Sister and brother Mariko and Michael Kamio didn’t get along. Mariko started the Boca Grande taco chain. Michael worked for her for five years and then left to start the competing Anna’s Taqueria in 1995. (You can read more about their feud in Boston Magazine here.) Unfortunately, their dispute continued after Michael’s death in 2019.
The IRA
In 1991, Michael opened an IRA with Charles Schwab and named his parents as the primary beneficiaries and his sister as contingent beneficiary. In 1995, Michael married Elizabeth and in 2000 Michael and Elizabeth established an estate plan.
Elizabeth recalls that at that time Michael went online to change the IRA beneficiary to her. And, in fact, Schwab’s records indicate that it received a change of beneficiary form. However, neither Schwab nor Elizabeth have a copy of any change of beneficiary form and Elizabeth does not recall Michael filling out a physical change of beneficiary form.
This is the crux of the matter that led to the litigation resolved in Charles Schwab & Co., Inc. v. Mariko Kamio and Elizabeth Kamio (Suffolk Sup. Ct. No. 2284CV02298H, May 27, 2025). After Michael passed away both Elizabeth and Mariko (her parents having predeceased her brother) claimed the IRA and Schwab asked the court to decide who should be the rightful owner.
It’s All About the Contract
In considering the issue, Judge Adam Hornstine explains that an IRA account (like any other bank or investment account, we might add) is a contract between the account holder and the investment company. The Schwab IRA account agreement states that a beneficiary “designation can only be made in writing using an acceptable format described by [Schwab], and it will only be effective when it is filed with [Schwab] during the IRA Account Holder’s lifetime.”
Judge Hornstine explains that in 2000 when Elizabeth believes Michael changed the beneficiary designation, Schwab required that any changes be made on a form that had to be obtained at a Schwab office or mailed in response to a request from the account holder. At that time, “Schwab would not have accepted a verbal request from Michael to change the beneficiary of Michael’s IRA. Schwab also would not have accepted an email communication from Michael to change the beneficiary of Michael’s IRA. Likewise, Schwab would not have accepted a handwritten letter from Michael requesting a change of beneficiary to Michael’s IRA unless it was accompanied by a Schwab approved change of beneficiary form that was signed by Michael.”
Schwab could not explain why its internal records indicate that Michael had submitted a change of beneficiary form except to say that thousands of employees have access to their electronic filing system.
Based on the Schwab contract and Elizabeth’s inability to produce a written change of beneficiary form, Judge Hornstine rules in Mariko’s favor. “[T]here is no cogent admissible evidence in the record that Michael substantially complied with the requirements for designating Elizabeth as a new beneficiary of his IRA.”
Where This Leaves Us?
The moral of this story? Check and double check your beneficiary designations. And make sure you have a record.
This story also shows how hard this can be. It appears that Michael has some communication with Schwab and likely believed he had taken whatever steps were necessary to name Elizabeth as his beneficiary. He may have even been assured of this by a Schwab employee.
The tale also, unfortunately, reflects an ongoing family feud. Clearly, Michael wanted his IRA to go to Elizabeth rather than to Mariko. In a footnote, Judge Hornstine comments: “A public courtroom is not always the most desirable forum for resolving intra-familial disputes like this one, especially where a Court is bound to declare just one party or the other as the lawful beneficiary. A more equitable result may be able to be reached, but such a result will require discussion and agreement between the parties.”
(This decision appears not to have been published except in Massachusetts Lawyers Weekly, where those with accounts can read it here: https://masslawyersweekly.com/wp-content/blogs.dir/1/files/2025/06/12-023-25.pdf.)