Widower claims he incurred death tax due to bad financial advice
A Jefferson County man has filed suit against his financial advisors, alleging he was forced to pay more than $10,000 in taxes after being advised to take a lump sum out of his wife's annuities.
Louis M. Saldana claims he met with defendants Wells Fargo Advisors and advisor Lindsay D. Barlow to discuss annuity death benefits following his wife's death. During the meeting, Saldana told the defendants that he did not wish to take any actions that would cause him to incur tax liabilities.
The defendants advised Saldana to select the lump sum payment, saying there would be no tax liability associated with that selection, according to the complaint filed Nov. 5 in Jefferson County District Court.
However on Jan. 12, Saldana received 1099 forms from Prudential Annuities Life Assurance Corp., taxing him for $43,292.80 of the $88,292.80 he received. As a result, Saldana was forced to pay $11,228 in taxes for 2009, the complaint says.
"Had plaintiff been properly advised by defendants, he would not have elected a lump sum payment which caused him to incur this liability," the suit states.
Saldana blames the defendants for causing him to incur the taxes, saying they negligently failed to advise him of the tax consequences and advised him to incur a lump sum payment when he did not want to incur tax liabilities.
In addition, the defendants negligently failed to properly advise Saldana of other options, failed to advise him that death benefit distributions can result in tax consequences and failed to advise him to select contract continuation, according to the complaint.
Saldana alleges breach of fiduciary duty, violations of the Deceptive Trade Practice Act and negligent misrepresentation against the defendants.
In his complaint, Saldana is seeking actual and treble damages, plus attorney's fees, costs, pre- and post-judgment interest and other relief the court deems just.
Saldana will be represented by George E. Bean of Cashiola and Bean in Beaumont.
The case has been assigned to Judge Milton Shuffield, 136th District Court.
Jefferson County District Court case number: D188-744