By Rick Boettger

Cynthia’s brothers died. She inherited a surprise ton of money, and we no longer have to save our own cash to support them. But for me, it has been absolute HELL.

“Ahh, what an effete rich person’s whine-fest, bleagh,” you might think. But I come like the Ancient Mariner to warn you of the Terrors of the Deep brokerage account. I have just endured six months of exotic therapy for lost sleep and exorbitant dermatology for maddening itches. You need to know how you might suffer due to the perfidy of Wealth Management—and exactly what you can do about it.

Cynthia’s older brother, Conrad, had $3 million in a Merrill Lynch account with a Transfer on Death (TOD) designation to his spouse and three siblings. He died on December 30, 2025—at least ten years before expected. His heirs were 87, 85, 81, and 77 years old. Yet, his broker held onto the account until June 25. During those six months of brokerage limbo, his younger brother died, and his older sister suffered her fourth, aphasic stroke.

Conrad was sharp—a nuclear physics PhD. He assumed a TOD meant he would avoid probate and his brilliant investments would be Transferred to his loved ones, well, upOn Death.

Why weren’t they?

Because brokerages have the legal right to hold a deceased client’s assets in a cash account. Of that $3 million, $1.6 million was sitting in a zero-interest checking account. No sane investor would ever choose this. (Proving the point: when the funds were finally released, two of the receiving brokerages immediately moved their $400,000 shares into 3.5% money market funds).

Once Conrad’s health began declining after a series of strokes four years ago, his broker simply started rolling over his maturing bonds and CDs into cash. They were enjoying the banks’ and brokers’ ultimate easy-money dream: the “float.” This is the difference between the 0% they pay their client and the 3% to 5% they safely earn themselves on your money. Everyone sees a microcosm of this when they deposit a large check and can’t use the funds for 5 to 7 days. The banks are “floating” it, and it is a massive source of their income.

I discovered all of this within days of Conrad’s death and immediately started urging his broker to, well, start transferring, damn it. His beautiful, charismatic, long-time broker was evasive. She refused to put anything in an email, and she ignored every follow-up note I sent summarizing our increasingly uneasy phone calls. The brokerage declined to accept his death certificate. They wouldn’t explain why the account wasn’t transferring, nor would they provide the legal basis for their stalling tactics. They utterly ignored questions about the massive cash position.

This drove me nuts. I knew this had to be wrong—perhaps even felonious. I felt it was my job to protect the family from this outright robbery, swallowing almost $50,000 in lost interest just since his death. The other heirs consisted of a brain-damaged alcoholic, an art museum curator, an Italian occupational therapist, and an English major. I was the only one who could do algebra.

Furthermore, I have kicked ass at the IRS tax court (both federally and state), the IRS Criminal Investigative Division, the FDOT, state parks, Monroe County, and the City of Key West. On my white charger, surely I could slay this dragon, no?

NO.

I searched Wisconsin statutes and FINRA regulations, picked the brain of my best AI, and tried to find a brokerage-killing attorney. Finally, I settled on the best trust lawyer I’ve ever met—a $700-an-hour guy I’d worked with previously on a high-end client.

Nada. Zilch. Sucking fiery dragon breath.

As it turns out, the laws are written by the brokerages, for the brokerages. In Conrad’s “commission” account, the broker was held only to a “suitability” standard, which means almost anything goes short of outright theft. Even if he had been paying a 1.5% principal fee, the “fiduciary” standard is so murky you’d need a sympathetic judge and a miracle to win.

I have never felt so thoroughly fucked. I’ve handled huge sums for big clients over the last 25 years, but nothing ever kept me awake or gave me hives like this. I was reduced to a beaten puppy, afraid to pointlessly challenge the brokerage lest they hold the assets hostage forever.

I actually ended up feeling a bit sorry for the broker. She’d probably get fired for not complying with corporate greed. I’m not exaggerating. One of my revered mentors, the late Nils Muench, once tried to help a lady friend get a better broker after discovering her current one was financially screwing her. Nils asked his own 40-year Merrill Lynch broker to handle her account the way he handled Nils’ portfolio. His senior broker ashamedly admitted, “Nils, if I handled a new client the way I do you, I’d get fired.”

If you doubt this, read Michael Lewis’s Liar’s Poker, or dig up old articles from Conde Nast’s Portfolio on the perfidy of brokerages. You see endless “Wealth Management” ads showing attractive, successful couples getting wise, friendly care. They never mention making money for you. Their business model relies on using your money to make money for them. Turn an AI loose on the subject if you want to kill an afternoon with poison.

To beat the system, you have two choices:

  1. Spend the money on a series of basic grantor trusts, and do the administrative work. (This wouldn’t work if you have dozens of beneficiaries, as we have.)
  2. Open simple bank accounts and put trusted people down as co-owners—not beneficiaries, as bank TODs are entirely subject to this same abuse. Of course, this second method requires a decade of careful searching to find and groom younger people you can actually trust to co-own your money.  Write the checks, they sign them, you put in addressed envelopes, and when you die, they mail them off.

The co-ownership method works for me. But to be honest, I don’t know if I’ve ever met anyone else willing to set themselves up the way I have.

So, I guess I’m less the warning voice of the Ancient Mariner, and more like the frantic scientists in Don’t Look Up, screaming about Earth’s terminal asteroid. Sorry about that.

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