The Moneyist: My former mother-in-law took out a life-insurance policy on my eldest child. I’m enraged. Is that legal?

Dear Quentin,

My former mother-in-law has a life-insurance policy on my 27-year-old daughter, her oldest granddaughter. Is that valid and legal?

We all live in Georgia and have for years. I divorced my ex-husband 26 years ago. My current husband, of 24 years, took my oldest daughter in and accepted her 100% as his own from the beginning.

My ex-husband is an alcoholic, and has a very controlling and manipulative mother. He is currently on probation and not allowed to drive, after five DUIs. My ex-husband is a momma’s boy. His mother is a dishonest and conniving individual who will beg, borrow, cheat and steal for her “baby boy” or herself, because she feels the world owes her.  

When I remarried, I was in a court battle with my ex — or his mom, because she controlled the purse strings — off and on for about four years. My ex was trying to get out of paying child support. I finally agreed to it, as I was tired of the fight. Besides, my current husband said that if the ex didn’t want to take care of his own child, he would. 

‘We still continued to battle over ridiculous things throughout the years.’

We still continued to battle over ridiculous things throughout the years. Not once did my ex-husband or his parents help with anything financially other than what was required by the court, which was nearly nothing. They didn’t help with anything school-related unless required; they didn’t help with the purchase of the first car, college tuition and fees.

They didn’t even help when my oldest asked to go to alcohol rehab because she needed help. I haven’t communicated with any of them in over 10 years. I despise all of them. Fast-forward to today, when my oldest told me that my former mother-in-law has a life-insurance policy on all her grandkids, plus half a dozen other people.  

They have never given or even offered financial help throughout the years for anything for my daughter, so why does she think it’s OK to have a life-insurance policy on my child? How can I cancel this policy? I can assure you she plans on pocketing the money instead of helping to bury my child if — God forbid — my daughter passes away.

She is a monster-in-law! Any information or advice would be greatly appreciated.

Former Daughter-in-Law

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Dear Former,

Generally, taking out a life-insurance policy on a grandchild makes sense as a gift for that child, rather than as a payout for the person who took out the policy.

In most states, your former mother-in-law would need permission from your daughter, assuming she was an adult at the time, or from her parent or guardian if she was a minor. Presumably, she sought such permission from your daughter’s father. Forging such a signature would be illegal. 

Of course, most grandparents take out policies on their grandchildren to help them build up a nest egg for college — even if a 529 account would be a better alternative — or merely as a way to gift them money at a later date. They may, for instance, sign over the policy to them at the age of 18 or 25.

“As extended caregivers, grandparents are eligible to purchase whole life insurance for their grandchildren,” according to SelectQuote, which helps people shop for insurance policies. “The insurance can be purchased in the child’s name, which means the child becomes the policy owner once they are an adult.”

You outline all of the misdeeds and absences by your former husband and mother-in-law, and it clearly is very emotionally triggering that this policy exists. It appears to bring up all of those bad memories and resentments. I don’t doubt any of the bad behavior or how your daughter’s father failed to show up in her life.

‘Whether you instigate poor behavior or not, you have a choice: You can let them live their lives, or become hostage to their every move.’

However, by obsessing over this policy and agonizing about how it can be undone, you may as well be married to both of them. Whether you instigate poor behavior or not, you have a choice: You can let them live their lives, or become hostage to their every move.

If you choose the latter, ask yourself what you get out of choosing this path — because it is a choice. Perhaps this anger is a familiar place for you, and the resentment allows you to feel righteous and wronged, and reminds you that you have done your best to be a good person.

Whatever the reasons, these short-term surges of hurt and anger — however valid — do not serve your long-term happiness. The whole point of getting divorced and starting a new life is to leave these petty preoccupations behind. It will only create a toxic family atmosphere.

Taking out a life-insurance policy on a grandchild, someone who is young and healthy, can have advantages. “Plans for grandchildren seldom require an exam, rates will never increase, and coverage never expires,” according to Choice Mutual insurance agency.

For the record, there are two main types of life insurance: The first is term life, which exists for a period of time and has no cash-out value. The second is whole life — also known as universal life, variable universal life and indexed universal life — which, as the name suggests, lasts for the person’s entire life. 

Your former mother-in-law could either wait and, in the unlikely event that your daughter predeceases her, cash in the policy. Alternatively, she could use it as a de facto savings plan, and borrow from the policy or money early. Speculating on what she may or may not do, however, is not healthy.

Whether her motivations are self-serving or altruistic, your former mother-in-law will have a premium to pay for every life-insurance policy she owns. If she does not keep up on the premiums, the policies will expire. That’s her lifelong responsibility, and her choice. Do yourself a favor and leave her to it.

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Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

More from Quentin Fottrell:

My married sister is helping herself to our parents’ most treasured possessions. How do I stop her from plundering their home?
My mom had my grandfather sign a trust leaving millions of dollars to two grandkids, shunning everyone else
My brother’s soon-to-be ex-wife is embezzling money from their business. How do we find hidden accounts?
‘Grandma recently passed away, leaving behind a 7-figure estate. Needless to say, things are getting messy’

The Moneyist: My sister wants to distribute $50K to each grandchild from our mom’s savings — but some of us siblings don’t have kids

Dear Quentin,

I trust my sister, but think she is sometimes driven by sentiment rather than practicality. I am one of four, and the sister who lives closest to my mom is handling finances for her. Mom is 93, in decent health, and currently in assisted living. 

That is the big picture. There is a buildup of funds in my mom’s checking account, due to regularly replenished income that did not get spent. She has other money in savings too, about $1 million.

My sister wants to make a distribution of the excess checking-account money — not to me and my siblings equally, but to my mom’s grandchildren, giving each grandchild an equal amount. That’s $50,000 to each of the grandchildren. 

My mom is not involved in this decision because she has delegated signing authority for the account to this sister and my brother. We do not want to involve her in this, although my sister has tried to lobby her a bit in favor of the grandchildren.

‘Mom and Dad always wanted their estate to treat all their children equally, and the grandchild distribution would not accomplish that.’

Mom and Dad always wanted their estate to treat all their children equally, and the grandchild distribution would not accomplish that. I do not have children, only stepchildren, and they would not be part of this distribution. 

My brother, who also signs checks, contends that the money should go to the four siblings, who can gift the money to their children if they wish. That is also my position. The remaining sibling is abstaining from the discussion. 

My sister disagrees, and believes that our mom loves her grandchildren and would want the money to go to them. My mom is still considered legally competent, though as a practical matter this is debatable. 

My money-managing sister is doing pretty well, aside from this episode, and I want to stay on good terms with all my siblings. How do we approach and define this for future money distributions?

Unhappy Sibling

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Dear Unhappy,

It’s a deft sleight of hand for a co-signer to authorize withdrawals of $50,000 to their and their other siblings’ children rather than take care of the day-to-day running of your mother’s finances. I understand that estate planning is foremost among your four siblings’ minds, but putting pressure on your mother to agree to this is not within the purview of responsibilities for this role. 

Thankfully, your brother is also a co-signer, and assuming they both have to authorize withdrawals, there is a safeguard in place. If your mother wants to distribute her assets equally among her beneficiaries — grandchildren are not considered beneficiaries if their parents are alive — her wishes should be respected. At best, it’s sharp practice. At worst, it’s opportunistic.

So what now? Some co-signers require permission from the account holder to make withdrawals, others may not. Check the rules on this arrangement with your mother and brother. Hold a family meeting to discuss the parameters of this arrangement, and talk to your mother — and, if necessary, the bank — about these limits and how no one should be put under pressure.

There are other potential potholes down the road. If your siblings are also co-owners of this bank account, the money in that account will automatically become their property when your mother dies. What’s more, the money in that account could be used to pay debts incurred by your siblings if they were involved in a lawsuit and/or if they divorced.

Your sister’s role as co-signer is to help manage your mother’s finances; make sure bills are paid on time, including rent or mortgage payments and other insurance policies the owner of the account may have; and, above all, look out for the welfare of the account owner — not figure out how to self-deal and pass money on to her own children. 

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

More from Quentin Fottrell:

My married sister is helping herself to our parents’ most treasured possessions. How do I stop her from plundering their home?
My mom had my grandfather sign a trust leaving millions of dollars to two grandkids, shunning everyone else
My brother’s soon-to-be ex-wife is embezzling money from their business. How do we find hidden accounts?
‘Grandma recently passed away, leaving behind a 7-figure estate. Needless to say, things are getting messy’

Capitol Report: ‘It’s not looking good’: Paid leave may be on chopping block in Democrats’ social-spending bill

Paid leave, a major part of Democrats’ wide-ranging social-spending bill, may be left on the cutting-room floor as the party’s moderates and progressives try to hammer out an agreement this week.

President Joe Biden last week said the proposed program had been cut to four weeks in negotiations, from Democrats’ original idea of giving all U.S. workers up to 12 weeks of paid family medical leave.

Now see: What’s in — and not in — Democrats’ big social-spending bill, as billionaire tax hits resistance

On Wednesday, Sen. Elizabeth Warren said Democrats may have to abandon sick leave and focus only on limited benefits for new parents with children, according to the Washington Post.

“It’s not looking good, and I wish it were otherwise,” said the Massachusetts Democrat, according to the Post. “We’re still trying to talk about” family leave, she added.

But the Wall Street Journal reported late Wednesday that paid family leave was being dropped from the proposal entirely.

Proponents of paid leave are running into opposition from Sen. Joe Manchin, a moderate West Virginia Democrat whose vote is key in the evenly divided Senate.

“It doesn’t make sense to me,” Manchin told reporters on Wednesday, citing financial strain faced by other government programs.

Sen. Kirsten Gillibrand, a New York Democrat, separately said she has a paid-leave proposal and is trying to meet with Manchin on Wednesday.

The developments on paid leave came the same day as a Congressional hearing where some witnesses emphasized the importance of paid leave to lawmakers.

“Economic growth in 20 years depends on the choices we make today about investing in our youngest members of society,” said  Betsey Stevenson, an economist at the University of Michigan who was once a member of the Obama administration’s Council of Economic Advisers.

Stevenson, speaking to members of the Joint Economic Committee, said paid leave is crucial for greater labor force participation and increases worker retention.

Small business owner Daniel Swenson-Klatt also paid leave would be one way to make life easier for him and his staff at the Butter Bakery Café in Minneapolis, Minn. “A comprehensive paid leave program would be a way for my staff to take time off for health and personal reasons that doesn’t put my business or their job at jeopardy,” Swenson-Klatt said.

Andrew Keshner contributed to this report.

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Key Words: Grayscale’s LaValle expects the SEC to approve its spot bitcoin ETF by July 2022

David LaValle, global head of ETFs at Grayscale Investments, said on Wednesday that he expected the U.S. Securities and Exchange Commission to approve the company’s application for a spot bitcoin ETF by July next year. 

Grayscale applied with the SEC to convert its Grayscale Bitcoin Trust GBTC, -5.52%, the largest bitcoin BTCUSD, -0.29% fund in the world, into an exchange-traded fund. The company submitted the filing on Oct. 19, the same day the U.S.’s first bitcoin futures ETF ProShares Bitcoin Strategy ETF BITO, -4.99% made its debut trading.

“We thought it was the perfect time to submit our filing,” LaValle said in MarketWatch’s “investing in crypto” virtual event on Wednesday. “Now that the bitcoin futures products were somewhat off the plate of the SEC,  they would be open to look at the filings of spot-based products.”

 “240 days time frame is what is in line with these type of filing,” LaValle said, speaking to the ability of the SEC to extend the review period for an ETF application to up to 240 days, before making a final decision.

“We believe that the futures market and spot market are intrinsically related,” LaValle said. “The acceptance of a bitcoin futures product means the SEC would respond to our filing of spot products.”

David Abner, global head of business development at crypto exchange Gemini, who spoke in the same panel, said that it’s hard to tell when the SEC would approve a spot bitcoin ETF. “I think it could be as early as the end of this year.”

“All of these are up to when the SEC sees its moment,” Abner said. “What we can be sure of is that they’ve taken the steps. We’re moving forward…There’s a path coming here.”

Some analysts think a spot bitcoin ETF still may be far away, as bitcoin futures have been regulated by the Commodity Futures Trading Commission, while the same doesn’t apply for bitcoin trading.  

When asked if ether futures ETFs could the be the next likely products to be approved, Abner said it is “one of the difficulties” facing the SEC.

“The ETF industry doesn’t lack of creative product development teams,” Abner said. “There are some concerns that the approval of a bitcoin futures ETF leads to the request for ethereum futures ETFs, and then in a short amount of time, you’d have advisers looks for a SHIB ETF as well.”

“[The SEC] They want to develop a framework so it doesn’t seem random that they approve one piece and not something else.” 

Bitcoin suffered a 5% loss during the past 24 hours, recently trading at $58,820. Ether ETHUSD, +0.03% tumbled as well, recently trading at $3,984, with a 6.7% loss over the past 24 hours. Shiba Inu rallied 70% during the past 24 hours. Earlier on Wednesday, the meme coin recorded a new all-time high of $0.000087.

GBTC closed at $46.7 with a 5.5% loss. BITO closed with a 5% loss at $38.06.

: Fiserv stock logs worst day in 19 months after earnings

Fiserv Inc.’s stock dove to its worst performance in more than 19 months Wednesday after the financial-technology company discussed the loss of a large processing customer during its earnings call and gave a more muted commentary around the current quarter than some were expecting.

The stock fell 10% in Wednesday trading, making for its steepest single-day percentage decline since March 18, 2020, when it lost 10.9%.

Fiserv FISV, -10.02% reported third-quarter net income of $428 million, or 64 cents a share, up from $264 million, or 39 cents a share, in the year-prior quarter. On an adjusted basis, Fiserv earned $1.47 a share, up from $1.20 a share a year earlier and ahead of the $1.45 a share that analysts tracked by FactSet were projecting.

Revenue rose to $4.16 billion from $3.79 billion, while analysts had been looking for $4.12 billion.

Read: How the quirky ways you type, swipe and behave can protect you online

The company now expects internal revenue growth of 11% for the full year, along with adjusted earnings per share of $5.55 to $5.60 for the period. The company’s prior outlook was for 10% to 12% revenue growth and $5.50 to $5.60 in adjusted EPS.

Analysts saw several reasons for the stock’s Wednesday selloff, including Chief Executive Frank Bisignano’s mention of the “loss of a large processing client through one of our JVs” during the company’s earnings call.

Chief Financial Officer Robert Hau added that Fiserv pointed out the loss “in terms of adjusting our volume and transactions for transparency” but that the situation “has very little impact overall on the actual revenue.”

“It sounds like they lost Stripe,” Baird analyst David Koning wrote. While this “sounds bad,” he agreed that the loss of this client is “roughly immaterial to revenue” since large acquirers and large merchants tend to pay “very low fees” for each transaction.

On a more positive note, “the massive growth in Clover comes on at very high yields…probably 10-20x+ the yield of Stripe volumes,” he continued, referring to the company’s Clover business that offers card processing and point-of-sale technology.

Barclays analyst Ramsey El-Assal also suspected that Stripe was the client referenced.

“Management indicated that the client brought processing in-house, rather than a competitor taking the business (though given investor concern regarding competitive pressure from fintechs, the loss may have a more outsized impact on sentiment),” he wrote.

Representatives from Stripe and Fiserv didn’t return MarketWatch’s requests for comment on whether Stripe was the customer that left the joint venture.

El-Assal also highlighted that Fiserv suggested fourth-quarter acceptance revenue could be roughly in line with third-quarter revenue. That outlook “is likely somewhat less than investors were hoping for, especially given potential support from the upcoming holiday season,” he noted.

Raymond James analyst John Davis keyed in on Fiserv’s free-cash-flow expectations, which he called the “biggest concern” coming out of the report. Fiserv expects free-cash-flow conversion of 95% to 100% for the full year, whereas its prior expectation was for at least 108%.

“While at this point we do not expect material disruption to management’s target [of] $30 billion in capital allocation over the next five years, we think higher capex is sustainable (reinvesting for growth + Ondot software development), which will weigh on FCF conversion going forward,” Davis wrote.

Shares of Fiserv rivals Global Payments Inc. GPN, -7.59% and Fidelity National Information Services Inc. FIS, -6.69% lost 7.6% and 6.7%, respectively, in Wednesday’s session. Payment stocks in general suffered Wednesday: Visa Inc. shares V, -6.92% fell 6.9% after the company delivered a disappointing outlook for its new fiscal year, while Mastercard Inc. shares MA, -6.05% declined 6.0%.

Fiserv shares have lost 13.8% over the past three months, as the S&P 500 SPX, -0.51% has risen 3.4%.