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In this podcast, Motley Fool retirement expert Robert Brokamp and Motley Fool co-founder David Gardner bring us ghoulishly chilling tales of frightful scams, legal guillotines, and savings-depleting poltergeists. But, along with every tale of fright, comes a lesson and a warning, to help you beware these dark and malevolent pitfalls. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. A full transcript is below. This podcast was recorded on Oct. 21, 2025. David Gardner: There's that memorable opening scene from Twilight Zone the movie. Two guys telling each other scary stories. You remember it? One of those two is Dan Aykroyd, and check it the other is Albert Brooks driving down a rainy highway at night. Hey, man. You want to hear something scary? He tells his buddy in the car a scary story. Makes a scary observation. Then his buddy thinks about it for a moment. Raining, going down the highway, chirps back. Yeah, that was scary, but you want to hear something scarier? Eventually, it gets to a point where they say, you want to hear something really scary. He pulls the car over, and, well, I won't give away the ending. Although seeing it as a kid, the year was 1983. I guess I was 17. That's the last time I've seen that movie. Indeed I did find that ending to that scene was really scary. Well, I'm not Albert Brooks, and I don't have Dan Aykroyd this week, but I've got the next best thing. The Motley Fools Robert Brokamp, longtime retirement expert, and storyteller extraordinary. It is the scary month of the year, which means in what is becoming a rule Breaker investing tradition, I have the Motley Fools retirement expert, Robert Brokamp, to tell some really scary stories. Now, we're a money podcast, as you might expect, so what scares us are financial horror stories. Financial horror stories, Volume 4. Only on this week's Rule Breaker Investing. Welcome back to Rule Breaker Investing. It's getting scary. It's getting scarier. We're approaching one of everybody's favorite holidays of every year, it seems. It does seem as if Halloween starts a little earlier every year. The decorations I start seeing people's skeltons and zombies. Some of them are animated these days out on their front yards. It's like early September. Which means next year, it'll be late August, and I'm not sure in time if you play it forward. It's just Halloween all the time in the United States of America and wherever you are, since about a fifth of our listeners are outside the US. Welcome to Financial horror Stories Volume 4. I'm really chuffed to be joined once again by my good friend and longtime fellow fool Robert Brokamp. Robert has promised again, I think it's going to be another half dozen financial scary horror stories. That is the focus this time of year every year on this podcast. I do want to mention next week, it is the Rule Breaker Investing Mailbag. Our mailing address is [email protected]. You can tweet us on Twitter X at RBI podcast featuring your stories, best questions, thoughts, scary thoughts are welcome, scary stories too, next week's Mailbag, write early, we often [email protected]. Now, before I welcome Robert on, I think you need to know two things. The first is that all of our stories on this podcast and really all the other episodes in this podcast, this is the fourth. That means we're about to go over 20 stories if you add them all up and all of them are true. It's one thing to make up a Twilight Zone story and make it really scary, but isn't it even scarier, really, when you think about it when it's real and when it's true? So that's the first thing you need to know. These are true. The second thing is, we're not just here to scare you. Robert always brings along with him a takeaway or two to help us all get a little smarter, happier, and richer, which is, after all, the purpose of the Motley Fool, not just to scare you at this time of year on this podcast. A couple of preamble notes. I also want to flash out that my talented world class producer, Bart Shannon will be listening carefully to each of the stories you're about to hear. In fact, I'm going to ask Robert in a sec to share his table of contents up front so that Bart, as he's listening along and planning the post production for this podcast, so he can have the appropriate bespoke sound effect for you our listeners that will evocatively lock down that story forever in your minds thanks to the sound effect that he brings to that story. Bart listened carefully and Robert Brokamp, welcome back to Rule Breaker Investing. Robert Brokamp: Holy, shame and cream. It's so great to be back, David. David Gardner: It's great to have you back, my friend. You just heard me promise, I think the same thing I promised this time every year, Robert, which is, well, first of all, how many stories have you brought? Robert Brokamp: I brought six. David Gardner: Excellent, and do you have titles for those stories? Robert Brokamp: Here we go. Number 1, it's the Chimera of Omaha. Number 2, the Vanguard vanishing. Number 3, Helter Shelter. Number 4, invasion of the crypto snatchers. Number 5, I know what you signed last century, and Number 6, a nightmare on Margaritaville Street. David Gardner: Excellent. I will say, I listened back to our last year's talk together, our financial scary stories, and you left us on a positive note, a happy ending, Robert. Robert Brokamp: Yeah, I'm not sure this is gonna be quite so happy. [LAUGHTER] If there's a lesson, there's a lesson that will make your life better. We'll say that's a happy ending. David Gardner: Well, without further ado, I think story Number 1, Robert is entitled The Chimera of Omaha. Robert Brokamp: Yes, well we here at the Motley Fool love a good Warren Buffett quote. When we had an office, we had a Buffet quote written on one of the walls, and an entire room named in Buffett's honor, what's even better than a Buffett quote? Buffett himself telling you about a great investment opportunity, fantastic returns. All you have to do is buy a certain stock or even better, go to this website and buy the investment there, but unfortunately, once you transfer some money, it disappears as quickly as a box of Sea's candy at a Berkshire annual meeting because that wasn't Warren Buffett giving you investment advice. It was a fake AI generated video, and the scammers made off with your money. Or it may have been just a version of the classic pump and dump. The scammers buy a small thinly traded stock. They created some hype to cause the price to go up and then they get out near the top. During the 2024 Berkshire Hathaway annual meeting Buffett talked about seeing some AI generated videos of himself and said he didn't think his wife and daughter could tell the difference that it wasn't actually him. He said, actually, if you were interested in investing in scamming, AI is going to be the growth industry of all time. Videos aren't just of Buffet. These are being done with all kinds of executives and celebrities, a fake video of Elon Musk promoting a scam that need Narra Dowell's millions of dollars. One person who fell for it was an 82-year-old retiree named Steve Bouchamp who told the New York Times, the picture of him. I was him. Mr. Bouchamp liquidated his $690,000 retirement account and invested in this deep fake Elon Musk cryptocurrency scam. Some of these videos are celebrities announcing a giveaway, others, they're selling something. There's a deep fake video of Taylor Swift giving away cookware, and of course, you go to the website. You give some information. They either use that information to rip you off or when you click on that website, takes you to a place that then installs some malware onto your computer. Of course, there's the more targeted deep fakes, for example, grandchildren reaching out to their grandparents, saying that they've been in an accident and they need some money to be sent to them immediately. David Gardner: This is obviously something that all of us have heard about for a while. As you're pointing out, this basic scam, Robert, before it was deep fake videos, it was telephone voice mails maybe, and before that, it might have been in a chatroom online or maybe just good old fashioned snail mail. This probably is never really going to end because the human instinct to swindle somebody else probably will never go away. Deep fake videos, though, a lot more persuasive than a cheesy snail mail letter. Robert Brokamp: Yes. I think the lesson here is there used to be the saying trust but verify. I think nowadays, it basically is don't trust, always verify with at least three sources because it's just going to be too easy to fake voices, to fake videos, to fake communications. Before you do anything especially related to money or your personal information, confirm that the person is who they say they are. David Gardner: One of the most basic things and I occasionally see this when a bank gets deep faked is they'll always say, make sure you call us at the bank. If you thought we left you a voice mail and it seemed a little strange or if you got something in the mail supposedly from our bank and it didn't look like our logo, just always check with us first because we know what we've issued and we can tell you whether it's from us or not. You're saying check three times. That would be my first check. Robert Brokamp: Don't use the phone number that's in the email or text. Don't click on the link that's in an email or text, go directly to the bank's website, your broker's website, whoever, or use a number that you know is accurate. Another thing to be aware of is what these scams often do is send you somewhere private, like, for example, Whatsapp, telegram, maybe even a private YouTube channel, that's a pretty bad sign. David Gardner: Thank you for that. Robert, have you yourself ever been deep faked? Robert Brokamp: I have not, but my wife, back in the early days of the Internet did fall for a scam where she received an email that she thought was from our bank, clicked on it, entered some information, and money was stolen and sent to Italy, and it got us on the Today Show back in the early 2000s. David Gardner: Oh, my golly. I forgot. I forgot that. That's remarkable. You did lightly reference something that's meaningful for us at the Motley fool, which is that as a company that has now gone pretty much fully virtual, our office space, a little scary for some of us, our office space is disappearing altogether. We're still the Motley Fool. We still have several 100 employees, but we're all in different places now without a central meeting place, and that is a change that I think in a lot of ways, COVID tipped off for many different organizations. I think a lot of organizations are trying to figure out what to make of their commercial space downtown Washington, DC just within sight of full HQ remains pretty quiet in a lot of ways. A lot of white collar jobs can be done at home. You and I are doing this podcast from our respective homes. Yours is a more attractive looking background than mine. You clearly played the guitar. Robert, I see you have what looks like a Santa Claus gesture cap on one of your shelves behind you. I would say even your shelves are organized. I think you're doing a better job working from home than I am. Robert Brokamp: I don't think that's true at all. I'm just sitting here in my basement. I've been to your house, your house is lovely plus. I have tons of games, which is a lot more fun than what I have, [LAUGHTER] but another thing you mentioned working remotely, some of these scams are communications coming from executives in your company. We here at the Motley Fool. Have received emails that have come from you or Tom, your brother, our CEO, saying, I'm reaching out to you for this or this or this. That does make it easier to do that when you're not in the same building as the CEO. David Gardner: Really great point. Any other takeaways, Robert, or are we moving on? Robert Brokamp: I think we hit the highlights. The other thing that people are recommending, especially with the personal situations or if you are an executive talking to other executives, is if you get a call that's a little fishy, ask for information that only that person would know and couldn't be pulled from social media, don't ask for your dog's name if you have all posts of your dog on Facebook and if you're really concerned about having a password ahead of time. If you get a call, and it seems that you say, what's the password, just to make sure. David Gardner: All right. Ready for everything. Thank you. Let's move on to story Number 2. You have then entitled it, The Vanguard Vanishing. Robert Brokamp: Yes, imagine that you have settled in before your computer and you log into your wife's Roth IRA. Unfortunately, it has dropped in value, I mean, really dropped because $120,000 worth of investments is missing. That, according to a New York Times article, is what happened to TN Tran when he checked in on his wife's IRA at Vanguard, but the investments weren't gone for good because Mr. Tran discovered the scam in time. The investments were actually sitting in an IRA at Merrill Lynch. What happened is the scammers opened up an IRA in his wife's name at Merrill Lynch and then requested that the investments be rolled over via what is known as the automated customer account transfer service, otherwise known as ACATS, which is the system that firms use to move money and investments between one another. Fortunately, this reader discovered the crime soon enough and the investments were returned within a week. Unfortunately, this type of ACATS fraud is on the rise because the truth is, it doesn't take that much to open a new account online. It doesn't require a credit check and freezing your credit won't prevent it. Now to request a transfer from another account, the scammer has to know enough information about the person and sometimes some information about the investments, which can be done through maybe some security breach or just grabbing a statement out of the mailbox or the garbage. The transferring firm may or may not send a notification that there's been a request for a transfer, and even if they do, account holders often don't really read it because of all the email and the snail mail that we get. David Gardner: Yeah, and this is a brilliant move, and it does make sense why it would work because companies want us to open up new accounts. Generally, we want to open up new accounts. Companies don't want us to close accounts, and so setting things up in a world where more accounts are opening for people that are not real, there's not a lot of pushback against that. Robert Brokamp: We've all done it. We've all opened up accounts very easily online. Many companies make money that way. We at Motley Fool have a whole website dedicated to helping you open accounts, choose credit cards. It's a great service. You should be choosing the best accounts and credit cards for you, but they also do want to make it easy for you to open those accounts. That the transfer is so easy is really quite remarkable. I guess it gets back to what we talked about earlier and that we're all working remotely. We're all doing things remotely. You don't have to go into a bank or the local Schwab or fidelity office to do the transfer. You have to provide some form of ID, but as we talked about in last year's episodes, it's actually pretty easy to create a fake ID and take a picture of it and send it to somebody and they're like, you must be who you say you are. David Gardner: Yeah. The reality is that 99 point I'm going to go with 0.8% of every account open today worldwide and there were a lot, were all legit. Most people are good people just trying to do the right thing, but it is the trickle of bad people that can magnify their trickle through technology that starts messing with systems like ACATS an acronym that otherwise I never would have been able to explain or understand, but, Robert, that's part of the reason I love having you for this episode every year. I'm curious. Was this a story in the New York Times? Robert Brokamp: Yes, very recently, in the New York Times. David Gardner: Are you like keeping your eyes out, waiting, just chomping at the bit each second to last Wednesday of October to come back on this to share your voluminous reading and what you found? Is that how it works? Robert Brokamp: Every year, I create a document, and throughout the year, David, I put in ideas for this show. Even though we're only talking about six, I probably had about 30 to choose from, but I just chose the ones that I think are the most interesting and slightly different. As we talked about before the show, the stories change, but the lessons are often the same. Especially when it comes to these types of scams, it's protecting your information, protecting your identity, and being very careful about any indication that something is amiss. In this example, people do get notices in the mail that something is going on with their accounts, but they throw it away and it may have been from a firm that they don't have any business with, they think, it's just a solicitation, but actually, it was the firm saying like, oh, yeah, thanks for opening an account with us, but of course, you weren't the person who actually opened the account, but you didn't open that letter. David Gardner: All right, well, you source the stories from many different sources, but the alluring alliterative titles come solely from the mind of Robert Brokamp. Let's move on to story Number 3. He's entitled it Helter Shelter. [NOISE] Robert Brokamp: There's an old saying in the investment world, and that saying is, it's not what you make, it's what you keep. In other words, Uncle Sam will often take a bite of what your investments earn so many investors will take steps to reduce their tax bills, even paying professionals to help them. But sometimes the cure is worse than the disease, which brings us to the story of Florida based financial advisor Stephen Mellinger who was sentenced to eight years in prison earlier this year for stealing clients' money and orchestrating an illegal tax shelter over a 10-year period. Basically, Mellinger helped clients claim $106 million in fraudulent tax deductions through what the authorities called a circular money flow disguised as legitimate royalty payments while collecting three million in fees along the way for himself and a relative who was a co-conspirator. Basically, this is how it worked. Clients would transfer money to accounts controlled by Mellinger and they would be able to write them off as business expenses, and then Mellinger would put that money in accounts that were controlled by the clients. Basically, they were saying they were spending this money, taking the deduction, but they still had control of the money. It ultimately cost the IRS, which of course, really cost taxpayers $37 million in lost revenue. Now, many of these clients were owners of what are called compound pharmacies, which are basically they fulfill custom made prescriptions, something that I didn't know existed until I learned about this story. But after some of Mellinger's clients told him that they were under investigation for healthcare fraud, as well as the IRS taking a look at these tax shelters, Mellinger basically stole some of their money that was in these accounts using part of it to buy a house in Florida. Mellinger and his relative didn't ask the loan, a CPA in Indiana was sentenced to three years in prison for helping file the fraudulent tax returns. David Gardner: It feels like there are no heroes in this one. Whenever I watch a new streaming series with my wife, Margaret, it largely comes down to this. Is there someone she can root for? If it's some slightly dystopian, funny story like Breaking Bad, and she can't really find anyone to root for, she ends up not watching it, and then I end up not really watching though I did finish Breaking Bad, because I want to watch shows with her, I'm not going to sit there and just binge myself. I'm looking for the hero here. What I'm seeing is clearly Mellinger is a villain, but it does also seem as if his clients were aware. Did I hear this right? They were benefiting from something that they were aware was illegal. Robert Brokamp: Well, that's an interesting question. I tried to do some research on what happened to them and I couldn't find anything about that. I do think that it certainly was fishy, and so that's one of the takeaways here. If you are participating in anything that feels fishy tax-wise, you definitely want to get a second or third opinion because I talked about what happened to Mellinger and the CPA. I'm sure that these clients also paid significant amount of money in terms of penalties, fees, interest, and if the IRS could prove that they knew it was fraudulent, they'd probably maybe even serve some jail time. What people will often hide behind is the fact that, when my CPA said that this was OK. David Gardner: That's why I hired them. Robert Brokamp: Right, but the bottom line is and the lesson also from this is that taxpayers are ultimately legally responsible for the accuracy and the legality of their tax returns, [laughs] regardless of what their CPA or their enrolled agent or EA had told them. When you sign your tax return firm, you are saying, I think this is true regardless of what you were told. It would be very interesting to know what happened with the clients, especially with anything that has the hint of a tax shelter, the IRS will keep an eye on because there's so much abuse of these types of things. David Gardner: I'm still looking for the hero in this story. I'm picturing some investigative journalists who somehow was maybe, I don't know, a friend of a friend and bumped into Mellinger, I don't know in an elevator and all of a sudden confronted him. Was there anything in the source that you were checking revealing the gum shoo who detected this all? Robert Brokamp: No, I think they were probably just the good, hardworking, but anonymous folks at the IRS and the FBI who figured this out. [laughs] David Gardner: It seems like they probably never really get their due. Nobody really likes taxes, and then hearing that you work at the IRS, you're like, oh, so you're a tax collector. I read about them in the Bible, and the list goes on of reasons that we rarely express admiration for the IRS, and it's even been under fire with some firings like some other government agencies this year. It doesn't seem fully fair. I guess the people who join the IRS know what they're in for, and I think that many are admirable people. You and I live here in the Greater Washington DC area, Robert, are some of your best friends tax collectors? Robert Brokamp: I was just going to say that living in the DC area, I certainly know people at the IRS. You may remember David, Phil Marty, who was one of the early board strollers at the Motley Fool, worked at the IRS for 25 years and was one of the most helpful people on our discussion boards answering tax questions. After he retired, he volunteered for what is the IRS Volunteer Income Tax Assistance Program or VITA and I'm bringing that up because I do it as well every year. If you are out there financially inclined, looking for a way to get back to society, the program is great and the VITA program is looking for volunteers. You don't have to have tax experience. They do the education and everything. That's a little plug for the VITA program. But yes, the bottom line is the people I know who work at the IRS are really good, hardworking people. David Gardner: I don't know that we're going to close story three by saying, hug a tax collector, but how about a pat on the back? Most of them are honorable people trying to do their best, and they're not even celebrated in stories busting scams and let's be clear, these criminals do not turn themselves in. David Gardner: In the Premier League, everyone pushes their hardest to win, and now it's your turn with their EPL fantasy challenge, Coca Cola are giving you a chance to win big by beating the best. All you have to do is build a team based on rules set by an icon. To help you on your way, I've got a tip to help you build your team. Make sure you keep an eye on fixtures. Who are the players up against next? Sometimes it's not about form, like, there are some players that for whatever reason, always play well against certain teams so do your research. To get involved in the EPL fantasy challenge, all you've got to do is grab a coke and scan the code on the pack. Just by playing, you get a chance to win Coke swag or vouchers. But if you beat the icon who set the rules, you could win vintage Coca Cola jerseys, Premier League tickets, and more. Go ahead and get involved. Grab a coke, drink it in. David Gardner: Let's move on to story number four. Did you ever see the movie Invasion of the Body Snatchers, any of them in theaters? Robert Brokamp: Not in theaters, but I've seen them on TV. David Gardner: One of my early theatrical experiences, I remember Donald Sutherland was in this one, so I'm going to say it was somewhere maybe late 70s, something like that. I was young enough to be very impressionable. I still can see with fear in my eyes, Donald Sutherland surprising me in terms of his behavior after he'd been snatched, spoiler alert, I think, near the end of the movie. Anyway, Invasion of the Cryptosnatchers. Robert Brokamp: When you hear about any type of online scam, you probably conjure up some vision of who the perpetrator may be and you may think of some young hacker in a basement or maybe an overseas criminal gang, maybe a Nigerian King. But do you think of North Korea's Kim Jong Un? Well, you probably should because North Korea has emerged as the world's most prolific cryptocurrency thief orchestrating sophisticated heists that have netted more than $6 billion in the past decade, according to a Wall Street Journal article from this April. The country has accounted for more than 60% of all cryptocurrency losses in 2024. A couple of weeks ago, Blockchain Analytics and security firm Elliptic reported that North Korea's crypto hackers have stolen over $2 billion so far this year, almost triple last year's total. North Korea employs more than 8,000 hackers. This is their full time job to use sophisticated techniques, including analyzing social media profiles to create tailored phishing campaigns. They pose as job applicants to infiltrate companies as remote workers and then they try to steal some information. They deploy advanced malware. They know how to break into the crypto wallets. They actually strategically recruit their young kids who are particularly good at math to be part of this program. Why are they doing all this? Well, North Korea needs the money. Given the country's isolation and weak economy, the size of the economy is estimated to be about $30 billion. If you're stealing $6 billion or more, that's a huge boost. Just for the sake of reference, the size of South Korea's economy is almost two trillion, US is 30 trillion. North Korea really needs that money. David Gardner: I read a chapter in a book once, it might have been a Stephen Pinker book, but it was just pointing out the incredible economic disparity between the two Koreas. The way to notice it most starkly is at night via satellite looking down on planet Earth. If you look at Korea, which used to just be capital K Korea, you will notice the northern part, North Korea is completely dark at night, and South Korea, eight, nine, 10:00 pm is completely lit up and there you see the difference between capitalism and communism or whatever we would describe North Korea practicing. It's stark, it's visual, and a lot of us in the developed world take things like electricity for granted, except by the way, Robert when all of the websites go down because Amazon web services all of a sudden malfunctions. But pinch ourselves because we do take so much for granted so much progress has been made. It's sad to think that many of the best minds in North Korea are being wasted or being trained to steal and that's exactly what you described. I'm curious, would you say most of these crypto scams are like story number one, where somebody is actively trying to swindle you by communicating in a way that confuses you, or are we talking about just flat out break through your wallet and take your stuff? Robert Brokamp: It's more of the latter, but it is increasingly becoming more of the former because the folks that are running the crypto exchanges or the companies who own cryptocurrency, they have more rigorous defenses. Individuals who own cryptocurrencies they don't have the resources, they're not always as vigilant. They're increasingly targeting individuals, especially now that so many people have it. I think Bitcoin is up almost 500% over the last three years. It is becoming much more targeted toward individuals. It is more like with the remote workers. The Wall Street Journal article added that a US court indicted 14 North Korean nationals in December for using false identities to secure remote jobs at American companies and that allowed them to funnel $88 million in salaries back to the regime, but also to access corporate networks. Think about that the next time you're hiring some remote worker. David Gardner: Wow. One other way to avoid being crypto scammed is just not to own any cryptos. Do you own any cryptos, Robert Brokamp? Robert Brokamp: I don't. In fact, I was doing a little bit of research for this. I don't own any crypto, and the whole security apparatus around it, there are extra layers of things that you should be doing to protect your crypto because it is not, generally speaking, held at a traditional broker. One of the takeaways here, by the way, is to use multifactor security, but something far more robust than just getting a code texted to you because in some cases, the scammers were able to get access to the texts. In some cases the scammers were basically to have a text sent to you, but they were able to see the text and then use that to break into your account. David Gardner: We've got two more. Now, looking ahead, I don't think I see the Louvre jewel heist in either of your last two stories. Before we move to Stories five and six, Robert Brokamp, any truth of the rumors that you were seen this past Sunday morning in or near the Louvre on a motor scooter? Robert Brokamp: That was not me I promise but if you see a picture of me, it was a deep fake video. That's all I'm saying. David Gardner: [laughs] That's really sad. I think the value of those jewels has now put around $100 million and very likely articles I'm reading say they've already been melted down. The historical value is probably gone because people aren't going to try to sell something that Napoleon wore or one of his wives. They're just going to melt it down and sell up for the material. Do you have anything that you'd like to share about your feelings about France, the Louvre, French cooking, French wines, or jewels before we move on to story number five? Robert Brokamp: Other than that, I love France. I love the Louvre. I love visiting Paris. But I have read articles also that there's this underground network of people who are willing to buy these things and that they may not have to be melted down. There's got to be a demand for that for these people to do these types of crimes, and the demand is out there. David Gardner: That almost felt like hope, but it's sad that we're even hoping for that. [laughs] Thank you for that. Let's move on to story number five. Robert, what have you entitled story number five? Robert Brokamp: I know what you signed last century. David Gardner: Yeah, this one jumped out to me when you said it because it feels like this is either some Wills and Estates. Is it a Wills and Estates? Okay, got it. It reminds me to say that our very first volume of this series three years ago, was all Wills and Estates horror stories for the most part, and especially for the many Motley Fool listeners that may be at or near a point of planning their estate for a lot of us, I hope you've already done it, but if you haven't yet done it, because not enough people do it, which was the point you were making three years ago, that it might be on your mind you might enjoy going back and listening to Volume 1 in this series because whether they were famous people like Prince or not so famous people, probably busted by nameless, faceless IRS people who never get any credit. You'll enjoy Robert's stories from Volume 1. I know what you signed last century. Robert Brokamp: Yes. Gather around as I tell you the story of Jeffrey Rolls and Peggy Losinger who dated for a few years back in the 1980s but ended the relationship in 1989. Peggy went on to get married to someone else, have a couple of kids. Jeffrey never married or had kids. Unfortunately, Jeffrey passed away in 2015. He had around $250,000 in a retirement account with his employer, Procter and Gamble. In the process of settling his estate, Jeffrey's two surviving brothers found out who is going to get that account, Peggy, because Jeffrey named her as the beneficiary on the account back in 1987 when he enrolled in the plan, and he never changed it. Despite the fact that it had been decades since they dated, Peggy has not given up the account. Now Jeff brothers are suing both Peggy and Procter and Gamble, claiming that his brother wouldn't have wanted to leave all that money to Peggy and that Procter and Gamble didn't do enough to let Jeff know that Peggy was still the beneficiary on his account for all those years. But in 2020, a court sided with Peggy, the brothers have appealed. Now at that point, the account had grown to be worth over a million dollars. The case still hasn't been settled. The money has just been sitting in a money market account, waiting for the case to be resolved, but it'll likely go in Peggy's favor. David Gardner: Wow. Usually these stories are about somebody doing something intentionally wrong. I would say someone nefarious. I do not detect anything but oversight, human error, user error, sad. Some of us might think, are the courts in error? What are we doing here? These are his brothers. I was a fling. It was back in the '80s, Robert. Robert Brokamp: Exactly. Yes, when it comes to estate planning, a lot of it just is not having an estate plan. The majority of people in this country don't even have a will. That's the big takeaway here, have an updated estate plan and Jeff didn't have a will or at least a will that anyone could find. He did that of other property. He had a house, collection of used BMWs, couple of cats. By the way, if you have pets, you should include your pets in your estate plan, who you want the pets to go to and maybe leave some money to take care of the pets. But the other lesson, of course, is update the beneficiary forms on your retirement accounts and your insurance policies. Your brokerage and bank accounts might have something like a payable on death or transfer on death designations. You want to update them, maybe keep a record with your estate plan. Then the other thing, of course, is to let relatives know where to find it when they need it. If you were to pass away, would your relatives know where to find all these documents, and you want to make sure you update that on a regular basis? The other thing, just since we talked about crypto too, by the way, there were some other horror stories that I didn't include this year, maybe next year. But what happens to these crypto accounts when someone passes away? Because, first of all, A, the relatives may not even know they were there because a lot of people have crypto on the side, so they don't let people know. Then if they do, can the relatives get access to it? Because it is often more difficult for an executor to get access to a crypto account than it is, say, an account at Vanguard or Schwab or Fidelity. If you are a crypto investor and you have some unique wallet or some unique way of keeping your crypto, anything related to the blockchain, include that in your estate plan as well. David Gardner: Really good point. I'm going to sit here a little bit guilty as charged because while I can somewhat smugly and self-satisfiedly say, Well, I'm not one of those American doesn't have a will or an estate. Let's give ourselves a little pat on the back along with, again, our best friend IRS worker that we're connected to, whoever they are, sometime in the week ahead, a little text. They might work half a world away. Just show them a little love, just a text. While we might feel somewhat self-satisfied and smug, that we have been fiscally responsible, the truth is that I don't think I've done a great job thus far about the document about how to find all the things. That's not necessarily wasn't part of my wills and states process. I guess it's more on each of us, including Poor Jeff, whose story you just told are really more like Poor Jeff's brothers. But, yeah, I think that making sure we're documented and that there is I don't know, what do you do? Is there a little safe somewhere with a key and inside is a note that gives all your explanation? David Gardner: What do you do, Robert Brokamp? Robert Brokamp: With our estate plan, I have on the front page a list of everything we own, all our accounts, all our life insurance policies, who to contact with anything related to the Motley Fool, so that everything is there. We do have a safe, the combination to the safe, and all that. I have hidden that somewhere in our house, and our executors know where to find it. Now that my kids are adults, they know where to find it, too. Now, if my house burns down and I die in the house, that will be a little bit more tricky. I have not come up with. I don't feel comfortable hiding it somewhere outside of my house or having a digital copy hanging around somewhere. I could maybe put it on a flash drive and give it to my executor and backup executor. But then I get a little nervous about, well, where are they going to keep it? What if someone finds it? If my house burns down and I perish with my house, then my estate will be in trouble. David Gardner: That's not going to happen. Let's not even talk about that. But bank faults. I mean, there are safe places that you could probably pay a little bit of money and store things and feel comfortable without sequestering and summer in your house where arguably a lucky, possibly unlucky house guest might just bump into it and say, Robert, what's this? Robert Brokamp: Say the flip side of that though is, as you know, a lot of banks have closed or consolidated, a lot of branches are closing, and then they try to reach out to people and say, we have stuff in your security deposit box and people either don't get the messages or something and everything that was in that was lost. Then the other issue is, if you are going to keep your estate planning documents in something at the bank, you have to make sure that your executor has permission to access that information. Something that happened to someone who works with us at The Motley Fool. She was the executor of her mother's estate. The estate plan was in a safety deposit box in the bank, but the bank wouldn't let her in until she got some legal permission and it took weeks for that to happen. David Gardner: Wow. I will say, I do notice fewer banks out there, and I haven't read a story or followed the numbers, but fewer ATMs. Then I also ask myself, well, how much am I using cash? Not nearly as often as I did before. Back when ATMs, I almost said ATM machines, except that is redundancy. Back when ATMs were ubiquitous, but I find myself sometimes driving around trying to find where an ATM near me is. Robert Brokamp: I totally agree. You and I, when the office is open at The Motley Fool, I chose the bank next door because I wanted that convenience. But now that branch is closed. The Motley Fool office is closed, and I hardly ever go to the bank anymore. David Gardner: Before we move on to story Number 6, I'm reminded since I almost said ATM machine, I'm reminded of a very important concept. I think you can look this one up on Wikipedia. I'm guessing, Bro you don't know what RAS syndrome is. Robert Brokamp: I do not know. David Gardner: It's for redundant acronym syndrome. It is actually a thing. RAS syndrome, any of the phrases like ATM machine where people are unnecessarily saying word at the end are all captured under the rubric RAS syndrome. Robert Brokamp: Of course, when you go to the ATM, what do you enter? Your pin number? David Gardner: There we go. Let's close. I don't know how scary this is, and I don't know what Bart's about to play, but the title is scary. It does remind me that a number of your stories over the years, Bro, through this episodic series, Financial Horror Stories include celebrities. When I see your title a nightmare on Margaritaville Street, I start wondering, is this a Jimmy Buffett story? Robert Brokamp: This is a Jimmy Buffett story. This is our final yarn, and we began this show talking about Warren Buffett, so we're going to close it with talking about Jimmy Buffett. David Gardner: Nice. Robert Brokamp: By the way, they were friends for decades, calling each other Uncle Warren and cousin Jimmy. Jimmy was a Berkshire Atheay shareholder since the early '80s, and he opened the 2007 Berkshire Annual meeting. But they did get a 23 ME test and found that they were actually not related. David Gardner: [LAUGHTER] Love it. Robert Brokamp: Ben Adele, Jimmy Buffett passed away in 2023 at the age of 76. Unlike many of the celebrities we've talked about in past episodes, he actually did have a solid estate plan, and he had recently updated it in 2023, the year he passed away. That was all good. It was complete with a will and a trust. Some of the articles I read said that he had two trusts, but the problems stem from whom he named to be in charge of the trust. And they are Jane, his wife of 46 years and Richard Mosiner, his business manager and financial advisor for 30 years. Two people he knew for a long time, two people he trusted, the problem is, they just don't get along. Jane has petitioned to court to remove Richard as the co-trustee of the trust, alleging hostility, lack of transparency, excessive fees of $1.7 million annually and mismanagement resulting in projected returns of less than 1% a year. For his part, Richard has filed his own lawsuit claiming that Jane has been uncooperative, interfered in the business decisions, and breached her fiduciary duties by prioritizing personal interests. I guess that's because the trust benefits her, but then when she passes away, it goes to the kids. I guess that's what he's alleging that she's not serving as a fiduciary for the kids. I'm not sure. There's a lot of money at stake here. Jimmy Buffett's estate is valued at $275 million, Including 35 million in real property, $50 million in an aircraft company called Strange Bird Incorporated. Didn't know about that. $2 million in musical instruments, $5 million in vehicles. He had a lot of cars, I guess. The most valuable asset is actually valued at $85 million and that's a stake in the Margaritaville Hospitality Merchandising Empire. The problem is that their relationship between the two deteriorated pretty quickly, Jane saying that she was not getting enough information. But it's a difficult situation, because clearly Jimmy Buffett thought that his wife and his business partner will get along this arrangement is not unusual. Many people will name people to either be co-trustees or co-executors thinking that, well, they have complimentary skills, maybe complimentary interest, and they'll be able to work out any difference, but this just hasn't been the case in this situation. It is interesting to think what it must be like to be Jane Buffett. As one expert pointed out in the CNBC article about this, you're enjoying life with your husband. There are no restrictions on your money. You basically spend money, however you want. Your husband passes away and then all of a sudden that money goes into trust and you're no longer in control. The solution here is, obviously, to think really carefully about who is going to be in control of things, get legal advice about how to do it, find an attorney who's been around the block and has seen any potential problems that can come up between people who are settling estate together or managing a trust together. And you might want to add an objective legal fiduciary as part of the team, and in fact, that might be what happens here. A judge might say, neither of you are the trustees. We are just going to put an objective expert in charge and they will make the decisions. David Gardner: Maybe that's what I love most about this series, Robert. Yes, you're here to scare people. Yes, you can do it well, and I love each of your stories. But every time you're bringing the takeaway, a better way. I think this episode gets a lot of pass around. I hope it will, just like the three previous ones, because in addition to scaring Rule Breaker investing listeners, you're most of all, just helping them be cognizant. Sometimes commonsensical things we should all be doing and sometimes things that would exceed our own common sense. They're deep fake videos. They take us to a different level of caution or care North Korea. That's worth studying and learning, too. Admittedly on Rule Breaker vesting, we don't do this very often. In fact, I only really want to be scared about these things about once a year, and there's no one I'd rather have scare me. I want to thank you, Robert Brokamp, for the chimera of Omaha, the Vanguard vanishing helter shelter. Invasion of the crypto Snatchers. I know what you signed last century and a nightmare on Margaritaville Street. Robert, for those who really enjoyed hearing your voice once again on this podcast this week, remind us how else we can find you in and around the Motley Fool. Robert Brokamp: Well, for our premium subscribers, I write on the game plan website, which is more of the financial planning content that we provide our premium members. But for free, you can catch me every Saturday on the Motley Fool morning podcast. David Gardner: Awesome. Thank you for all your work. I don't like to brag about my favorite fools too often, but Robert, what number year is this for you at the Motley Fool? Robert Brokamp: Twenty-six years. David Gardner: . That is truly awesome, and I think so much of the pleasure of life is association built up over time. Fred Reichheld, who teaches at Harvard, wrote a great book called The Loyalty Effect Once, and he said, the best companies, I would by extension, say, probably some of the best stocks that we can invest in are ones where everybody's been around a long time. Your customers are loyal for long periods of time. Your employees are loyal over long periods of time, and your community appreciates you, etc. Robert, you have brought me personally. I won't speak for all the fools listening. You've brought me personally so much joy and pleasure over the years this week, notwithstanding. Thank you very much, my friend. Robert Brokamp: Well, David, you know, I feel the same way. I feel so grateful to have met you and to be able to work for the Motley Fool. It's really the dream job of a lifetime. David Gardner: Well, there you have it. Financial horror stories Volume four coming up, of course, next week, it is your mailbag. Drop me a line RBI at fool.com. In the meantime, have a not totally always scary week ahead. Fool on.
