Dissolving Ric-E Trust

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jw50
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Joined: Thu Jul 27, 2017 2:00 pm

Re: Dissolving Ric-E Trust

Post by jw50 » Tue Jun 12, 2018 3:25 pm

Thought Ric is one of the good guys!

Really disappointed with the excessive fee.

FBN2014
Posts: 522
Joined: Sat Mar 08, 2014 3:07 pm

Re: Dissolving Ric-E Trust

Post by FBN2014 » Fri Dec 21, 2018 4:28 pm

Apparently Ric Edelman has heard your concerns with high variable annuity fees. Scroll to the bottom of the article. Interesting that this same variable annuity inside a trust scheme was sold by a salesman to someone I know who was terminally ill (now deceased) who bought a Lincoln Financial variable annuity for the benefit of his grandchildren. He dumped $2 million in it. Salesman made out great with a $120K commission. The VA has yearly fees of about 3%. Not good.

https://www.nytimes.com/2018/12/21/your ... nance.html
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

ItAllMakesCents
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Joined: Mon Jan 07, 2019 7:45 pm

Re: Dissolving Ric-E Trust

Post by ItAllMakesCents » Mon Jan 07, 2019 9:04 pm

@denben, which department was able to help you change the annuity and remove the trust?

Has anyone else had luck fighting this? I'm in a similar situation except that the original grantor is deceased, but the current trustee is on board to get this dissolved. The fees are ridiculous and the growth next to nothing. The next step I'm at is to is trying to contact an estate attorney to ask about what the process could be for Virginia's Uniform Trust Code, but I'd like to know if anyone else has had successful experience in this.

FBN2014
Posts: 522
Joined: Sat Mar 08, 2014 3:07 pm

Re: Dissolving Ric-E Trust

Post by FBN2014 » Mon Jan 07, 2019 10:39 pm

ItAllMakesCents wrote:
Mon Jan 07, 2019 9:04 pm
@denben, which department was able to help you change the annuity and remove the trust?

Has anyone else had luck fighting this? I'm in a similar situation except that the original grantor is deceased, but the current trustee is on board to get this dissolved. The fees are ridiculous and the growth next to nothing. The next step I'm at is to is trying to contact an estate attorney to ask about what the process could be for Virginia's Uniform Trust Code, but I'd like to know if anyone else has had successful experience in this.
If the beneficiaries are minors what are the tax consequences? Aren't all distributions ordinary income tax on the gains and aren't there IRS penalties if distributions are taken out before age 59 1/2?
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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unclescrooge
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Re: Liquidating Ric-E Trust

Post by unclescrooge » Tue Jan 08, 2019 12:14 am

hand wrote:
Wed Jul 31, 2013 10:43 am
donall wrote:
rfburns wrote:How unfortunate for your mother. And as you know she meant well for you.
I dug this up, so I can see anyone falling for it back then. It turned out to be a period of excess in the markets.
http://www.washingtonpost.com/wp-srv/bu ... 072799.htm
The old article says the age requirement is 59. But I would still go to battle with them if I thought there was a chance to take control.
This is a irrevocable trust. The article indicates you can change advisors. I would not google Ric-E trust, but how to change an irrevocable trust such as this:
http://www.rbh.com/trust-me-your-irrevo ... 2-15-2009/ which has the following advice:
"Modification or termination of a noncharitable irrevocable trust may be accomplished with a single “consent modification” document if the trust’s grantor and all of its possible beneficiaries agree. The grantor and beneficiaries may agree to take any action with respect to the trust’s terms — even if that action is oppositional to the trust’s purpose." Read your trust documents and google, google is your friend, please investigate possible options. Be aware there is a cadre of lawyers who set up Ric-E trusts. Best of luck, hope that you can put the funds into Roth IRAs the next 5 years instead.
Even if legally forcing a refund / dissolution of the trust may be too difficult / expensive to do given the small-ish size of the trust, you should consider whether you can convince Ric-E et al that it is their best interest to do so. Publicity is your friend, especially if these arrangements are still being marketed / generating revenue.

Consider clearly documenting what your mother did, when she did it and why she did it and the results / fees incurred. This sounds like this is something that could be shopped to a consumer advocacy segment on a news program or some other form of news outlet. I imagine returning the $20k would be a small price to pay to stop the bad publicity.
OP should file a complaint with finra. The advisor will probably settle than fight over a couple of hundred dollars in revenue.

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sergeant
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Re: Dissolving Ric-E Trust

Post by sergeant » Tue Jan 08, 2019 1:11 am

denben wrote:
Tue Jun 12, 2018 12:49 pm
Hey everyone -- I have taken action with my state's attorney general, FINRA and the state department of insurance since an annuity falls under that category. AMAZINGLY, that action resulted in the immediate offer to change ownership of the annuity from the trust to the beneficiary which will then allow the annuity to be sold (penalties and fees, yes... but still free of the ridiculous RIC-E trust since it will be an empty shell.)

The various offices are investigating on different levels, and I've shared this list serve with them as well to see that this is a pervasive and toxic issue for many families.

The department of insurance inquiry has resulted in the most immediate response from the various parties -- so I HIGHLY recommend you send in a complaint with your state's department of insurance ASAP. The compliance office at Royal Alliance (for whom Edelman worked at the time) will enjoy hearing from those offices, I'm sure.

I explained the sales process, group "event" sales environment, various inappropriate descriptions in the sales materials, attorney network, etc.

Hope this helps!
denben seems to have figured it out.
Lincoln 3 EOW!

ItAllMakesCents
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Re: Dissolving Ric-E Trust

Post by ItAllMakesCents » Tue Jan 08, 2019 8:36 am

FBN2014 wrote:
Mon Jan 07, 2019 10:39 pm
If the beneficiaries are minors what are the tax consequences? Aren't all distributions ordinary income tax on the gains and aren't there IRS penalties if distributions are taken out before age 59 1/2?
I'm more concerned with removing the Trust than paying fees for the annuity. I'd just rather get the money away from this money grubbing company and put it into something more worthwhile I can easily manage.

The “consent modification” document sounds like a option but the grantor is deceased, so it sounds like the process would have to be to seek court approval. I was hoping to pursue this without dumping money for a lawyer, but it's beginning to sound like that might not be the case. @denben seems to be the only poster who has had success in this, but I'd like to know who was actually successful in getting the ownership changed and what paperwork had to be filed (attorney general? FINRA?)

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