest way to send money.

I’ve been making my charitable donations using qualified charitable distributions from my IRA. My brokerage does this by mailing me a check in the amount I request, payable to my charity. I then mail the check to the charity.

It seems risky, but it is the only way I can use the QCD option to donate untaxed dollars. Is there a safer way to do this?

Answer: You’ve touched on an unfortunate reality. People are being warned not to mail checks because of rampant theft, yet brokerages still rely on sending physical checks for certain transactions such as qualified charitable distributions or 401(k) rollovers.

Since you can’t eliminate the risk with electronic transfers, see if you can eliminate at least one trip through the mail. Ask if the brokerage will mail the check directly to the charity, rather than sending it to you first. If that’s not an option and the charity is local, you could hand-deliver the check.

Another possibility is to find out if your IRA offers check-writing privileges. If it does, you could write the check directly to the charity. Use indelible black gel ink, which is harder to remove than regular ballpoint ink, and consider sending the check by certified mail so you can track its delivery.

You also should closely monitor your account to make sure the check gets cashed. IRA checkwriting agreements can require customers to report missing or fraudulent checks promptly. Waiting too long could jeopardize your ability to recover a loss.

As you know, qualified charitable distributions allow people 70½ and older to transfer money directly from an IRA to an eligible charity without including the distribution in taxable income. To count for that tax year, though, an IRA check must clear by year-end. Make sure the check is sent before December to leave plenty of time for the charity to receive and deposit it.

Q&A: Why a fireproof safe may not protect your estate documents

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Dear Liz: I’d like to add to the conversation about where to store estate documents. Having lost my home, studio, office, and all the contents in the Eaton fire of January 2025, I can tell you that the temperature of our urban fire was high enough to incinerate the contents of many “fireproof” home safes in Altadena. I would no longer keep an only copy there.

In my family, we had arrangements made for me to handle my parents’ trust, and I can share that my parents’ financial planner has both hard and electronic copies of the trust. This might be another way families could access the trust, at least in a copy.

Answer: Thanks for bringing up such an essential point, which is that “fireproof” is a misnomer. Safes can be fire-resistant, but prolonged intense heat can turn paperwork to ash.

Previous columns mentioned the importance of keeping estate documents updated, which could make it more likely that an attorney would have a copy if the originals are lost.

Another increasingly popular option is to use online vaults such as Everplans. These secure online services allow people to store digital copies of important documents and deputize trusted people to access them either immediately or after the account owner’s death.

Q&A: Delayed tax refund? Contact your lawmaker

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Dear Liz: A reader requested advice regarding a delayed tax refund. I had a similar problem a few years ago. The IRS owed me a substantial refund. I tried calling the IRS but couldn’t reach a person.

The automated system insisted my refund had been sent. I wound up calling my congressman’s office. They assigned a field representative to investigate. She was able to contact someone at the IRS who opened an investigation. She periodically followed up and kept me advised by email of her efforts. It took a few months but thanks to her work (and persistence), the IRS finally sent me my refund.

Answer: Thanks for the great tip! Elected representatives’ constituent services teams often can help people resolve issues with government agencies.

Q&A: Can a brokerage sell your stocks without warning?

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Dear Liz: How can I get help after my brokerage’s margin team illegally sold my Tesla and Palantir stock, citing market volatility and not notifying me?

Answer: Just because you don’t like the result doesn’t mean the brokerage acted illegally.

If you took out a margin loan using your portfolio as collateral, the agreement you signed allows the brokerage to sell investments if your account equity falls below a minimum level known as the maintenance requirement.

The firm generally doesn’t have to notify you in advance or let you choose what gets sold. Even if you’re given a deadline to make up the deficiency, the firm can liquidate your investments sooner if it decides waiting creates too much risk.

That’s not all. Brokerages can typically change their maintenance requirements at any time, without notice.

You may have heard the term “margin call” to describe the situation when an account’s equity falls below the maintenance requirement. Some people misunderstand that to mean that the brokerage actually calls you or otherwise gives you warning. That’s not the case.

Carefully read the margin agreement you signed. You can also ask the brokerage to explain in writing what triggered the liquidation.

If you believe there are discrepancies between what the agreement allows and what happened, you can complain to the firm’s compliance department, file a complaint with FINRA or the Securities and Exchange Commission and consult a securities attorney.

Q&A: Does an inherited Roth IRA get a new 10-year deadline?

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Dear Liz: I recently inherited a Roth IRA. If I understand correctly, I can leave the money in the IRA for 10 years. If I die before then and my adult son inherits the account, does he then get an additional 10 years to do something with the money?

Answer: That depends on the circumstances.

If you inherited this Roth IRA from your spouse, you can use your own life expectancy to calculate required minimum distributions, Luscombe says. If you die before emptying the account, your son typically would get 10 years from the date of your death to drain it.

The same rules apply if you are otherwise an “eligible designated beneficiary,” which includes disabled or chronically ill people and those who are not more than 10 years younger than the original Roth IRA owner.

If none of the above exceptions apply, however, you must empty an inherited Roth IRA by Dec. 31 of the 10th year following the original owner’s death. If you die before then, your son inherits your deadline along with the account. He doesn’t get a new 10-year period but must withdraw the money from the Roth by the same deadline that applied to you.

Q&A: Make sure your estate planning documents can be found

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Dear Liz: Your response about finding trust documents was very helpful. It reinforces that people need to provide copies to their loved ones in case they become incapacitated and the originals are lost or can’t be found.

People seem to complete these documents and assume they will never get dementia or become physically unable to care for themselves. Assume the best, prepare for the worst.

Answer: Even people who understand the risks may downplay them, procrastinate or not feel comfortable sharing copies yet. That makes it even more important to review estate planning documents with an attorney every three to five years and after any major life change.

These check-ins can help ensure your documents reflect current laws, beneficiaries and financial circumstances. They also mean your attorney may have a relatively recent copy if your originals go missing.

Attorneys typically aren’t required to retain copies, but many do, especially since scanning technology became common, says Jennifer Sawday, an estate planning attorney in Long Beach. Solo practitioners and smaller firms may not have the storage capacity to keep every document indefinitely, she adds.

In any case, an attorney’s copy is definitely Plan B. Plan A is to store the originals somewhere secure, such as a fireproof home safe, and make sure the right people know where to find them when the time comes.