Spending spree

Merrill Lynch has relented. For months they put up hurdles that kept me and my siblings from getting money my father left us. You can read the irritating story here if you want. Sometime in mid June though they seem to have surrendered and the funds bequeathed to us finally started to flow. The last batch arrived on July 1 when about $3000 in cash along with a bunch of mutual funds finally arrived. The only real hang up at the moment is not with Merrill Lynch, but Ally Bank. It has a policy that they won’t give you full credit for deposits over $5000 for five business days. Which means I can’t spend much of that money until later in this week.

I am tempted to go wild with $80K or so suddenly in my accounts. It’s not an enormous amount of money, but it’s by far the biggest windfall I ever received. Before I knew we were going to get money, I thought about simply giving most of it away to a few deserving souls. It would not change our standard of living much.

Yet with the inheritance, if I wanted for the first time in my life I could do something truly ostentatious. I could buy a BMW or take the wife and me on a round-the-world cruise, all guilt free. For better or worse, I’m not wired that way. First things first. About half of the money will be used to pay for the solar panels that were recently installed on our house and to pay off our remaining mortgage balance. Both are wiser uses of Dad’s money. Our mortgage balance wasn’t much, but paying it off will give us a couple hundred dollars more to spend or save every month. If the engineers were right then our solar panels would not only generate clean electricity but also add about $150 a month that we would have sent to the power company instead. Giving the gift that keeps on giving would be the sort of thing Dad would like me do with the money as he was relentlessly practical. Pay yourself first.

While I was comfortable with giving a lot of the balance away, my wife soon professed other plans for Dad’s money. Visions of style danced in her head. Take our furniture, for example. Much of it looks nice, but it’s cheap particleboard on the inside with a laminate on the outside. Until now we had always bought furniture when we needed it and had just what we needed. It sort of matched what we had, but not quite. She quickly developed a plan for part of the money that she executed with deftness and aplomb yesterday. For just under $5000 she bought us some quality solid wood furniture, stuff made so well it’s likely to last longer than we do. These included a new living room sofa and loveseat, a china cabinet, two armchairs for the sunroom and a corner TV stand. The wood furniture is in her favorite color (oak). The furniture with fabric on it will have colors and patterns that look nice with our peach walls, plus will be textured to resist cat claws and treated to deter cat vomit. The only downside is we have to wait about five weeks for it, as it is being manufactured in Virginia and Arizona. I haven’t seen her so excited about a project in at least a dozen years.

This doubtless is only the start. We moved into a new custom home last year but it’s still a work in progress. We have another list right behind the furniture, mostly things we used to have that we threw away or did not come with the house. For example, we need top quality screen doors that will probably set us back $800 or so. The old gas grill was discarded when we moved. We replaced it today and I assembled it just in time to try it out for a Fourth of July barbeque. Thanks Dad. What’s next?

I have had the same set of stereo speakers since 1979. Hey, they sounded excellent. All these years later though, it’s probably time to finally retire them. Our stereo system is early 2000s but the reality of stereo systems today is that they are kind of obsolete. Today it’s about projecting high definition audio and video where you need it in the house now, and streaming most content, sometimes between devices with a Roku or Chromecast stick. We’ll still keep a DVD player but I can see it’s already on the way out while a wider and higher definition TV is probably on the way in. Content will come mostly on demand over the Internet. I am baffled by how to do all this magic and not sure how much of it I want to do, but what seemed unwise before now has become, well, what the heck. Dad’s paying!

I’ve already replaced my desk chair to make it more ergonomic. My desk itself needs to be replaced. Cheap particleboard desks have always worked for me in the past but maybe this time, I’ll replace it with something solid wood. I’m confident if we worked at it we could spend it Dad’s money just on stuff for the house. For example, we skipped an upstairs bath to save money when the house was constructed. I could have one put in. Meanwhile, there are less costly items under consideration. My wife is petitioning me for a new top of the line standalone mixer, as she makes her own bread. What about an awning for the deck? A chair for the front porch? Our dining room table has scratches and the chairs need to be reupholstered. Why not just replace them? Dad’s paying. What about the sort of doodads that people with more money than we have usually have around the house? Like real china in the china cabinet. Sterling silver. Large fake potted ferns in the living room. An eight-foot long aquarium filled with colorful fish. Dad’s paying.

Most of this just doesn’t appeal to me. The stuff that matters is generally my computer, my monitor and a high speed Internet connection. I don’t need or want a fancy car. I don’t want fancy threads: t-shirts and jeans are fine with me. A fun indulgence might be a fancy vacation somewhere, perhaps a return trip to Hawaii. Dad can finance it.

Spending the inheritance should be more fun that this. Saving it should be more fun too. But it feels anticlimactic to me. Money can’t buy love, but someone you love can bequeath you money when they die, as my Dad did. It’s a way to show love, but while it buys real things it still feels somewhat hollow. In reality it means little compared to what I lost and Dad that was you. I would trade it all away for just another hour with you happy, healthy, and chatting about the Washington D.C. that you loved. I only have the memories now.

And a fatter bank account.

Stuck in Merrill Lynch beneficiary hell

It sure is nice to inherit some money. Good luck in collecting it, at least at Merrill Lynch.

My father passed away on February 1. Some weeks afterward our stepmother told us we were beneficiaries to some of his accounts. It turned out to be a fair amount of money, considering there are eight of us, roughly $80,000 each. My sister spent a few weeks on the phone with M/L going in circles. Frustrated, she asked me to be the family’s liaison. She still has a job. I am retired.

Sure. Whatever. I’m used to playing the good brother role and I did have the time. And boy it sure takes time if you mean going around in pointless circles. They are clearly loath to let go of Dad’s accounts. In fact, it’s hard to imagine how they could make it any harder to claim money that is rightfully ours.

Over more than thirty years my father had a relationship with “Lee” at M/L, who apparently owns a brokerage under the M/L umbrella. Over the decades a lot of things have happened in this industry. For M/L, already a huge and impersonal company, it meant being acquired by the world’s largest and most uncaring bank: Bank of America. This is something I learned later on. Had I known, I would have taken it as an omen of what was to come.

It sounded pretty straightforward. Dad had about 28% of the funds he wanted to bequeath us in a simple account, a “Cash Management Account” to use the M/L term. The rest were in Roth accounts, which were tax advantaged. So you would think it would be pretty simple: sell any mutual funds in these accounts, divide the totals by eight and cut each of us a check for that amount.

Ha ha! Of course not! The first set of excuses I got when I made my initial queries was, “It’s tax season, we’ll talk to you after April 15.” They were so busy in the M/L office that they can’t be bothered to help us with this, at least not while they have clients that want to give them money rather than take it away. To say the least Molly, the lady I spoke with, was curt. Feeling a bit ticked off a few days later I dialed Lee.

Lee was all sunshine and light, expressed condolences and said this wasn’t that big of a deal. He’d have Molly send me the forms we needed. One ripple was that since the Roth funds were tax advantaged, we might want to set up inherited Roth IRA accounts. Or we could take the money as cash. In any event it’s an inheritance. No taxes to worry about.

So many of us dutifully decided to set up inherited Roth IRAs, a puzzling process to learn about and hard to set up as you need a death certificate. As for that Cash Management Account of Dad’s, my sister sent me the forms she had. They required notarization. It took some time since there are eight of us but we all found notaries. They sent the forms to me. I double checked them and mailed them in as a batch. Given their importance I sent them certified mail so they couldn’t claim they got lost in the mailroom.

A couple of weeks later after hearing nothing I inquired about them. Molly looked at the forms and said, oh, these aren’t the right ones! I pointed her to emails we had gotten saying they were the right ones. Oh, but that’s a Merrill Edge form (a subsidiary of BankAmerica.) They don’t accept that form because they are Merrill Lynch, not Merrill Edge. Somehow I managed to not raise my voice because it was no small matter of time and expense by eight of us to get all these forms signed, notarized and sent in. Okay, I said, what form do we send in then?

Well, there is no form, Molly replied. You write a letter listing the shares you are entitled to, get it notarized and send it in. Do you have a sample? Oh no, we don’t do that. You have to do it. How do we know it will be correct when we send it in? Well, underwriting will tell us if it’s okay. Oh boy, eight of us, all doing individual letters, with numerous back and forth letters, no guidance, until maybe we crank out one they would accept. And no one will get anything until all eight of us do it correctly. So this isn’t going to work. Well, it’s how we do things. After another chat with Lee he agreed as a “special exception” to give us a sample letter with an attached spreadsheet that listed shares and cash we were each entitled to. I guess they expect their clients to hire CPAs to do these things.

Some weeks passed during which Molly went on vacation. Eventually after dodging calls for a few days I got her on the phone. I learned they could not cash out the funds in the Cash Management Account. My father had requested an “equal division”. In their minds it meant we all had to get proportional shares of the mutual funds in the account. They couldn’t just mail us a check. We needed each to have a broker that would take these funds.

After much back and forth I learned that dividing these shares by eight of us meant there were fractional shares left over. Fractional shares could not be passed to us and would have to be sold. We all had to get whole shares. I figured they would want us to send notarized letters saying it was okay to do sell these fractional shares. Surprisingly they let me as my family’s spokesman authorize it. Of course, they could have volunteered this information weeks earlier, but did not. You have to persistently dig for it and if you ask the right question they will give you the right answer. They won’t volunteer anything. God forbid they give you a document that explains the whole process with a simple checklist to follow.

They suggested we all set up Merrill Edge Cash Management Accounts to make it easier to get the money. Of course this also has the advantage of keeping the money inside the Bank of America Empire. So I tasked my siblings to set these up. By this time of course they were spitting nails. The last thing they wanted was some sort of Merrill anything account. But it looked like it could save months or years of runaround, so I requested they each set one up anyhow. They had a contact in their office that was sometimes available who could set these up. Some siblings gave up in frustration when calls to this lady were not returned and called their local office or set one up online.

Molly said that their system wouldn’t show them our Merrill Edge account numbers unless their office set them up. I assumed she was going to complete the draft letters and put in the exact numbers of shares and our account numbers. When I asked, she said I was supposed to do it. Naturally this was news to me. I now have all these forms done and will mail them out to my siblings, who must get this second set notarized. Except only the letter must be notarized. The attached spreadsheet just has to be signed and dated.

I’m betting that when these all arrive at M/L they’ll find a reason to kick them back and we’ll have to start all over.

Then there are my Dad’s two Roth funds. Here to speed things up we were encouraged to cash them all in. My siblings were fine with this. I had researched the funds in these accounts and they were underperforming funds. Granted my father was chasing stability instead of market trends, but of the five funds I looked at three were real laggards compared with the S&P 500 index and all came with more than 1% annual management fees. Jeebus! Well, at least if we cashed them in we could hardly do worse than how they managed these funds!

But they wouldn’t sell the Roth funds until each of us called them personally and okayed it. That took some time. To “speed up” the process I was told to send drafts of the Roth withdrawal forms I got from my siblings so they could flag errors. I sent them electronically on May 20. There they sit, still waiting to be reviewed. Molly says their staff of four is down to 2 and she is so busy but she hopes to do it next week. Doubtless they will find errors that will have to be tediously corrected. But if I get them all corrected then I can send in this batch of forms and in theory there should be no issues so they can disburse the funds. I’m fully expecting I’ll send them in and they’ll find a reason to kick them back, something they haven’t explained before. We’ll see but it depends on poor overworked Molly actually deigning to review our forms.

In short, it’s a messed up and confusing process. In fact, it’s not a process at all. It seems they make it up as they go along. It seems likely that they are paid based on the assets in their accounts and they don’t want to lose them. Only with persistence, firmness and summoning your inner Donald Trump can you collect and I suspect we are nowhere close to getting our shares. They won’t volunteer anything. Meanwhile siblings who could use the money so it can grow for their retirement can’t get it. Not that M/L cares at all.

I have no idea if this sort of hassle is typical in the industry, but I can say to avoid M/L at all costs. If you have beneficiaries for accounts, ask to see their process for distributing funds and make it known to the beneficiaries. Make sure the process is straightforward. My Dad didn’t do this. The inheritance was a complete surprise. But being a beneficiary doesn’t mean much if you can’t actually get the money.

I am expecting before this is over we’ll be filing a lawsuit. It will probably go into the bottom of a long queue of similar lawsuits all from angry people like me simply trying to collect money intended for them.