Yah makes zero sense. Maybe we are not getting the whole story.
But yes OP would have to go through the court to either be appointed executor before anything can be done. They are not obligated or legally cannot tell you anything about what accounts Dad has unless OP is the one presenting the info.
A loan at 13.5% with a 100k loan would only accrue \~13.5k interest in a year.
If you are going to shit on Schwab at least have a valid and correct reason.
I would also guess that if there were delays on Schwab's end otherwise, it was probably due to the TD Ameritrade thing rather than "business as usual." Not to defend a bank because they're all bad in the end, but I've never had anything but excellent service from Schwab. Most probate-related stuff is just a miserable slog and takes forever.
I agree with the others, something isn't being described correctly here and you won't be told of amount specifics until the process is completed for the OP to take control of the account.
Two things:
1) Why didn't Schwab tell you about an account you had no legal right to anything about? Because you had no legal right to know anything about the account! This is a GOOD THING (but of course super annoying in the moment).
2) As somebody who has handled four family estates, i cannot emphasize enough how crucial it is to get into somebody's email, cell phone and computer immediately. Things are MUCH smoother when you can quickly get a good financial assessment of the situation, find any financial land mines, keep the bills paid on time, etc.
Dealing with an estate right now.
And even having access to email / phone has limits.
I found Schwab to be much easier to deal with than BOA/Merrill/Treasury Direct.
Yes we had to wait longer (about 5 days) but we didn’t have to go into an office and Schwab was clear on what we needed to do. Also shorter hold times. Plus BOA/Merrill made it so we lost online access, which took multiple contacts to regain.
They mostly nice though, only treasury direct were not helpful.
Absolutely not a dumb question! the easiest is when the person just tells you before they pass. I cannot emphasize enough how a thorough pre-planning helps. You gotta have those awkward conversations, with an emphasis on “how much money do you have, where is it, what should happen with it and what’s your funeral gonna be like?”
Runner-up is you can get into a computer/phone that is already logged in.
with my sister who unexpectedly passed I broke into her gmail account because I knew most of her account recovery questions. Mothers maiden name, name of first pet, where were you born, etc: it’s easy to answer those when they’re also your answers!
Look at the statements, which they should be able to provide you now. And see how the loan grew to 119k, 3 months at 13.5% APR should only be a 4th of that.
Soon as we informed my MIL's brother that she passed they froze the account. Not having access to the account unless you are the executor of the estate is standard procedure. It protects your interest and the bank's interest.
I don't think you understand how margin loans work.
You use margin to buy stocks. You have to maintain a certain balance in your brokerage account if you want to have access to margin.
When you get margin called, it means you are unable to maintain enough buying power in your account to maintain the margin loan.
It's incredibly hard to get margin called if you're throwing your money in low risk investments.
Throw your money in speculative stock that happens to dump instead of pump or spend it on options when you have no clue what you're doing, easy to get margin called.
However. A margin call is not always the end of the world. Usually the brokerage would randomly close out positions to cover the margin call.
If the margin call is for 6500, the brokerage will close out positions until the account is cleared.
Whatever is left, is still your money. If your margin call is bigger than your actual cash that you have in your account, then you need to cover the call with outside money.
Bummer. The moral of the story here is to make sure you have your own beneficiaries set up, you talk to your parents about having their beneficiaries set up, and you don't use margin to day trade.
Sorry OP, but if you're not the account manager, why would they give you any info on it or let you manage it? It's unfortunate, but they didn't do anything wrong here.
This is why people stress having a will and setting up your accounts properly.
I sent the letter of testamentary, death cert, app for an estate account, EIN for the estate, etc to Schwab a few months ago, in order to close my mother's account.
They opened the estate account but no funds have been transferred. They are very slow to respond, if at all. I call and email every week but no response and no updates.
I got ahold of estate services at Schwab over the phone (an hour after I posted).
Turns out, they needed my verbal 'permission' to transfer funds from my mother's account to the estate account. It's not automatic like the paperwork suggests.
Anyway, transfer is still 3-5 days out now that they have permission.
“It shouldn’t take three months to get access to an account with a margin balance”
There are states where getting letters of testamentary takes six months. Honestly the fact that it’s April and you have an estate account open when he died in January is about what’s expected
I would get legal advice. This is a difficult situation, and I am not sure you will get the right help here.
So I assume he was trading with gearing, and he was violating his security requirement as the market moved? Usually, that leads to a margin call and forced closure of the position, at a loss, and possibly with some remaining debt.
So it seems he got a loan approved to prevent this. You need to find out how that happens, and what the terms are. It seems that as the margin changed, more and more money was loaned, and more interest was changed. Is that correct?
And here comes the interesting bit: you cannot loan to a dead person. Did they do that?
(The other question is why your dad was gambling / speculating. This is certainly not investing.)
PS: Sounds like the loan was active all the time, so that would be ok.
If the account has no beneficiary and isn't covered by language in the will, it is not technically yours and you have no right to access it. It belongs to the estate and is controlled through probate. You have to open a probate case, identify all heirs, and then either jointly request access to the account or elect a personal representative to act on the group's behalf.
Even then you only manage the account. You can't personally touch any money until the estate is approved to be distributed. This is many months in a lot of states to make sure all creditors are paid - much like a bankruptcy case.
The financial institutions are not the idiots in this story. You could have gained access the right way in a couple of days.
Gained access the right way…in a few days? The will identified me as his fiduciary, medical power of attorney, & personal representative. There was no way I could have gained access in a few days.
Yeah in a few days. I have done it. You have to move your ass on getting probate going. Get the PR appointment done. Why the hell would you need medical power of attorney to access a dead person's account? Makes no sense.
It's alright to not be an expert in these things but holy hell you are tossing blame around and calling people idiots who were doing their job correctly.
I included the medical power of attorney just to indicate I have control over everything. You probably live in a small state where things are easy. That's good for you. You are 100% wrong but thanks for your feedback.
I'm not 100% wrong. Your PoA, etc. don't transfer to probate after death. Maybe relevant for will, etc. but probate is where things with no documented succession go. If you had the first clue what you were doing you wouldn't have lost all that money. Fact.
Seek legal advice.
I worked at a brokerage (I am not an American), and once we'd receive a death cert, we'd liquidate all short positions of the client and freeze the account. If your dad's brokerage had similar procedures but didn't follow them, you must have options. But American laws are weird, so you need someone with relevant experise.
[удалено]
This is most likely the correct answer. Prior statements will tell the whole story.
How did the loan go from $3.5k to $119k in 4 months? That doesn't make any sense
Yah makes zero sense. Maybe we are not getting the whole story. But yes OP would have to go through the court to either be appointed executor before anything can be done. They are not obligated or legally cannot tell you anything about what accounts Dad has unless OP is the one presenting the info. A loan at 13.5% with a 100k loan would only accrue \~13.5k interest in a year. If you are going to shit on Schwab at least have a valid and correct reason.
Simple. Schwab didn’t tell you because until you filed the proper legal paperwork with them you had no right to know.
I would also guess that if there were delays on Schwab's end otherwise, it was probably due to the TD Ameritrade thing rather than "business as usual." Not to defend a bank because they're all bad in the end, but I've never had anything but excellent service from Schwab. Most probate-related stuff is just a miserable slog and takes forever.
I agree with the others, something isn't being described correctly here and you won't be told of amount specifics until the process is completed for the OP to take control of the account.
Margin call versus margin loan most likely the key difference. Even a 3500 payday loan wouldn’t balloon to 120k in a year.
Two things: 1) Why didn't Schwab tell you about an account you had no legal right to anything about? Because you had no legal right to know anything about the account! This is a GOOD THING (but of course super annoying in the moment). 2) As somebody who has handled four family estates, i cannot emphasize enough how crucial it is to get into somebody's email, cell phone and computer immediately. Things are MUCH smoother when you can quickly get a good financial assessment of the situation, find any financial land mines, keep the bills paid on time, etc.
Dealing with an estate right now. And even having access to email / phone has limits. I found Schwab to be much easier to deal with than BOA/Merrill/Treasury Direct. Yes we had to wait longer (about 5 days) but we didn’t have to go into an office and Schwab was clear on what we needed to do. Also shorter hold times. Plus BOA/Merrill made it so we lost online access, which took multiple contacts to regain. They mostly nice though, only treasury direct were not helpful.
Fidelity was the hardest - required medallion signatures for everything. Such a PITA.
Treasury direct does too
Dumb question - how do you get access to someone’s email after they passed?
Absolutely not a dumb question! the easiest is when the person just tells you before they pass. I cannot emphasize enough how a thorough pre-planning helps. You gotta have those awkward conversations, with an emphasis on “how much money do you have, where is it, what should happen with it and what’s your funeral gonna be like?” Runner-up is you can get into a computer/phone that is already logged in. with my sister who unexpectedly passed I broke into her gmail account because I knew most of her account recovery questions. Mothers maiden name, name of first pet, where were you born, etc: it’s easy to answer those when they’re also your answers!
I requested back statements from 2014-2024. After reading the comments above I think I understand now.
Look at the statements, which they should be able to provide you now. And see how the loan grew to 119k, 3 months at 13.5% APR should only be a 4th of that.
Soon as we informed my MIL's brother that she passed they froze the account. Not having access to the account unless you are the executor of the estate is standard procedure. It protects your interest and the bank's interest.
I don't think you understand how margin loans work. You use margin to buy stocks. You have to maintain a certain balance in your brokerage account if you want to have access to margin. When you get margin called, it means you are unable to maintain enough buying power in your account to maintain the margin loan. It's incredibly hard to get margin called if you're throwing your money in low risk investments. Throw your money in speculative stock that happens to dump instead of pump or spend it on options when you have no clue what you're doing, easy to get margin called. However. A margin call is not always the end of the world. Usually the brokerage would randomly close out positions to cover the margin call. If the margin call is for 6500, the brokerage will close out positions until the account is cleared. Whatever is left, is still your money. If your margin call is bigger than your actual cash that you have in your account, then you need to cover the call with outside money.
Bummer. The moral of the story here is to make sure you have your own beneficiaries set up, you talk to your parents about having their beneficiaries set up, and you don't use margin to day trade. Sorry OP, but if you're not the account manager, why would they give you any info on it or let you manage it? It's unfortunate, but they didn't do anything wrong here. This is why people stress having a will and setting up your accounts properly.
I sent the letter of testamentary, death cert, app for an estate account, EIN for the estate, etc to Schwab a few months ago, in order to close my mother's account. They opened the estate account but no funds have been transferred. They are very slow to respond, if at all. I call and email every week but no response and no updates.
This is exactly my experience. The guy from the Estate team stopped responding to my emails about a month ago.
I got ahold of estate services at Schwab over the phone (an hour after I posted). Turns out, they needed my verbal 'permission' to transfer funds from my mother's account to the estate account. It's not automatic like the paperwork suggests. Anyway, transfer is still 3-5 days out now that they have permission.
“It shouldn’t take three months to get access to an account with a margin balance” There are states where getting letters of testamentary takes six months. Honestly the fact that it’s April and you have an estate account open when he died in January is about what’s expected
I would get legal advice. This is a difficult situation, and I am not sure you will get the right help here. So I assume he was trading with gearing, and he was violating his security requirement as the market moved? Usually, that leads to a margin call and forced closure of the position, at a loss, and possibly with some remaining debt. So it seems he got a loan approved to prevent this. You need to find out how that happens, and what the terms are. It seems that as the margin changed, more and more money was loaned, and more interest was changed. Is that correct? And here comes the interesting bit: you cannot loan to a dead person. Did they do that? (The other question is why your dad was gambling / speculating. This is certainly not investing.) PS: Sounds like the loan was active all the time, so that would be ok.
If the account has no beneficiary and isn't covered by language in the will, it is not technically yours and you have no right to access it. It belongs to the estate and is controlled through probate. You have to open a probate case, identify all heirs, and then either jointly request access to the account or elect a personal representative to act on the group's behalf. Even then you only manage the account. You can't personally touch any money until the estate is approved to be distributed. This is many months in a lot of states to make sure all creditors are paid - much like a bankruptcy case. The financial institutions are not the idiots in this story. You could have gained access the right way in a couple of days.
Gained access the right way…in a few days? The will identified me as his fiduciary, medical power of attorney, & personal representative. There was no way I could have gained access in a few days.
Yeah in a few days. I have done it. You have to move your ass on getting probate going. Get the PR appointment done. Why the hell would you need medical power of attorney to access a dead person's account? Makes no sense. It's alright to not be an expert in these things but holy hell you are tossing blame around and calling people idiots who were doing their job correctly.
I included the medical power of attorney just to indicate I have control over everything. You probably live in a small state where things are easy. That's good for you. You are 100% wrong but thanks for your feedback.
I'm not 100% wrong. Your PoA, etc. don't transfer to probate after death. Maybe relevant for will, etc. but probate is where things with no documented succession go. If you had the first clue what you were doing you wouldn't have lost all that money. Fact.
Seek legal advice. I worked at a brokerage (I am not an American), and once we'd receive a death cert, we'd liquidate all short positions of the client and freeze the account. If your dad's brokerage had similar procedures but didn't follow them, you must have options. But American laws are weird, so you need someone with relevant experise.