Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Thursday, August 30, 2018

Caring for Aging Parents - When the Child Watches Over the Parent

ManhattanTracey Dewart faced a daunting task last summer: moving her 84-year-old mother who suffered from Alzheimer's, Aerielle, from her Manhattan apartment to an assisted living facility in Brooklyn to be reunited with Tracey's father. To help pay for her mother’s care, Ms. Dewart relied on an investment account at J.P. Morgan Securities that her father had opened eight years prior. But Ms. Dewart found that the account had been charged around 10 times the commission that an account of that size should have been charged.

Ms. Dewart found that Trevor Rahn, the broker who handled her father's account, had sold two-thirds of the portfolio in one month, and then reinvested most of the proceeds, yielding about $47,600 in commissions, according to her attorney. A statement listed all 344 trades that month as “unsolicited” — meaning that they were the customer’s idea, not the broker’s. But Ms. Dewart, who handled authorizations for the account, said that she had not given Rahn permission for those trades.

Ms. Dewart considered taking J.P. Morgan to arbitration as allowed by the customer agreement, but she settled instead for a sum that she is prohibited from discussing.

There exists a murky regulatory territory that brokers inhabit - they are not necessarily fiduciaries, meaning they do not always have to act in a client’s best interest. Typically, brokers only have to recommend investments that are “suitable,” a lower standard.

See Tara Siegel Bernard, Caring for Aging Parents, With an Eye on Their Broker Handling Their Savings, New York Times, August 24, 2018.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.


Current Affairs, Estate Planning - Generally, Professional Responsibility | Permalink


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