costly incompetence

[Deanna W]

My sister is executor for my fathers estate, he passed away 5/1/01 leaving her listed as beneficiary for an IRA. She indicated to his investment advisor that she wanted a withdrawl before Jan.1, 2002(my father was 70+ and receiving distributions) and the advisor did not get one out and the IRS is levying a 7000.00 fine for failure to take a distribution for 2001. The IRA is still not into my sisters name as this great legal advisor has constantly put her off. This is the tip of the iceberg with this guy but by far and in large his most costly mistake to date. Do we have a case? Im having her check the fine print on the contract for arbitration clauses but it seems we need to go after this guy somehow for his negligence. Need a place to get started, Thanks for any help.We are in Washington State.

 

[vrzirn]

How did she "indicate to the investment advisor"? Did she call, write letter, send fax, e-mail? If he is a member of a brokerage house there are legal forms to be sent by them and signed and returned along with the letters testamentary or copies of the trust and certified death certificate. Her responsibility as executor is to follow-up and see that these things are done in a timely manner. A simple contact with the legal department could have avoided all this.

 

[Deanna W]

Thanks for responding, this has been confusing at best. My father named a revocable trust to the account, however he never completed that document. Simply stated, one never existed although he at one time intended to do so. She had to vouch for that in writing to the company. In addition, the letter of testamentary, the will, death certificate ect were all sent to him quite some time ago. He had indicated that he was "on it" but that due to the complexicity of the trust issue, he was seeking advice from the legal department. She asked more than once for him to put her in touch with the firms legal department and he indicated that she needed to let him handle it. Not until January (I was present at that meeting) did he tell her she needed to take a distribution for 2001. He did not mention that she already should have done so. She immediately called the IRS to verify that and was told that she owes 7000.00 from the estate as a fine for not taking a distribution in 2001. In my opinion, she should have had a good estate lawer handling this whole mess, but that aside, shouldn't this financial consultant have known that this fine would happen? She was very diligent in her contacts with this man and was given excuse after excuse why things were getting held up. Thanks again.

 

[vrzirn]

If button A does not work, you do not keep pressing it over and over. You move on to button B. All your sister had to do was to call the brokerage firm and ask for the legal department.