Pull out or not?

SeeJayJensen

SeeJayJensen said:

Linton said:

 More info needed. What is the investment? It could be shares perhaps in a private company or a loan, perhaps some sort of bond or something else entirely. Do you have any details of the company or hospital. A name or a link to a website would help.

Sorry i dont know the name of the hospital. I think it's shares. he's always invited to shareholders parties every Christmas time.

it's called "shareholders christmas party: (insert theme here)"  every year

SeeJayJensen

NEW INFO:
he's invested 250K. that's what was left of his retirement money after having their retirement house finished. IDK if that helps. Also, it's probably in its 5th year now (he started talking about this investment when I started college and that was in 2016). 

so should we just wait for this year to be over? or give it more chance to gain more profits (because of pandemic) before asking about the dividend?

MaxiRobriguez

dunstonh said:

I have a bad feeling about this.

These types of investments are non-standard and extremely high risk and have a very high failure rate.  Some are just outright scams.     We have very little to go on based on what you have said but my first reaction would be to be on guard and look into it more to see if it is a genuine case or one of the dodgy ones.

100% this.

Additional information that there's £250k in this scheme and it's "all of the retirement money" makes me exceptionally uncomfortable. 

Zanderman

SeeJayJensen said:

@barnstar2077 @dunstonh I don't think that it's a scam? because he's witness how the hospital was built (he invested in the hospital before it even opened). also, he's received the necessary perks listed in the contract and more. <-- is this their way of making up that they haven't paid him the correct dividend?

Just because the hospital exists doesn't mean the financial investment is secure.  The are many scams out there claiming to give people shares in hotel rooms (in real hotels) or car-park shares (in real car parks) but they are mostly scams that start off paying the promised divi and then, er, stop. And the 'investor' finds that they never really had any money in that hotel or car park, they were just lied to about it.

So the issue is not whether there is a building but what is the organisation that ran the investment scheme.  From the info you've given so far there's no clue as to who this is.

But, from the info you given, there is clearly some correspondence/paperwork about it so if you could post some detail about that - who the letters are from, what the firm is called etc, what the contract says.  It may be completely legit, but it might not be.  And the only way to tell is to give some info on who is running the scheme.  

ETA - basically, if he thinks the divi being paid is wrong, or it's not being paid at all now, then alarm bells should be ringing!  He's either wrong about what he should get.  Or he's being (been) scammed.

kuratowski

SeeJayJensen said:

what if it's a verbal will that he's announced to all his children? does that count?

No.  From https://www.ageuk.org.uk/information-advice/money-legal/legal-issues/making-a-will/ :

For a will to be valid:

• it must be in writing, signed by you, and witnessed by two people

If your grandfather dies without executing a valid will, then intestacy rules will apply.  As a general guide, the first £270k goes to the surviving spouse, the rest is split into two, with half going to the spouse and the other half equally shared among all the children.  No special treatment for the eldest child.

Others have commented on the investment itself.

(Edited to make correction as pointed out below)

steampowered

The first thing you need to do is to try and get your hands on the paperwork for this investment. I hope your grandfather has it somewhere!

That should tell you what he has actually invested in. Shares in a private company? Bonds? 

That should tell him what his dividend entitlements actually are. If he has not received the correct dividend, you should follow that up. Check the paperwork don't just take your grandfather's word for it!

It should also tell him what his rights are - in particular whether it is possible to ask for his money back. If there is any option of withdrawing capital I would do that immediately. Unfortunately it may not be possible.

You do need to understand that this sort of investment is incredibly high risk and was very ill advised. There might not be much you can do about that now, but be aware there is a possibility that the investment is worth £0.

Aretnap

SeeJayJensen said:

@barnstar2077 @dunstonh I don't think that it's a scam? because he's witness how the hospital was built (he invested in the hospital before it even opened). also, he's received the necessary perks listed in the contract and more. <-- is this their way of making up that they haven't paid him the correct dividend?

A Christmas party and the occasional checkup sounds like a pretty poor return on quarter of a million pounds. I'd be wanting a lot more than that to "make up" for not paying the dividends I was expecting.

The hospital might well exist, and might even be owned by the company that he has shares in. That doesn't mean that it's not a scam. It's fairly easy for a businessman with few scruples to set up a scheme where he raises a lot more from investors than he actually need to build the hospital, then siphons off most of the money through generous bonuses paid to the directors (himself and his mates), or by over-paying other companies that he and his mates happen to own for various services. At the end of the day the hospital exists, and might even make an operating profit, but will never be worth enough to pay back the victims' initial investments. And if the fraud squad take an interest he can just say "sorry, I really did build the hospital like I promised, but it was an expensive job, costs overran, it didn't work out, that's business".

As the others have said, this is ringing multiple alarm bells. The best case scenario is that it's a very high risk investment which is almost certainly an unsuitable place for your granddad's life savings. At worst he's been had. If there is any way he can get his money out I'd suggest that he thinks seriously about doing it as soon as possible, however you and he need to be prepared for the possibility that most or all of his money is already gone. 

moneysavinghero

Annual shareholder get-togethers,whether dressed up a Christmas party or a summer BBQ or whatever, are often used to try and sell extra investments.

If you don't know what your father invested in, how do you know that he is due dividends? I hold shares that used to pay dividends but no longer do. That is perfectly normal. Dividends are never guaranteed.

What make you think holding for 5 years makes any difference? Does is say something about this in the contract? If you have seen the contract then surely you know the company that he has invested in.

Malthusian

kuratowski said:

If your grandfather dies without executing a valid will, then intestacy rules will apply.  As a general guide, the first £270k goes to the surviving spouse, the rest is split into equal shares and shared among the spouse plus all the children.  No special treatment for the eldest child.

Not correct: half the balance over £270k also goes to the surviving spouse, and it's the rest that is split into equal shares and is distributed among the children. Assuming English / Welsh law applies.

jimjames

SeeJayJensen said:

NEW INFO:
he's invested 250K. that's what was left of his retirement money after having their retirement house finished. IDK if that helps. Also, it's probably in its 5th year now (he started talking about this investment when I started college and that was in 2016). 

so should we just wait for this year to be over? or give it more chance to gain more profits (because of pandemic) before asking about the dividend?

There are 2 possibilities (well probably more but 2 main options)

1) It's a genuine investment where dividends have been suspended for some reason - this is entirely possible even with FTSE100 companies especially in the last year. Are the shares listed on an stock exchange and can they be sold easily?
2) It's a scam and the shares are worthless. Dividends have stopped because the scam isn't getting any more money in to pay out to previous investors.

From the info so far it's not really possible to tell which of these scenarios it is. Find the paperwork and with some names of companies it might be easier to find out.