Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Power of Attorney and Inheritance
Old 03-01-2007, 09:41 PM   #1
Recycles dryer sheets
 
Join Date: Feb 2006
Posts: 403
Power of Attorney and Inheritance

Lets say that a child has total POA for an elderly parent. The parent has a few million in liquid but does not want to gift any assets until after they are dead or at least on their death bed. As soon as the parent's health begins to fail and they head into the hospice or hospital for the last time, can the child do a mass gifting of assets to all heirs under the POA? Is there any reason this would be suspect? Literally the child would take out the check book and write the max gift amount out to all the children and grandchildren, perhaps on the final day of the parent's life. Sorry if this is a bit morbid, but I am curious as to how the situation would work, and whether this is a way to deal with an elderly parent who does not feel comfortable discussing gifting but does recognize the importance of a child having a POA when their health fails.
__________________

__________________
macdaddy is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Power of Attorney and Inheritance
Old 03-01-2007, 09:47 PM   #2
Thinks s/he gets paid by the post
SteveR's Avatar
 
Join Date: Jul 2005
Posts: 2,803
Re: Power of Attorney and Inheritance

Why not? If both parents are living..double the gifts. If the estate is really big...who cares about the limit of $12k(?) per person? Give it away. If there are lots of beneficiaries then the tax liability is more spread out from the initial estate and the loss of tax shelter from the gifting would also be less.

See a tax attorney for more information.
__________________

__________________
Work? I don't have time to work....I'm retired.
SteveR is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-01-2007, 10:01 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,625
Re: Power of Attorney and Inheritance

Unfortunately, gifting at the last moment will not put a dent in the taxes of someone with a few million.

You are supposed to set up trusts ahead of time to do this kind of stuff.
__________________
LOL! is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-01-2007, 10:11 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,409
Re: Power of Attorney and Inheritance

Hmmm - make sure the parents stay completely off the government's nickle as to long term care not covered by medicare - it can get complex but be aware most states have estate recovery laws to get some of their money back.

heh heh heh - been several years since I researched this for my Mom(deceased 2005) - in essence gifted over 12 yrs out of her relatively small estate.
__________________
unclemick is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-01-2007, 10:30 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: Power of Attorney and Inheritance

If after our elderly friend passed and his will was opened, it turned out he left everything to his French maid, things could get interesting. The intent of the child with POA might be questioned. It would be an interesting case. Can a child with POA give away all of dad's money, as dad lies on his death bed, to avoid the money going to the person(s) specified in the will?
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-02-2007, 06:54 AM   #6
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
Re: Power of Attorney and Inheritance

i can only speak as to how it worked here in the state of florida.

my brother & i had poa but also we declared guardianship which more or less voided the poa. the poa then became nothing more than a guide for the court, but all financial matters were scrutinized by the state and any large withdrawals required court order.

mom had written in her living will that were she to be declared incompetent, we were to gift ourselves yearly up the taxable limit. even with that, even with poa, we still needed a court order to withdraw funds.

in order to satisfy the court, petitions were written up not simply per mom's living will but to show that the gifting was a matter of estate planning purposes. the main justification to the court was not that mom's heirs would benefit from the gift but that her estate would benefit by reducing its tax burden.

because of past shady deals, florida has become very careful about protecting the assets of the elderly. your mileage may vary.
__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-02-2007, 10:35 AM   #7
Thinks s/he gets paid by the post
Coach's Avatar
 
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
Re: Power of Attorney and Inheritance

Macdaddy, I would be very, very careful. I would think someone acting based on a POA has a fiduciary responsibility to the person who gave the POA, and any action that could be construed as self-serving would be suspicious. I'd check it out with a lawyer before doing it.

I'm not a lawyer, just scared of the word "fiduciary".

Coach
__________________
"Comprehensive health insurance is an idea whose time has come in America." President Richard M. Nixon, February 6, 1974
Coach is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-02-2007, 10:43 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Re: Power of Attorney and Inheritance

Keep in mind that POAs END at DEATH............

Acting as a POA IS acting as a fiduciary, and you could be held liable if you misuse the authority...........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-02-2007, 11:21 AM   #9
Recycles dryer sheets
Robert the Red's Avatar
 
Join Date: Aug 2005
Posts: 325
Re: Power of Attorney and Inheritance

In my father's case (Alzheimer's dementia, POA to my oldest sister, no guardianship), some money was gifted to all children. But we knew what was in the will (equal shares to all children, no other bequests) and we all explicitly agreed on the gifting ahead of time. Anything less "agreeable" would be begging for mega-trouble.
__________________
Robert the Red is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-02-2007, 02:30 PM   #10
Recycles dryer sheets
 
Join Date: Feb 2006
Posts: 403
Re: Power of Attorney and Inheritance

Thanks for all the replies. This gifting is definitely the intention of the parents. It looks like they need to get it in writing somewhere to eliminate any trouble.
__________________
macdaddy is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-03-2007, 08:32 AM   #11
Recycles dryer sheets
 
Join Date: Dec 2006
Location: Florida
Posts: 249
Re: Power of Attorney and Inheritance

My worry would be the potential problems of issuing a durable power of attorney. I've heard of enough horror stories (e.g. trusted child turns out to be not so trustworthy, and most of the money goes up his nose.)

While I don't (presently) have a wife or children, there is no living person in the world that I entrust with a power of attorney of any kind.

Bless you, if you are fortunate enough to have family/friends who can be trusted with that kind of power. Good luck!
__________________
I've got nothing against an honest day's work, provided that someone else does it.
pedorrero is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-03-2007, 03:20 PM   #12
Dryer sheet aficionado
 
Join Date: Oct 2005
Posts: 47
Re: Power of Attorney and Inheritance

Quote:
Originally Posted by macdaddy
Thanks for all the replies. This gifting is definitely the intention of the parents. It looks like they need to get it in writing somewhere to eliminate any trouble.
Definately wise to get it in (legal) writing. What if the person goes in the hospital for the "last time" and makes it back out with a new/different perspective on how they want things handled. I wouldn't want to be the one trying to explain my actions in that case.

This whole subject reminds me of my dad, who would *never* consider a POA for even a second. The man is keeping his millions to himself and would control it all from the grave if he could. He's tried to find a way to do that, but hasn't - so far.

__________________
Ibid is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-03-2007, 04:56 PM   #13
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Re: Power of Attorney and Inheritance

Quote:
Originally Posted by ibid
This whole subject reminds me of my dad, who would *never* consider a POA for even a second. The man is keeping his millions to himself and would control it all from the grave if he could. He's tried to find a way to do that, but hasn't - so far.
Actually he can control his millions from the grave, it's called a trust and he can do all sorts of fun things with it. Parents have successfully ruined their children's lives with them.

Point out to your father that without a POA there won't be anyone to pay for nursing home care if he becomes incapacitated. He'd have to become a ward of the state if none of his relatives sued for guardianship. Then lawyers would drain his assets until he ended up in a medicaide home.

If he gives someone a POA, they don't need to know anything about his assets (but should) until the POA needs to be executed. I find it amazing someone can amass millions and be so stupid as to not get the necessary legal work done for the inevitable.

My FIL fought against getting a POA (he'd never need one) but I kept urging my wife to have him get it. He eventually did just to shut her up. Less than 3 years later she was using it. Right now I don't know what we'd be going through if he hadn't of gotten one a few years ago. The one thing my own father did right was getting his paperwork in order for the last mile.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-03-2007, 06:13 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Re: Power of Attorney and Inheritance

I am sure the laws are a bit different from state to state... But when my father became ill and eventually needed to go to a nursing home, my mother had to go to court to ge guardianship to plan in the facility. The state assigned an attorney for my fathers defense (even though he was totally out of it). Very Stressful!!! While he was alive, all assets of his an my mother had to be accounted for and reports submitted to the court. An on going stress!

A short time later my mother began experiencing some small difficulties. My brother and I took her to an attorney and got POA for Health and Fin. She is living with DW and I now and rotates between our house and my brother and his wife. It probably will not be long before she goes to a home since she is progressively getting worse.

That said, my mother trusted us... and her trust was well placed, we have been very prudent and conservative with her assets.

I have read horror stories where incompetent children (and/or guardians) have squandered parents money while acting as a care giver.

Bottom line... If you have aging parents do not avoid the conversation. Going through the courts is a pain in the *ss.

__________________
chinaco is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-04-2007, 12:36 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: Power of Attorney and Inheritance

Quote:
Originally Posted by chinaco
Bottom line... If you have aging parents do not avoid the conversation. Going through the courts is a pain in the *ss.

Or, if you're "aging parents" consider setting up trusts that establish guidelines for financing your end-of-life care and any other wishes you have.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-04-2007, 02:47 PM   #16
Dryer sheet aficionado
 
Join Date: Oct 2005
Posts: 47
Re: Power of Attorney and Inheritance

Thanks for the comments 2B, but talking to my Dad is not unlike talking to a rock.

Quote:
Actually he can control his millions from the grave, it's called a trust and he can do all sorts of fun things with it. Parents have successfully ruined their children's lives with them.
Except none of us (his kids) want anything to do with his money. He's always made his priorities in life crystal clear. First - make money, second - keep money, third - have money earn more money, fourth - keep everyone else away from your money. He's met those all important goals in his life, and is still working on the last. Apparently, his money is never going to be safe from all those people who want it. Unfortunately he considers his wife and children to be a part of those people. Again, none of us want his money. The sad thing is that at this point, none of us want anything to do with him either. Except for mom, but that's a whole 'nother story in itself.

Quote:
Point out to your father that without a POA there won't be anyone to pay for nursing home care if he becomes incapacitated. He'd have to become a ward of the state if none of his relatives sued for guardianship. Then lawyers would drain his assets until he ended up in a medicaide home.
I tried that already, but again, it's like talking to a rock. His response to this type of conversation is always the same. "You're stupid." "You're lying." "You don't know what you are talking about." and"You just want my money."

Quote:
I find it amazing someone can amass millions and be so stupid as to not get the necessary legal work done for the inevitable.
The word you wanted to use is: crazy.

I'm waiting for the day when one of us visits him and he's walking around with kleenix boxes on his feet.

One good thing about this is that while we (the kids) all have money issues, all of us truly appreciate our own families.

===
Sorry, don't mean to hijack the thread.



__________________
Ibid is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-04-2007, 04:08 PM   #17
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Re: Power of Attorney and Inheritance

Quote:
Originally Posted by ibid
Sorry, don't mean to hijack the thread.
You didn't. My FIL never considered the possibility that he might be "mortal." He was always going to be the "head of the family." He avoided any possible discussion of anything that might say otherwise.

He's now being rewarded, as we are, for his getting the POA done. I would probabl be divorced now because I DW that under no circumstances am I going to life a finger for her parents if they are so inconsiderate (stupid) to not do the simple paperwork needed in the event of their becoming incapable of managing their own affairs. I never imagined it would be both of them at the same time.

You have my condolances for your father. I hope he dies suddenly and makes everyone happy -- or at least lets his family avoid the horrific legal problems that would result.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Re: Power of Attorney and Inheritance
Old 03-04-2007, 04:34 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: Power of Attorney and Inheritance

Despite the fact you don't want anything to do with your dad and don't want his money, you might mention to him that he could set up trusts that will pay for his care if he is incapacitated and your mom can't handle it. Folks with no kids or kids that like to lose money through a hole in their arm or up their nose frequently do this. It's not at all necessary to give over complete control to the kids or anyone else if you're neverous about it.

Trusts, properly set up, don't have to ruin the kids' lives. In fact, they could be completely transparent to the kids and not force the kids to do a thing. Dad's life would conclude with his finances being handled just as though there were no children.

Not how I'd like things to go between myself and my kids, but if they turned "goofy" on me, that's what I'd do.
__________________

__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 11:03 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.