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I signed away my $500,000 inheritance when I was a child

Discussion in 'Real Estate & Other Investments' started by Scorpio, Apr 2, 2017.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    The Moneyologist: I signed away my $500,000 inheritance when I was a child — what can I do?
    By Quentin Fottrell
    Published: Apr 1, 2017 10:27 a.m. ET







    This daughter says a financial adviser offered his services to her family at her father’s funeral


    [​IMG]
    Dear Moneyologist,

    I have a question regarding whether or not I may have legal grounds to sue my family’s financial adviser on the basis of providing advice that was not in our best interests.

    A few years ago, while I was still a minor but right before my 18th birthday, my father suddenly passed away, and it was discovered in his will that he had cut my mother, his wife, out of the will and split his estate between his two children, myself and my brother. (My mother and father were married, but they had a difficult relationship.)

    ‘At my father’s funeral, an old “friend” of my father, who also happens to be one of those financial advisers at those firms that try to sell you mutual funds and insurance, offered to help my mother sort out her finances.’

    Unfortunately, my mother had just been in the hospital for a very long stint following a serious surgery, so she was not in the best physical condition to help us as a family handle our finances.

    At the funeral, an old “friend” of my father, who also happens to be one of those financial advisers at those firms that try to sell you mutual funds and insurance, offered to help my mother sort out her finances. Per his recommendations, my brother and I gave up our inheritance from our father and wrote checks (about a $500,000 each) to our mother.

    He then consolidated these funds and some of my mother’s additional funds in, of course, a few mutual funds that he happens to sell. While he also recommended my brother and I buy life insurance at a discount, we did not.

    Now that I am of adult age, I’ve become increasingly concerned about how this came about and feel as if this “friend” may have manipulated the great grief of my family and my status as a minor to line his pockets with fees from the mutual fund sale that he was able to get from us during this very hard time. I don’t believe he was acting in an ethical manor.

    Moreover, in retrospect, I would never have given away my inheritance had I known it was going to a mutual fund that has extremely high front-load and upkeep fees. I do not regret giving this money to my mother, but I’m extremely displeased with how he might have manipulated the situation for his own financial gain.

    When I’ve asked questions about fees, he’s not transparent and he is defensive. Unfortunately, my mother still uses him to manage her money, but still has, in my opinion, mental and physical limitations to prevent her from making the best decisions.

    Ultimately, I just want what’s best for my mother and our family. I don’t trust this “friend” to best manage our family’s assets given that I believe he took advantage of our grief and my status as a minor, and my mother’s incapacity from illness to benefit himself. Even though I wrote away my legal claim to my inheritance when I was 17 years old, do I have any rights to legally explore any of my concerns?

    Paige

    Dear Paige,

    There are two legal or, at the very least, ethical issues you may need to deal with here: one concerning your mother and the other relating to this not-so-friendly adviser.

    As you were a minor when you inherited, you were the beneficiary of this inheritance, but your mother was your guardian. The headline: You didn’t have legal ownership of this money until you came of age, so this money likely still belongs to you under the law. You should talk to a lawyer and/or a financial adviser about the specifics of your case, but it may be that this $500,000 is still salvageable, assuming that it’s still there and hasn’t been squandered, and you didn’t actually have the rights to sign it away as a minor.

    You were the beneficiary of this inheritance, but your mother was your guardian and you didn’t have legal ownership of this money until you came of age. It may be that this $500,000 still belongs to you, assuming that it’s still there and hasn’t been squandered.

    “You can claim that you did not sign the proper releases at age 17, thus you did not have authority to give away that money and anyone who received that money should have to give it back,” says Blake Harris, an attorney at Mile High Estate Planning in Denver. “This will depend upon what releases you, your mom, and any attorneys involved in the transaction signed. There is no guarantee that this route will work.”

    Talk to your brother and have a formal family meeting. Tell your mother that you are all on the same side and don’t believe this financial adviser is acting in your best interests, request to see the accounts and the fees he has charged and whether the investment has increased in value over time and, if necessary, file a complaint against the Certified Financial Planner’s board. Tell her that you would like control you’re your finances. Our Moneyologist Facebook Group also weighed in on your dilemma (see the link, below).

    Harris recommends that you gather any documentation that you have showing the transactions that have occurred since the family “friend” took over management of your families’ money. “Have these investment decisions reviewed by a financial adviser at another firm,” he says. “Another financial adviser can offer an objective look into whether the fees and investments that your family has incurred are appropriate.”

    When you have all the information, you can decide as a family whether you should and can file a claim against this friend. You will resolve this quicker and with least pain, if your mother feels like you are on her side, and she doesn’t feel ganged up upon. Was he even a friend? Or did he know that your father died, left money behind, and stalk his funeral to drum up extra business? It seems like an outlandish way to run your business but, in this case, passing his business card out with his condolences appears to have worked.

    In the event that you regain control over your finances, you can go to the Chartered Financial Analyst and Certified Financial Planner, which have some of the most prestigious designations in the industry. Check out the National Association of Personal Financial Advisors. In the meantime, you can check with the CFP Board to see if your current adviser was ever disciplined. There is, of course, the possibility that he may not have any certification at all. Good luck in reclaiming your inheritance. Your father would want you to have it.

    Do you have questions about inheritance, tipping, weddings, family feuds, friends or any tricky issues relating to manners and money? Send them to MarketWatch’s Moneyologist and please include the state where you live (no full names will be used).

    Would you like to sign up to an email alert when a new Moneyologist column has been published? If so, click on this link.


    http://www.marketwatch.com/story/th...e-when-i-was-a-child-what-can-i-do-2017-03-20
     
    Last edited: Apr 2, 2017
    Hystckndle likes this.
  2. Agavegirl1

    Agavegirl1 Silver Miner Site Supporter ++ Platinum Bling

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    The CFP is a relatively new designation that came about as a result of shady financial managers and is similar in it's rules to a Bar Association or the AICPA. A self regulating body with the power to suspend or revoke a license or censure a member. It's a good start. I looked into becoming one after my divorce and even completed several college courses to do so. I lost interest in the field and its requirements due to the fact I was getting too close to retirement age myself. (I already have a CPA and MS in Health Care Administration ... perpetual student I guess). I realized I could study a lot on my own to manage my own stuff and not worry about other people's. I do taxes part time for fun and vacation money.
     

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