Is your money really your money?
As most of you know, my mom now lives in the Memory Care area of a nice (think Buick, not Yugo) Assisted Living facility. Her room and board, prescriptions, medigap coverage and other charges requires a bit over $8,000 a month. Plus, my brother and I must still maintain her home. Keeping all the bills paid takes more than her income from Social Security, pension, 401 (k) distribution and a ‘medigap’ subsidy from her former employer.
The good news: my parents built-up a pretty decent nest egg for their golden years. For the first two years of mom’s placement her money market account covered what we needed.
The bad news: that money market became a memory.
Seeing this coming, last fall I contacted the managers of mom’s investment account at State Farm Funds (her former employer) to get some of her money. The fund does not really want to give my mom her money.
I went “0 for 2” trying to get a disbursement, even after sharing a very pretty, lawyer-prepared Power of Attorney executed prior to my mom leaving her house. My brother had better luck, getting a younger call center employee with the same first name as his daughter-in-law. After a lot of time on the phone he got a modest check which bought us time to work things out.
Cutting to the chase, my brother and I had to go to Probate Court and get appointed as mom’s Conservators and Guardians. (By the way, if you need a Probate Court, I recommend the St. Charles version. It is much friendlier and quicker than the St. Louis County court.)
So, I sent the State Farm Fund folks a nice letter and a sealed copy of the court’s appointment letter. They were not impressed, not even by the vellum window envelope and the Priority Mail postage.
Knowing when to delegate, I had my brother call. He didn’t get his lady but he did get someone to send him a couple of forms.
Two problems. They were the wrong forms. And, they required a Medallion Guarantee Signature.
I knew from past experience handling a friend’s affairs that Medallion requirements are a sharpened bear trap. They are a private certification system only those in the securities and banking industry can use. I called a good acquaintance in the brokerage biz who helped me get Medallion signatures in the past… I couldn’t get past her firm’s gatekeeper. They suggested my mom’s bank.
Alas, my mom’s account is at Commerce Bank:
“Our customers are naturally frustrated and upset when, after a long period of review, we must tell them that we cannot provide the Medallion Guarantee even though the document says it is required…Commerce Bank has determined, as a general practice, not to review or provide Medallion Guarantee stamps on mutual fund documents…”
I called the fund. They said I needed to get a signed and Notarized statement from mom’s bank, on bank letterhead, explaining why they won’t issue a Medallion Signature.
They also sent me two new forms. One is just three pages but the 12 pager-will take a lot of work.
Oh yes, it’s estimated that mutual funds contained a bit over $22,000,000,000,000 in 2022. Much of that wealth, of course, belongs to senior citizens.
Only is it really your money if the system of banks and managers won’t let you – or your legally appointed representative – touch it?
This is not rare. My mom’s facility manager commiserated that they’ve had many residents’ families struggle with the same issue. Plus, a friend in the legal community related her challenge of getting one of her late husband’s accounts paid out. “They really don’t want to give up that money.”
This won’t come as a surprise but one of the financial industry’s strongest protectors in Congress is Missouri’s own Rep. Ann Wagner. She works tirelessly to protect the industry from federal regulation, including acting against the fiduciary rule. (Basically, anyone touching your retirement funds and other accounts must act objectively in your best interest, not their company’s.) As Ann said in a press release last year, “The Obama Administration’s DOL [Dept. of Labor] fiduciary rule would have left Americans who are just starting to build their retirement savings without access to financial advice or paying more for fewer options and decreased service.” [11/2/23]
Yes, young people are better served by vultures feathering their nest than protecting the worker’s retirement money.
Oh, the person from the fund did offer me another option: go to Ohio where they’re located and get a federal court to issue a court order.
Anyone have a favorite hotel in Columbus? Stay tuned.
Glenn Koenen