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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

Content is the opinion of the author and does not represent the position of any other person or entity. Information is from sources believed to be reliable but cannot be guaranteed.

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Recovering damages for bad advice

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.

Q: My father's financial adviser recommended putting his life insurance into a revocable living trust. We now know that was bad advice so now each of the children gets $36,000 less due to taxes that could have been avoided.

A: Unfortunately, mistakes promoted by people who were primarily sales agents rather than estate planners are common. In most cases only your father could bring a legal action against an agent or adviser for the financial damages caused by bad advice. Of course that is impossible now that he is deceased. Now at least four states including Florida, California, Pennsylvania and Illinois allow the children or heirs who are affected to bring similar actions. Since almost all advisers are required to maintain errors and omission insurance, there is a viable source of financial recovery for the error. Make sure to use a combination of financial adviser and attorney to pursue the action. Use the adviser to document the error and subsequent loss and to serve as an expert witness in the unlikely event that a hearing is necessary. I do offer this service. The attorney will be able to identify the proper forum, parties and procedures to best make the claim for recovery. If you have an attorney, then stat there. If not, ask for a referral to an estate attorney.


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