Providing Advice to In-Laws

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Topic Author
cornellbuds
Posts: 22
Joined: Mon Dec 30, 2013 10:15 pm

Providing Advice to In-Laws

Post by cornellbuds » Mon Apr 15, 2019 12:49 pm

My wife is one of three siblings. Her brother is managing their mom's finances on all of their behalves.
The brother distributes some of the mom's assets to the siblings annually. With this year's distribution, we received a "statement" of the underlying assets from which distributions are pulled. After seeing the statement, I am thinking the brother could use some input, but I want to do so without putting him on the defensive. He is a good and honest soul.

The mom is a retired public servant whose pension and SS cover the majority of her expenses. In addition, she has about $1.1M in assets split into three buckets:

1) Real estate: two houses, only one listed on the asset summary at a value of $350k. (Zillow value = $550k.) The brother currently lives in this house; the mom lives in the other. Not sure about mortagages, but I believe the property the brother is living in has none. The brother may or may not stay in the house; he'll decide in a year or two when his own circumstances clarify. Until then pays to "maintain the property" but not rent. Zillow lists the rental value at $2000/month.

2) Trust held for the three siblings: $50k of stock held for many many years in two companies (likely with significant LTCG) and $370k in "equities" managed by Raymond James. Overall value $420k.

3) Assets in the mom's name: an IRA valued at $200k and a "Trust" valued at $135k, both managed by Raymond James in unspecified accounts (e.g. not clear if bonds, stocks, or something else).

A few issues jump off the page for me:

Raymond James: overall, RJ manages about $705k for my mother-in-law. I suspect the fees are astronomical and not worth whatever advice they're providing. It would be nice to know how these funds are invested (asset classes).

Real estate: I don't know if it's fair to my wife and sister to have the brother living in the one house and paying only to "maintain" it. I believe the second house where the mom currently lives should also be a part of the summary of her assets.

Taxes: there should be some clarity around how these might be taxed if and when they're passed through to the siblings. I don't know to what extent this has been considered if at all. I'm sure trusts have some unique pass-through characteristics I'm not well versed on.

Perhaps there are other issues those in this forum might suggest as worthy to discuss. Perhaps you have advice on how to broach these topics. Perhaps you can provide some education where I may be lacking. The goal for me is to help the family best manage their assets without in any way compromising relationships. I believe everyone could be better off with some minor changes (like maybe transferring Raymond James account to somewhere with way less fees).

What say all of you?

JoeRetire
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Re: Providing Advice to In-Laws

Post by JoeRetire » Mon Apr 15, 2019 1:01 pm

cornellbuds wrote:
Mon Apr 15, 2019 12:49 pm
My wife is one of three siblings. Her brother is managing their mom's finances on all of their behalves.
The brother distributes some of the mom's assets to the siblings annually.
Hopefully, it is all done in accordance with mom's wishes.
With this year's distribution, we received a "statement" of the underlying assets from which distributions are pulled. After seeing the statement, I am thinking the brother could use some input, but I want to do so without putting him on the defensive. He is a good and honest soul.
Has your brother in law asked for your help? What does your wife say about this?
Perhaps you have advice on how to broach these topics.
My advice - don't.
The goal for me is to help the family best manage their assets without in any way compromising relationships.
This is solely your mother in law's business. And if she passed on the responsibility to your brother in law, then it's now his business.
Unless he specifically asks for your help, then stay away.

Consider any money coming from your mother in law to be a bonus, not an entitlement. Maximizing this money is not your concern. Getting yourself in the middle of this uninvited wouldn't end well.

Make sure your wife thanks her mom for every gift/distribution. And make sure she thanks her brother for doing the work.
You stay silent.

delamer
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Re: Providing Advice to In-Laws

Post by delamer » Mon Apr 15, 2019 1:20 pm

Virtually everyone on this forum will be sympathetic to your concerns.

But that does not mean you have any standing to raise those concerns with your in-laws.

Your wife does have such standing, but does she want to do so?

NotWhoYouThink
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Joined: Fri Dec 26, 2014 4:19 pm

Re: Providing Advice to In-Laws

Post by NotWhoYouThink » Mon Apr 15, 2019 1:26 pm

If your MIL needs 10 years of long term care at $100K-$150K per years, is there money for that? The distributions might be premature.

I'd agree with others that this is totally, 100%, not your business. Many people do a poor job of managing their money. If your BIL asks for your advice you can mention that low fees and passive investments have some benefits, but if he doesn't the ask him about his kids or his golf game or what music he's listening to these days.

Topic Author
cornellbuds
Posts: 22
Joined: Mon Dec 30, 2013 10:15 pm

Re: Providing Advice to In-Laws

Post by cornellbuds » Mon Apr 15, 2019 1:28 pm

Thanks to you early repliers in helping me to assess just how slippery a slope it may be to provide advice.
To clarify a bit, my wife shares my concerns about how the assets might be managed more efficiently. She has encouraged my to make my expertise available to the family so that everyone involved may be better off. She would weigh in personally, but she lacks the knowledge of personal finance to do so.

Rus In Urbe
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Re: Providing Advice to In-Laws

Post by Rus In Urbe » Mon Apr 15, 2019 1:32 pm

COMPLETELY agree with the above.
This is your MIL. Not your business.
Unless your brother-in-law and your wife beg you on their knees to be involved, D-O-N'-T touch it.

The OP's comment that
I don't know if it's fair to my wife and sister to have the brother living in the one house and paying only to "maintain" it. I believe the second house where the mom currently lives should also be a part of the summary of her assets.
indicates that you can be seen to have a personal agenda here. Sorry, but that agenda is to get a bigger slice for the wife and the sister-in-law. Whether it's "fair" or not is your wife's family's affair.

Unless there is some kind of elder-abuse going on (and there is no indication here that that is the case), this is all between the MIL and her children. Leave it be.
I'd like to live as a poor man with lots of money. ~Pablo Picasso

Leemiller
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Re: Providing Advice to In-Laws

Post by Leemiller » Mon Apr 15, 2019 1:40 pm

I’m surprised there are distributions from an estate of this size given the possibility of long term care. Also, for me I’d worry less about AUM fees and more about the sibling living rent free in a home that would provide additional money to your MIL. My recommendation would be for your wife to ask whether your brother’s imputed rent is being deducted from his annual distributions. But on the other hand how involved is he in helping MIL on a day to day basis? I also don’t think it is fair for out of area siblings to expect to be treated equally to those who help their parents on a more frequent basis.

As for your wishing to get involved on the trust and other aspects. Are you a trust and estates attorney? While the trust sounds overly complicated to me for an estate that size, I don’t know that I’d get involved. Also, I’d be more
focused on the 300-500k asset earning nothing for MIL vs AUM or potential future tax drag for the children.

DonIce
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Re: Providing Advice to In-Laws

Post by DonIce » Mon Apr 15, 2019 1:40 pm

Even if you provide good advice, and even if you manage to do it in such a way where they take the advice without being offended, you are STILL exposing yourself to MASSIVE risk in the relationships. Imagine that they take the advice and put all the assets in a solid, conservative, boglehead 3 fund portfolio. And then imagine that just by chance, the market crashes next year. Who do you think they are gonna blame for their losses? You. Right now, if they have massive losses, they can blame "Raymond James".

Steer clear.

The VERY MOST that I would ever consider doing in a situation like this is, one time only, casually suggesting some investment-related reading that helped you in the past.

delamer
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Joined: Tue Feb 08, 2011 6:13 pm

Re: Providing Advice to In-Laws

Post by delamer » Mon Apr 15, 2019 1:46 pm

cornellbuds wrote:
Mon Apr 15, 2019 1:28 pm
Thanks to you early repliers in helping me to assess just how slippery a slope it may be to provide advice.
To clarify a bit, my wife shares my concerns about how the assets might be managed more efficiently. She has encouraged my to make my expertise available to the family so that everyone involved may be better off. She would weigh in personally, but she lacks the knowledge of personal finance to do so.
Then you and your and your wife jointly can talk to her mother and siblings about the Raymond James fees.

I’d have written information about the Vanguard PAS available to share and ask about how that fee compares to Raymond James’.

Plant the seed and see what response you get.

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Doom&Gloom
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Re: Providing Advice to In-Laws

Post by Doom&Gloom » Mon Apr 15, 2019 2:14 pm

As Ann Landers would say: MYOB.

trustquestioner
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Re: Providing Advice to In-Laws

Post by trustquestioner » Mon Apr 15, 2019 2:19 pm

Stay out of it. There is no happy ending here. Of course Raymond James is ripping her off and BIL should be paying rent. Doesn’t matter - none of your business.

Hockey10
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Location: Philadelphia suburbs

Re: Providing Advice to In-Laws

Post by Hockey10 » Mon Apr 15, 2019 3:03 pm

Casually mention to your brother-in-law about a great website called Bogleheads.org. Maybe he will start reading on his own, become a Boglehead, and eventually fire Raymond James. Most likely he will not. Otherwise, don't waste your time.

NotWhoYouThink
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Re: Providing Advice to In-Laws

Post by NotWhoYouThink » Mon Apr 15, 2019 3:10 pm

Raymond James has better sales skills than you have. If you bring up fees to your BIL, his Raymond James advisor will explain to him that their expert investing insight and experience more than justify their fees, and some store brand or grow-your-own portfolio using Vanguard index fund just isn't sophisticated enough for his complex family situation. Or something like that. Are you willing to argue with a salesman who has had years of training and experience justifying his fees, and who has zero incentive to even consider your arguments?

You can gripe with your wife if you want, but in a "what are ya gonna do?" way, not in a "we're going to get this fixed" way.

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