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Trust. No. One.

It’s been nearly a year since my post “On my Death, Please, Take a Breath.” In that post I relate a story about how a fellow who inherited an IRA within a trust panicked, and lost nearly 25% of it to taxes. Instead, he could have taken limited distributions and paid little to no tax at all. I don’t know who advised this person, but all the work his sister put in to the planning of her estate evaporated.

Recently, I received a comment on my “Suze on Variable Annuities” article from last July. A woman wrote that she was advised by her bank to put the money in to an annuity. Now, whether you like or don’t like annuities isn’t really the issue. I’d be just as angry if she said she was put into an S&P ETF, but then went on to state she had no idea what that meant. I do feel that bankers are drifting (have already moved?) into the same category as most other scam artists preying on the uninformed. I am still waiting for her reply to tll me what, exactly the product is so I might take the time to read the prospectus and explain to her what she now owns. The fact that her ‘banker’ did not do this is criminal.

I recall a number of years ago, I was making a deposit at my local bank, and as I stood to write out the ticket, I heard an old person ask about T-bills vs CDs, the T-Bill happened to be slightly higher that week. The banker sitting at his desk told her, “The CD is a little lower, but it’s FDIC guaranteed. There’s no guarantee on the T-Bill.” And another sale was made. I don’t know on what planet the “full faith and credit of the US treasury” doesn’t trump the FDIC, but I thought better than to disrupt the place, and provoke a fight.

Joe

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