Wife with Full POA Withdrew 90% of Husband's IRA

[BCM092755]

What is the name of your state (only U.S. law)? KENTUCKY

Is an INDEPENDENT registered investment advisor (i.e. not employed by the brokerage company) liable under these circumstances:

The wife whose husband gave her FULL POA withdrew over a period of more than 4 years $1 million of hubby's IRA which started out in 2005 with a value of about $1,100,000? Let's say the current value of the account is $90,000.

There exists written warnings from the advisor to the wife, a few of which she signed and dated and returned to the advisor, in which she acknowledged that the advisor had vehemently warned her that the withdrawals were grossly excessive and that the account had absolutely no way in the future to recoup the withdrawals through growth from the investments in the IRA. There are also emails where the advisor gave similar warnings.

The electronic withdrawals were made online by her--from the brokerage account to a JOINT bank account (the husband and wife were joint owners of the bank account) ; so technically the advisor didn't know who made the withdrawals and the money actually went to the husband since he was joint owner.

Lastly, 10 years ago when the account was opened with $1,100,000 the husband told the advisor that the wife would eventually "spend every last dollar" of his IRA. The husband told the advisor this as the reason why the husband rejected the advisor's advice that they let the advisor prepare and manage a financial plan for them.

So, is the advisor liable? What should the advisor do at this point?

Thanks!

 

[Silverplum]

In your other thread, you're in Indiana: https://forum.freeadvice.com/medical-health-care-malpractice-72/doctor-reneged-after-initial-verbal-agreement-612838.html


What's up with that?

What is the name of your state (only U.S. law)? KENTUCKY

Is an INDEPENDENT registered investment advisor (i.e. not employed by the brokerage company) liable under these circumstances:

The wife whose husband gave her FULL POA withdrew over a period of more than 4 years $1 million of hubby's IRA which started out in 2005 with a value of about $1,100,000? Let's say the current value of the account is $90,000.

There exists written warnings from the advisor to the wife, a few of which she signed and dated and returned to the advisor, in which she acknowledged that the advisor had vehemently warned her that the withdrawals were grossly excessive and that the account had absolutely no way in the future to recoup the withdrawals through growth from the investments in the IRA. There are also emails where the advisor gave similar warnings.

The electronic withdrawals were made online by her--from the brokerage account to a JOINT bank account (the husband and wife were joint owners of the bank account) ; so technically the advisor didn't know who made the withdrawals and the money actually went to the husband since he was joint owner.

Lastly, 10 years ago when the account was opened with $1,100,000 the husband told the advisor that the wife would eventually "spend every last dollar" of his IRA. The husband told the advisor this as the reason why the husband rejected the advisor's advice that they let the advisor prepare and manage a financial plan for them.

So, is the advisor liable? What should the advisor do at this point?

Thanks!

 

[LdiJ]

In your other thread, you're in Indiana: https://forum.freeadvice.com/medical-health-care-malpractice-72/doctor-reneged-after-initial-verbal-agreement-612838.html


What's up with that?

Lots of people live in Indiana and work across the bridge in Louisville KY and vice versa. There are other spots along the Ohio River as well. I bet people who live and work in KY sometimes go to doctors in Indiana too.

 

[Dave1952]

What do you believe that the adviser has done wrong that would make him liable for anything? The husband expected his wife to run through the IRA and gave her a POA to assist in this. The adviser warned that the withdrawals were depleting the account.
I don't understand the question.

 

[justalayman]

If there is any action available it would be by the owner of the IRA against his wife. It sounds like the financial adviser was advising his ass of while the husband turned a deaf ear to the advice.

but understand; an adviser is not a conservator. A fool is going to do whatever they wish, regardless of the amount of wisdom provided by others.

 

[BCM092755]

In other words, does the POA take the fiduciary of the hook?

What do you believe that the adviser has done wrong that would make him liable for anything? The husband expected his wife to run through the IRA and gave her a POA to assist in this. The adviser warned that the withdrawals were depleting the account.
I don't understand the question.

Sorry, I was unclear. I wondered if the advisor--who is a fiduciary--should have (even though the husband gave the wife full POA) contacted the husband TO MAKE SURE THAT HE KNEW what she was doing. After he gave her POA, he never communicated with the advisor again. She effectively raped the account over a series of years

In other words, does the POA take the fiduciary of the hook?

 

[justalayman]

The advisor is not a life coach. Their fiduciary responsibility is limited to the advice they are hired for and provide.

 

[anteater]

Does anyone wonder why many financial institutions are reluctant to accept POA documents?

Damned if you do, damned if you don't.

 

[I'mTheFather]

Just to clarify, OP is the adviser, right?

I'm no expert in this area (not by a long shot!), but I wonder why you warned the wife, but not the husband as the owner of the account. Wouldn't it make sense to warn the husband of the excessive withdrawals since he was your client? Also, I wouldn't rely on the technicality of the online withdrawals. Since you only warned the wife, you obviously knew who was making the withdrawals.

I don't disagree with any of the other responses. The husband should have questioned the deposits to the joint account. But, I suspect he can cause you some grief.