TAKING STOCK: Dear friend passed away


Dear Mr. Berko:

A dear friend of mine passed away after an extended illness, and I agreed, pursuant to his wishes, to help his wife, Alice, with the new responsibilities of her financial affairs. My first duty was to convince the funeral home that $32,000 was more money than Alice cared to spend for a casket. After posting an obituary, Alice was inundated by letters and emails with offers that looked shady. She got calls from real estate agents who wanted to list her home and help her downsize to a smaller residence. Alice got calls from car dealers, one of whom recommended she trade her 4-year-old Lincoln with 21,000 miles for a new car with a five-year, 50,000-mile warranty. She was told by carpetbaggers that her house needs a new roof, a new paint job and a new air conditioner. And various charities have used her confusion to solicit donations. To those without financial knowledge or an experienced eye, these types of solicitations appear necessary and legitimate.

Then her husband's insurance representative, a week after his death, wanted Alice to convert her husband's insurance checks into several questionable annuities, including an index annuity. The stockbroker wanted Alice to move her $1.8 million portfolio of long-held stocks and mutual funds to a managed account. He also told her that he could double her money and that he would charge only 1.5 percent of the account's value, or $27,000, a year. And her pastor, within a week after the funeral service, came to Alice's home and gave her a sales pitch to donate a large amount of money to the church (a charitable gift annuity), from which she would receive guaranteed tax-free income for life. A longtime family friend, who was a business partner with Alice's husband years ago, asked her to participate in a deal that would pay 9.5 percent annually, plus appreciation of at least 10 percent a year. Another family friend wanted to borrow $83,000 and pay 12 percent interest.

The unkindest cut of all is her two married daughters, from whom she and her husband have been estranged for 13 years. They live 800 miles away in Atlanta and want to ingratiate themselves in her affairs. The daughters are trying to persuade Alice to sell her home and move to Atlanta so they can care for and be closer to her.

I've never read an article about the kind of people who prey upon naive recent widows. If you, in your clever way, could write a column on the subject, you'd be doing an enormous good by educating the public about a subject on which more information is sorely needed, especially at a time of emotional trauma.

-BK, Springfield, Ill.

Dear BK:

Your letter, though it needed to be smoothed out, makes an informative column, and Alice is darn fortunate to have a kind friend such as you. Yes, Alice's problem is uncommonly common, but widowers are just as susceptible as widows. There's always a brotherhood of financial gangsters who circle the obituaries and can smell a mark as quickly as sharks smell blood. And most of these highbinders are so smooth that they can easily charm warts off a witch's nose.

If you weren't able to help Alice, I'd recommend she visit one of the trust companies in Springfield. For a reasonable fee, such a company could pay her bills, provide assistance for necessary home repairs, make appointments for visits to doctors, manage her brokerage account and provide other personal, hands-on care that she might need. Another helpful source would be her certified public accountant, who is already familiar with her finances. There are good accounting firms in most cities, with staff to handle these activities. Because I'm in my late 70s, I employ an investment adviser to manage a large part of our portfolio. Though my family is financially knowledgeable, no one has the time or investment skills needed to manage that portfolio. But the best protectors of the Alices of this world are spouses who teach their partner to be financially knowledgeable and knowledgeable, wise, experienced and caring money managers whom people can trust implicitly.


Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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Published: Tue, Apr 21, 2015


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