(flaimo)
The Grim Reaper of the recession harvested Rich’s door and screen company, leaving him with unpaid debts. Then the real nightmare began. Bank of America seized his elderly mother’s life savings to pay off Rich’s line of credit because she had added Rich’s name to the account to protect the funds in case she became incapacitated.
Now both Rich and his mother are sick to their stomachs. He writes:
My partner and I tried to salvage our company by using our retirement to fend of this option to no avail.Bank of America then proceeded to seize all of my mother’s savings from her B of A savings account with all the money she has in this world 27,500.00.
Two years ago my 87 year old mother asked me to sign on her account in the case that she were ill and not able to get to the bank and I complied.
My mother is on social security and has been for the last 20 years with no other income.
This was her money and I had no access at any time, nor did I ever deposit or withdraw funds at any time and that money was not mine and never to be it was saved from her social security.
I was not ever aware of the funds that she had and the account number was never information that I was privy to.
Mom was to use these funds to enter a retirement center this winter and now cannot.
In May of this year I was forced in bankruptcy protection as I had no other option with zero income In 2009.
This money was my mothers and only hers and I feel this is criminal and I want these funds returned to her account and I will do whatever is necessary to accomplish this.
It’s doubtful BofA crossed any legal lines here, but it just seems wrong that Rich’s mother has to suffer due to a technicality. What would you do if this happened to you?
More From Consumerist
-
Homeowners Win Lawsuit Over Fraudulent Foreclosure But May Still Lose House
-
7 Things We Learned About The History Of The Doritos Locos Taco
-
Gym Staff Member Bullies Couple For Being Fat, So They Want Out Of Their Contract
-
Waffle Joint Blames Groupon’s “Shocking Business Practices” For Its Demise After Only 3 Months
-
Southwest Owes Passengers $29 Million In Free Drinks
revocable living trust ftw, this is exactly why you’d choose this vehicle vs. just adding the name to the account.
sad story and very unfortunate, but with a business in play and someone’s retirement assets, an accountant or other professional should have been consulted.
This sucks, and it’s why I would never allow my mother to do something like this. Better to look into a POA with a springer if the parent is worried about having someone look after his/her affairs…
Time and time again, financial articles write that you should never, ever put someone else’s name on your assets. That’s what power-of-attorney documents are for.
Just because you posted that the money is your mother’s, why should anyone believe you? How can you prove that? Your name is on the account. This is not a technicality.
Incorporation fail?
I’m not usually one to take the side of the big bad wolf but this guy doesn’t seem to understand that if you have a company it has to be incorporated in some way to keep this very thing from happening. In short, this guy probably not have been opening a business to begin with.
So… Right on that getting Junior to co-sign was a bad idea.
One possible option: if the account had Mom’s social security payments, then the bank could be in serious trouble for taking them.
The real lesson? NEVER MIX PERSONAL BANKING AND BUSINESS BANKING WITH THE SAME BANK! The Bank can (and will) choose to dip into any account with your name on it controls at any time to pay itself whatever it thinks it is owed. Keep your savings, personal, and business account in different banks if you want any sort of protection of your assets from another part of your financial life. It’s not an end all solution (if you want an end all, bury your money in a box!) as they can still sue you and get court orders to access your money, but at least they can’t do it overnight without telling you.
You can make an account payable-on-death or even give them signatory authority without titling the account in their name. Unfortunately, bank personnel are not always well versed on the differences between each of these options, just as they often don’t understand the way the FDIC insurance limits work.
Sucks that his mother’s savings were depleted. That’s just crap, but legal I think. A durable power of attorney would have helped quite a bit I think.
Anyhow, sounds like the OP’s mother is going into assisted living/long term nursing care soon. Depending on what her care needs are, and where she lives, her $27K would have paid for that for 6 or 8 months at most. Which means an asset spend-down and Medicaid enrollment was in her future. Basically, the OP would have spent all his mother’s money funding her care, until she was indigent and qualified for Medicaid. The OP can still do the same, the process will simply be accelerated due to BofA’s actions. This is, sadly, the fate of many old folks who have little in the way of assets (or poor estate planning). Most nursing homes and assisted living facilities have social workers on staff to help coordinate this process, as it occurs so frequently.
If he had no idea, who talked his mother into doing this? Was she aware of her son’s financial situation? Was it after his bankruptcy declaration? If so, B of A should be sued. Theft by deception! Somebody there must have talked her into adding his name.
Another point.
Suppose you get put on the account with your millionaire father-in-law’s multi-million dollar stock account. Further suppose that you up and die. Guess what! Your heirs are now looking down the barrel of a multi-million dollar estate fee to the government. The IRS considers any assets which you CAN control as being in your estate. The fact that it wasn’t your money and you had no legal right to use them matters not. They will be included in your estate for tax purposes. Yet another reason to permanently do away with the estate tax. By the way, don’t die for at least a year after your name is removed. Take care now.
f*ck BOA for this
Pretty sure an LLC would’ve solved this problem. This is truly very, very sad but I can’t actually fault BoA, despite despising me with every last fiber of my being. Sadly, despite your claim of never having access to her money, paperwork showed differently. I think about the only thing you could do at this point would be to attempt to stir up some bad press. Even then, you’ll likely end up with nothing but certainly no harm in giving it a try.
take them to court
“It’s doubtful BofA crossed any legal lines here”
Well there you go……….
@madashell
For what? Collecting on debt he owes?
Plus, where in the OP does it say he was from Florida?
I’m an idiot and I know two things (or at least I think I understand them correctly) would have helped this guy:
An LLC legally separates the man from the company.
Power of attorney gives one person the power to act on behalf of another.
So, had the man set up his company as an LLC, the bank could not (as far as I know) sieze money that did not belong to the company to pay the company’s debts. If his mother had set him up with power of attorney, he would have had access to her accounts in the event that she became incapacitated, but he would not have “owned” that money and the bank couldn’t have touched it.
Hate to say it, but it looks like he learned his lesson the hard way and his mother is suffering the ill effects of his bad decisions. Going to the media and trying to bully the bank in to giving the money back might work, and in this case, giving the money back may be the right thing to do, but the bank is only doing what it has to do. They can’t just give everyone’s money back because they have a sob story. A bank is a business and you agreed to pay back the money you borrowed. They have the right to take your money if you default on your loan. That’s why I got my home mortgage through a different bank. At least if I default I can take what few dollars I have left and rent a moving truck to get my stuff before they lock me out.
I don’t even think it’s Bank of America’s fault. Ever hear of a POWER OF ATTORNEY???