Parent took my money when I was a child:

[Moore]

There's a bit of back story involved so please bear with me (my family resides in NH).

When I was young I really wanted to invest in the stock market because the U.S. never supports ant responsable savings policies; I saved up my money from weekend work, birthdays, etc. and was about ready to invest. This was around the time of the financial crash (07 - 08) and I saw Ford as a good option because I had faith in its rebound --and why not buy and ridiculously low prices. My dad had an account with Scottrade, my brother and I were too young to invest on our own, and so we went through his account; the money was put in Ford, we saw it grow a bit, and then we ran into issues. Coming home from school one day dad asked if we trust him, given no context we said yes, at which point he told us he sold the Ford stock and bought Citigroup. Over the next few days he traded our stock a few more times despite us asking him not to (it was a little late to get back in Ford as it was on the rise, if I remember correctly).

When we invested the stock was around $2, it was soon at $12, but not making that much is not the worst of it. All the trading he did made it so the money was taxed and an amount needed to be paid to the IRS (this is what we were told, I don't know if this is true). My brother and I were out a few thousand dollars (a lot for young kids just starting to invest) and our potential for investment in the near future. To this day we have not received the money and with college loans piling up we'd really love it back. Our parents just got divorced, my dad is planning on leaving the country with the money he got (a bit annoying in itself, he has not worked for about a decade) and we want what he took before he leaves. Is there anyway we can get even some of it back? Any help is very much appreciated.

I should specify, I am now over 18 (whereas I wasn't before) if that matters.

 

[OHRoadwarrior]

You have no recourse against dad and frankly, I'm sure dad paid the bill for any mistakes you made and damages you caused over the years. Have you factored in the costs of all the food, clothing and shelter that were provided by dad on your behalf over the years, with your moral calculator? I realize times are tough, however now it is time to make it on your own. Good Luck.

 

[Moore]

In fact, I have factored that in; my dad has not worked in over a decade, precisely the time when I would have caused all that damage you asserted (not to mention, that's most of my life). Furthermore, all he has done for the past few years (well after this event) is smoke pot that he buys with my mom's money. I think my "moral calculator" is calibrated just fine.

Regardless, the law isn't supposed to concern itself with such normatively as "well, didn't your dad raise you? Doesn't that justify taking your money?". I'm not asking for judgement calls on the morality of it, I'm asking if I have legal recourse.

 

[tranquility]

The legal term you're looking for is "resulting trust". It's fancy law and you'll need an attorney to prosecute the "case". There are so many complications and issues here, there is little chance of a meaningful recovery.

 

[Moore]

Thanks tranquility. Will it be hard to prosecute because there is no way to prove he acted in a manner incongruent with my wishes? Obviously it won't be hard to prove my brother and I had the money and then he did, I'm just wondering where complications may arise, especially because I may have "answers" to them.

 

[tranquility]

Thanks tranquility. Will it be hard to prosecute because there is no way to prove he acted in a manner incongruent with my wishes? Obviously it won't be hard to prove my brother and I had the money and then he did, I'm just wondering where complications may arise, especially because I may have "answers" to them.

The basic legal theory is one most attorneys have never dealt with. Even estate and trust attorneys may not have dealt with it. There is no proof of a fiduciary breach. There is no easy way to prove damages. There is the father/famial relationship issue. There is a statute of limitations issue. There is a presumption against you regarding if it is a gift that must be overcome. If it was a resulting "trust" you don't get to direct where the funds go. There may have been tax issues. More issues once the facts are known. Knowing (aka proving) the facts is going to be a royal pain.

If you think you have a case, see an attorney. You have no chance pro per. It will be an expensive suit to prosecute both for attorney time and for the forensic expert.

 

[Moore]

I appreciate the knowledge/help. My first plan of action is to talk it out and see where it goes; from experience this will not work and I wanted a back up (the sheer threat of legal actions could provoke him to fold). I don't like doing things like this in my family, but he has taken advantage of too many people for too long. Thanks again.

 

[justalayman]

So, what ever happened to a parent's right to control their minor child's property, including their money?

The last I knew, a parent could simply take a child's earnings, savings, etc, and use them as they see fit.

 

[OHRoadwarrior]

So, what ever happened to a parent's right to control their minor child's property, including their money?

The last I knew, a parent could simply take a child's earnings, savings, etc, and use them as they see fit.

They generally can. OP is attempting to argue a fiduciary management duty. Unfortunately, dad is entitled to make the investment decisions and once the money has been co-mingled, it then becomes an issue of arguing proportionate gain or loss. In the case of investments, it is usually loss. The cost to OP to hire an attorney, pay for several years of record recovery and argue the theory any proportionate share profit, post tax, will belongs to him, will likely cost several times any possible recovery. If OP wants to get feeler on the expense involved he can call the brokerage house and obtain their hourly research fees, ask mom about previous gains or losses dad may have claimed on taxes and call an attorney to obtain an estimated cost to chase this. This is one of those hill to die on issues.

 

[justalayman]

so, is OP claiming he gave dad the money to invest? That wasn't clear to me. If so, then exactly what was the agreement when the money was given to dad to deposit into his trading account?


There are some oddities in the scenario as well.

Dad hasn't worked in 10 years and does nothing but smoke pot yet he has a Scottrade account. Now he is leaving the country. Seems like that would be difficult without a job to pay for travel.


Oct. 8, 2008- closing price 1.99


Apr 2, 2009- last day under 3.00

Jan 11, 2010- first day closing @ 12.00 or above. That was the only +12.00 day until Mar 1, 2010

When we invested the stock was around $2, it was soon at $12,

I'm not sure I would call a year and a half "soon" in the land of stock trading.

Over the next few days he traded our stock a few more times despite us asking him not to (it was a little late to get back in Ford as it was on the rise, if I remember correctly).

A few days? A few days would not have been a problem.

I don't think somebody is being honest here.

 

[Antigone*]

They generally can. OP is attempting to argue a fiduciary management duty. Unfortunately, dad is entitled to make the investment decisions and once the money has been co-mingled, it then becomes an issue of arguing proportionate gain or loss. In the case of investments, it is usually loss. The cost to OP to hire an attorney, pay for several years of record recovery and argue the theory any proportionate share profit, post tax, will belongs to him, will likely cost several times any possible recovery. If OP wants to get feeler on the expense involved he can call the brokerage house and obtain their hourly research fees, ask mom about previous gains or losses dad may have claimed on taxes and call an attorney to obtain an estimated cost to chase this. This is one of those hill to die on issues.

As dad is not a licensed broker he has no fiduciary duty to the kid whatsoever. I'm sure kiddo didn't pay the taxes on the realized gain, did he?