Crooks

[leelee1]

Relative has a trust fund with very reputable company. Relative is 86 yrs old. Trust is worth 2million. Advisor ask her if he could pay off estate taxes buy taking out a loan from said company instead of taking it out of the account because interest rates were so low. Taxes were $150,000. Long story short. Six yrs later loan amount is now $260,000. They're not paying loan off and just she's now paying over $7,000 a yr interest on this loan. Is there something wrong here!!!!

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Is there something wrong here!!!!

Yes, anyone with a $2,000,000 trust who borrows a small amount of money "because of low interest rates" is probably not mentally capable of handling his own affairs. The advisor should be invested for fraud.

[jpg7n16]

It's actually illegal for an Investment Advisor to borrow money from a client.

Investor Alert.Dishonest IAs

NASAA Fraud Center

From: Investment Adviser Guide - NASAA

Some examples of practices that advisers should avoid are:

• Acting as an issuer or affiliate of an issuer of securities
• Recommending unregistered, non-exempt securities or the use of unlicensed broker-dealers
• Any activity that acts as a fraud or deceit on clients
• Charging unreasonable fees
• Failing to disclose to all customers the availability of fee discounts
• Using contracts which seek to limit or avoid an adviser’s liability under the law (hedge clauses)
• Limiting a client’s options with regard to the pursuit of a civil case or arbitration
• Borrowing money from or lending money to clients

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It's actually illegal for an Investment Advisor to borrow money from a client.

Are you sure that's what happened?

Advisor ask her if he could pay off estate taxes buy taking out a loan from said company instead of taking it out of the account because interest rates were so low.

[jpg7n16]

Are you sure that's what happened?

Not really I probably just misunderstood.

But the post doesn't make sense to me then. How could they be crooks if they didn't take anything from them? If they made a conscious choice to borrow instead of withdrawal, then they just made a bad decision - but no one stole anything.

I read that to read that the Adviser (who they're working with) took a loan from the $2 million to pay off estate taxes, and hasn't repaid them. That would be a crook. And that's how I read it, but that may not be what happened.


If OP's friend has $2 mil, why not just pay off the loan years ago? If it's their trust, they have the right to transfer out of it. If they don't have the right to transfer out, they wouldn't have been able to pay off estate taxes in the 1st place, and would have needed the loan no matter what.

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A little clarification from the OP would help immensely.