They'll probably redeem them and you'll have your money in a few weeks. But they're private investments so you can't just sell them at a brokerage most of the time, you have to contact the investing company/REIT.I’ll ask forgiveness up front if this is long. Im not good at being succinct.I am the executor of my father’s estate and thus in charge of liquifying and distributing his assets.
However, 2 of his investments are Northstar Healthcare and Smartstop Storage, both REIT accounts. I don’t know what idiot advised him to invest in these as five minutes research would have revealed how risky they are.
I’m incredibly frustrated as it seems there is no recourse, even when the investor is deceased. The investments were made through Ameritrade. I submitted all the paperwork over a year ago and all but these 2 were transferred to me.
When I questioned it they said these were a different type of investment, not giving any details, and there was something else they had to do, but it was on their end. I admit I put it aside while I dealt with other probate matters, but I don’t think it’s my job to keep after them to do theirs. In the meantime, of course, they’ve been bought by Schwab.
Now that this is the last thing on the list I called to find out what the status was. After 3 weeks they finally transferred them to me and then said to contact the Alternative Investments Dept. They then said I had to contact the companies directly to request redemption forms, and they couldn’t even give me contact info.
I received replies from both companies that redemption has been suspended indefinitely. Note that neither has been paying dividends, which after researching on my own I understood to be a requirement to qualify as this type of investment. What makes it worse is that redemption for Smartstop, which is the bulk of the shares, was open early last year when I first made the request to Aneritrade.
But of course Schwab says they’re not responsible for anything that happened before the merger was completed. So now we’re stuck with shares of a terrible investment we didn’t make.
I don’t understand how any of this is legal or why there isn’t some exemption when the investor dies. There are lawyer websites that claim there are options, but I don’t trust lawyers, and I’m concerned that even if they could do something they’d take most of the payout in fees.
There are class action lawsuits against the advisors, but my dad didn’t keep any of the original paperwork. Any advice on this is greatly appreciated. I’m heartsick that I’ve had to tell my daughter we may be out $35,000.
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I am the executor of my father’s estate and thus in charge of liquifying and distributing his assets.It's legal because your dad bought an illiquid investment and you inherited it. There are far less liquid investments than this REIT probably is. I know of at least one real estate fund that plans to run for 25 years even if half the investors die in the mean time. Their heirs will also be along for the ride.
Statistics: Posted by White Coat Investor — Wed Feb 12, 2025 10:01 pm