...It has been six months since my last post. 8^)
More detail to come, but in a nutshell:
In July, I stopped paying my mother's bills (see letter, below, to my brother Jon and to my mother's investment manager, Fred, for more detail). Made sure the files were in a reasonable state of organization, packed 'em up, dropped them off at her hotel, and filed the change of address forms. The final straw was that she accused me of identity theft, which is a class C felony. I CC:d my mother on the letter.
I worked long and hard on the tone of this letter (with some help from my brother Mark) to make it as clinical, informative, and detached as possible, rather than letting my anger out. I took great pleasure in cc:ing Fred, who (as her investments manager) was in a position to help her -- but also because, as someone outside the family, I thought of him as something of a "fair witness".
All bank names, addresses, etc., have been munged to protect the willfully passive aggressive (as usual).
7/30/08
Hello all,
As I discussed via email with Jon earlier this week, Elizabeth’s finances are now certainly in need of seasoned professional oversight. In a phone message she left for me on Monday 7/28, Elizabeth made it clear that she feels strongly that I should no longer be paying her bills.
I was able to manage the job adequately (certainly far from perfectly; it’s been a very busy time for me) for about five years. I began doing so when her previous system broke down entirely, due to the sudden death of one of the people she’d hired to do the job.
Elizabeth inexplicably started to use the RT Bank account for her own checking (the same one I’ve always used to pay her bills) after having used one of her DCS Bank checking accounts without incident, for years. The checks she’s been writing are not for her bills, but apparently to cover incidental expenses at the hotel. In fact, the number of checks she’s been writing off of the RT Bank account, and the amounts of the checks, have varied a lot, so it’s been difficult to predict the amount of activity. It became quite difficult to know how much money was in the account; it’s only retroactively, when I’ve received the statement, that I’m able to ascertain what checks she’s written. I requested that go back to using the DCS checks, but to no avail.
At the same time, I’ve been reticent to ask Fred for larger or more frequent disbursements, even though I’ve been alarmed at the escalating amount of money which is being spent. Therefore, I tended to sometimes keep rather low balances in the account --- certainly not a good backdrop for the escalation of Elizabeth’s writing her own checks on the account.
As a result of this lack of clarity, an electronic payment to Elizabeth’s mortgage company for the B. Road house (C. Mortgage Co.) was not honored a few weeks ago, due to insufficient funds. Rather than attempt to collect again electronically, C. Mortgage Co. made the decision that they now wanted to be paid via paper check. However, they didn’t manage to send a notice about this fact to Elizabeth, care of me, until last Friday. The mortgage crisis can’t help their confidence any, I’m sure.
In the meantime, RT Bank froze the account, due to possible fraud. Elizabeth left me a message about this fact yesterday. There’s plenty of reason for the bank’s suspicion. The IRS has started garnishing a fixed percentage of her stock dividends, as her taxes are in arrears by several years, and has probably been in contact with the bank to ask a few questions, certainly raising suspicion; etc. Elizabeth received a notice a few months ago from the IRS stating that she owes $156K; I have made both her and Jon aware of the IRS letters, and sent them on to Elizabeth. This is not the first time that the IRS has contacted Elizabeth about her back taxes. At the same time, Elizabeth hasn’t set foot in the bank in years, to my knowledge, and is so not a “known quantity”, as she might be at one of her Martha’s Vineyard banks.
Regardless of all of these unusually complicated circumstances, Elizabeth left a message on my answering service yesterday suggesting that she believes the problem was caused largely, if not entirely, by my negligence --- or worse. I think you will agree with me that it is long past time to call in a highly experienced professional financial team to handle her affairs.
Fred, perhaps you might be kind enough to draw on your broad expertise and assist Jon in locating a top-drawer accounting firm to work with Elizabeth’s accounts --- preferably one with excellent tax attorneys attached to it. Stowbrook Business Services (see addendum) has handled Elizabeth’s taxes most recently, but not for the last several years; further, their services seem most geared towards the small business owner, and so are likely not the best choice here. There are plenty of things which need ironing out which extend far beyond this one episode in scope: her delinquent taxes, my grandfather’s long-neglected estate, Elizabeth’s own estate planning, etc.
In the meantime, getting a payment to C. Mortgage Co. (account # X) for $6259.16 (two months’ worth of mortgage payments) should be the first order of business. Further, determining whether a recent payment to American Express cleared (account # Y, check #xxxx, for $9595.26), as well as another, to Elizabeth’s health insurance company, (X Health Insurance Co., account #Z, check #xxxx) would be an important step. All of the other payments which are likely to have bounced due to RT Bank’s freezing the account aren’t critical and can certainly wait until a new account is opened, or until the RT Bank account is un-frozen. In the meantime, please be advised that I have filed change-of-address forms for Elizabeth and all of her mail will now be sent to the hotel.
Thank you for all of your help.
Sincerely,
Elise
Just before I sent the letter to the three of them, I sent the below email to my brother Jon. I didn't get a detailed response (although he did send an email back, saying "yeah, this is ridiculous") --- which is part of why I felt I had to write the letter above, in all its formal grandeur, and get it out the door as soon as possible.
So I thought you should know the latest with mom. She used to use a different bank account for writing her checks than the one that I use; she also used to write very few checks. Both of those factors have changed. She switched over to using the RT Bank account rather than one of her MV accounts, who knows why. I asked her not to, but she persists. I guess I will just have to leave a huge margin of extra cash in there in order to provide a cushion for whatever checks she writes in a given month.
Anyway, she wrote a bunch of extra checks awhile back, and the automatic payment on her B. Road mortgage bounced; I had no way to know those checks had been written until weeks after the fact. Then, rather than C. Mortgage Co. send me a note saying "start paying this mortgage payment by check", they just allowed me to continue thinking that the next payment would be electronic. I contacted Fred for an extra deposit, as there was a much larger health insurance payment due ($10K, due twice yearly. It has more or less doubled compared to before).
So the long and the short of it is that the loan went into default...and THEN they sent me a letter saying "pay 2 months' worth of mortgage, NOW, please". I received that letter on Friday. The loan is only one month behind, but they're pretty touchy about it all right now, given the loan crisis.
Anyway, I was in the process of sending out a check today, but I just got a phone message from mom saying that C. Mortgage Co. had called her, that she had "written a check over the phone" to them; she left a confirmation number with me.
Fun little added zinger: in her message, she said "This is really important. This is the house that I had been thinking about giving to you in my will". Unbelievable...this after I've told her many, many times to "please sell the house". If her expenses keep going the way they're going, she might have to (and of course it would be in an up-against-the-wall scenario in a crap market, rather than what could have been accomplished a few years ago in a relaxed manner. Classic).
She told me she'd like to relieve me of paying bills for her. As you and I have discussed before, I don't know if any accountant worth their salt would take it on. Would she be able to give such a person clearance to request funds from Fred as needed, etc., as I do? Would they put up with her writing checks on the same account and calling with bizarre comments and requests? What about calling providers, like the cell phone company, and pretending to be her in order to transact routine business (remember I had to do that last year, I think? I seem to recall you were in on that one).
Probably not.
The other factor for me is that I have continued to do what I've always done since I started paying her bills in 2003 or so, with her blessing --- write myself a check for $12K every year (the maximum untaxed gift amount) --- even though she and I aren't in touch. That represented a huge percentage of my income even when I was at (my former teaching job at a private high school), and this year, probably even more. I have a feeling that if I were to stop paying her bills, that chunk of change would no longer be coming my way. In the long run, it would probably be a small price to pay for the added sanity, but in the short term, it would be a huge hurdle to overcome.
Another thing you ought to know about: the house insurance on the B. Road house in also endangered. The insurance company has wanted to get in an inspect the interior of the place for a long time. I've never heard of such a thing, but apparently since MV is considered a "high risk" area for storms, it's insured under a special program. I have called and written and told them that I left a key with Ken at X Local Insurance Co. a few years ago, told Ken they were likely to be in touch, and a call to Ken would make it possible for them to gain access to the house. Apparently, that's not good enough; they want somebody in the house that they can just call and say "We'd like to come by next week on Tuesday at 1 pm. Be there".
So the Y Insurance Co. has been sending out notices saying that this is a problem. They've started to send notes about the N. Avenue house now as well.
I'm at a loss, Jon...do we hire a caretaker without her knowing about it? She never seemed to support having one before. The houses are going to hell...and now this insurance thing. It's been a problem for a long time, but it seems that it's really coming to a boil now.
I honestly didn't think that things could get any worse, but then she started using the RT Bank account for check writing. If there's a way to make a mess worse, she WILL find it, I guess.
I believe I also told you about the IRS's June letters, demanding $158K in back taxes and penalties? Things are coming up roses just about everywhere.
Looking for your input...sorry to write with this preposterous pile of silliness...
