Taking control of a parent’s finances

[Human]

OP here. It's been a crazy day, so I've only been able to skim the responses. Wow - such a wealth of experience shared. Thank you all so much!

I'm sure I'll be back with some follow up questions soon.

 

[gauss]

Interesting point that I didn't think of. Being joint on my parents' bank account, allows very easy access of money movements though.
I do have an Umbrella Policy, which hopefully would limit this kind of potential damage.

If you have siblings, then being added as joint owner on parents account is flirting with permanent family conflict after the parent passes. I have seen this first hand.

The scenario goes something like this. Primary caregiver has name added as joint owner to bank account to make things easy (as opposed to just an authorized signer). Family Will declares assets to be split equally between all the children with perhaps a special carve out for the primary caregiver child.

The problem is that the money in the jointly owned bank account will bypass the will/probate and go directly to the caregiver child who had their name added. Parents are now dead and can no longer speak for themselves. Resentment , betrayal talk starts and then the family experiences a permanent schism.

After listening to a community talk from a representative from the Probate Court, this appears to be a very common scenario.

Much better to let the will/probate court manage the distribution of assets after the parent dies then to rely on all the children to do the right thing. To much chance for misinterpretation of the parents wishes.

Some will say that "it won't happen in my family". The evidence however suggests unpredictable behavior changes when inherited money is involved.

Probate is not necessarily something to be avoided. It was created for a reason--contrary to what those pedaling living trusts will try to convince you of.

-gauss
a fan of openness and transparency

 

[Dtail]

If you have siblings, then being added as joint owner on parents account is flirting with permanent family conflict after the parent passes. I have seen this first hand.

The scenario goes something like this. Primary caregiver has name added as joint owner to bank account to make things easy (as opposed to just an authorized signer). Family Will declares assets to be split equally between all the children with perhaps a special carve out for the primary caregiver child.

The problem is that the money in the jointly owned bank account will bypass the will/probate and go directly to the caregiver child who had their name added. Parents are now dead and can no longer speak for themselves. Resentment , betrayal talk starts and then the family experiences a permanent schism.

After listening to a community talk from a representative from the Probate Court, this appears to be a very common scenario.

Much better to let the will/probate court manage the distribution of assets after the parent dies then to rely on all the children to do the right thing. To much chance for misinterpretation of the parents wishes.

Some will say that "it won't happen in my family". The evidence however suggests unpredictable behavior changes when inherited money is involved.

Probate is not necessarily something to be avoided. It was created for a reason--contrary to what those pedaling living trusts will try to convince you of.

-gauss
a fan of openness and transparency

Currently, both parents are alive. I think I will address when one passes. Alternatively, I would have no issue if my siblings are added to the account.

 

[ExFlyBoy5]

We did set up a separate gmail account for MIL finances. This kept it clean from her previous email, which was cluttered with junk, and any of our personal emails. We changed all of her accounts to reflect the new email account.

That is an excellent idea! My Dad's email inbox has over 100,000 items in the inbox. And no, that is NOT a typo. When he was active on the computer, he was all about Publisher's Clearing House sweepstakes (scammers of the highest level, IMHO) and getting "newsletters" from shysters claiming to have a magic pill that would help you live to 150. So, as you can imagine, it can be quite time consuming to wade through all that crap to see if there is anything important.

So, thanks for this idea! I will be setting up an account today just for his important stuff.

 

[48Fire]

That is an excellent idea! My Dad's email inbox has over 100,000 items in the inbox. And no, that is NOT a typo. When he was active on the computer, he was all about Publisher's Clearing House sweepstakes (scammers of the highest level, IMHO) and getting "newsletters" from shysters claiming to have a magic pill that would help you live to 150. So, as you can imagine, it can be quite time consuming to wade through all that crap to see if there is anything important.

So, thanks for this idea! I will be setting up an account today just for his important stuff.

Your welcome, glad you like it. You will REALLY like it once you do it. MIL had an old AOL email account that was shared with FIL. Wow, the junk and spam was amazing. After four years with the new email account, still no junk or spam

 

[TrvlBug]

Your welcome, glad you like it. You will REALLY like it once you do it. MIL had an old AOL email account that was shared with FIL. Wow, the junk and spam was amazing. After four years with the new email account, still no junk or spam

Setting up a totally separate e-mail account for one's finances is an excellent idea. We did this about a year ago...two new e-mail accounts in fact. One strictly for banking/investment accounts/tax man and another for the various points accounts, insurance, and the like. Should have done this years ago.

 

[Dash man]

That is an excellent idea! My Dad's email inbox has over 100,000 items in the inbox. And no, that is NOT a typo. When he was active on the computer, he was all about Publisher's Clearing House sweepstakes (scammers of the highest level, IMHO) and getting "newsletters" from shysters claiming to have a magic pill that would help you live to 150. So, as you can imagine, it can be quite time consuming to wade through all that crap to see if there is anything important.

So, thanks for this idea! I will be setting up an account today just for his important stuff.

A little off topic, but DW and I set up a separate Gmail account for our financial accounts. We both have access to it and only use it for active accounts. It will help us when to keep track of things when the other is gone. Any bills or statements will go to that email address. It also ensures we both know what is going on financially each month now.

 

[pb4uski]

If you have siblings, then being added as joint owner on parents account is flirting with permanent family conflict after the parent passes. I have seen this first hand.

The scenario goes something like this. Primary caregiver has name added as joint owner to bank account to make things easy (as opposed to just an authorized signer). Family Will declares assets to be split equally between all the children with perhaps a special carve out for the primary caregiver child.

The problem is that the money in the jointly owned bank account will bypass the will/probate and go directly to the caregiver child who had their name added. Parents are now dead and can no longer speak for themselves. Resentment , betrayal talk starts and then the family experiences a permanent schism.

After listening to a community talk from a representative from the Probate Court, this appears to be a very common scenario.

Much better to let the will/probate court manage the distribution of assets after the parent dies then to rely on all the children to do the right thing. To much chance for misinterpretation of the parents wishes.

Some will say that "it won't happen in my family". The evidence however suggests unpredictable behavior changes when inherited money is involved.

Probate is not necessarily something to be avoided. It was created for a reason--contrary to what those pedaling living trusts will try to convince you of.

-gauss
a fan of openness and transparency

We had this happen with great-auntie and it turned out to be a godsend. When great untie went into the nursing home we set up a local bank account with her as primary and my aunt who had a POA as secondary and also me since I was going to be paying the bills.

I began liquidating great-auntie's stocks and bonds in anticipation of her private pay nursing home expenses. The last of these liquidations happened just prior to my getting a call to get up to the nursing home asap... I was 5 minutes too late... she had passed but it didn't much matter because she would have had no idea who I was anyway.

Since all her money was in an account that my aunt and I were joint owners on, there was no need for probate... we just paid all her final bills and then wrote out checks to the beneficiaries as designated in her will and closed the account.

No resentment, no betrayal, no schism.

Now if we had been unethical and claimed that money for ourselves then it would have been a whole different story and I don't doubt that there is a lot of that out there. Luckily, both my aunt and I are both financially independent and had no need for her money... I got a couple grand for all the work that I had done (over 2-3 years) and my aunt was one of the main beneficiaries of her will.

 

[target2019]

Check the specified beneficiaries on policies and accounts. Sometimes you find unexpected names. Or the percentages do not follow the intent of the will.

 

[Katsmeow]

Interesting point that I didn't think of. Being joint on my parents' bank account, allows very easy access of money movements though.
I do have an Umbrella Policy, which hopefully would limit this kind of potential damage.

Not all types of claims are covered by an umbrella policy. I recently had my mom's POA and used it for a couple of months until she recently died. I didn't make myself joint on her account, however. Instead I set myself up as POA on the account which was fine.

I have no siblings but would be very cautious doing a joint account if I did.

If for some reason I had felt that I absolutely had to be joint on the account, I would have set up a separate account from my mom's primary account and would have kept only a limited amount of money in that account so that if there was ever any issue it didn't have much money in it.

 

[gauss]

We had this happen with great-auntie and it turned out to be a godsend. When great untie went into the nursing home we set up a local bank account with her as primary and my aunt who had a POA as secondary and also me since I was going to be paying the bills.

I began liquidating great-auntie's stocks and bonds in anticipation of her private pay nursing home expenses. The last of these liquidations happened just prior to my getting a call to get up to the nursing home asap... I was 5 minutes too late... she had passed but it didn't much matter because she would have had no idea who I was anyway.

Since all her money was in an account that my aunt and I were joint owners on, there was no need for probate... we just paid all her final bills and then wrote out checks to the beneficiaries as designated in her will and closed the account.

No resentment, no betrayal, no schism.

Now if we had been unethical and claimed that money for ourselves then it would have been a whole different story and I don't doubt that there is a lot of that out there. Luckily, both my aunt and I are both financially independent and had no need for her money... I got a couple grand for all the work that I had done (over 2-3 years) and my aunt was one of the main beneficiaries of her will.

Glad it worked out for you -- in this case -- from your perspective.

Did the beneficiaries who received checks also receive a copy of the will? I know that Probate would have required this disclosure (well at least in my state).

Did the couple of grand that you received come to you before or after her passing?

BTW, having a second one of you on the accounts in addition to the primary is probably better then just one sole additional "joint" owner. This is typically the scenario that I have seen gone bad.

 

[Dtail]

Not all types of claims are covered by an umbrella policy. I recently had my mom's POA and used it for a couple of months until she recently died. I didn't make myself joint on her account, however. Instead I set myself up as POA on the account which was fine.

I have no siblings but would be very cautious doing a joint account if I did.

If for some reason I had felt that I absolutely had to be joint on the account, I would have set up a separate account from my mom's primary account and would have kept only a limited amount of money in that account so that if there was ever any issue it didn't have much money in it.

As an aside, my siblings are fully aware of the "consequences" of my being on the joint account and trust me - what can I say....
Plus the joint account represents 2% of my parents total assets.

 

[harley]

As an aside, my siblings are fully aware of the "consequences" of my being on the joint account and trust me - what can I say....
Plus the joint account represents 2% of my parents total assets.

At 2% there's probably no problem, but I was wondering about this happening with an account that was significantly larger. Once the older owner passed, you wouldn't just be able to write checks to the other heirs I think. The money becomes yours, and writing the checks would be gifting, not distributing, and subject to limits and taxes. But I guess as long as the account wasn't that big this concept would work.

 

[pb4uski]

Glad it worked out for you -- in this case -- from your perspective.

Did the beneficiaries who received checks also receive a copy of the will? I know that Probate would have required this disclosure (well at least in my state).

Did the couple of grand that you received come to you before or after her passing?

BTW, having a second one of you on the accounts in addition to the primary is probably better then just one sole additional "joint" owner. This is typically the scenario that I have seen gone bad.

The couple grand that I received was after she died... the residual beneficiaries insisted that I get something for the work I did so effectively it was a gift to me from the residual beneficiaries. I did it as a labor of love for great-auntie and my aunt but it did require a lot time (I was great auntie's legal guardian as well).

Her will granted certain nice jewelry items that she owned to sisters and nieces. When she was moved into the nursing home from 200 miles away, her nephew reported that all the jewelry was "missing"..... we suspect that it was missing in his wife's jewelry box. In addition, there were a fewspecific monetary bequests and her residual estate was split 50/50 between my aunt and a niece.

The nice part of us effectively "owning" the money was that we control what happened. We ended up giving each person who was to receive a piece of jewelry $xxx and reduced the jewelryed nephew's financial bequest by the aggregate amount, paid the other financial bequests and paid the remainder to the two residual beneficiries. Given the duplicituous nature of the nephew getting sued was a risk that my aunt and I were willing to take. I did reserve and amount equal to what we shorted the jewelryed nephew aside in case he did raise a stink but he didn't, so a year later I paid that out to the residual beneficiaries and we were done.

We didn't share the will with the beneficiaries, but the two residual beneficiaries were well aware that they were residual beneficiaries.... the other bequests were insignificant other than one of the specific financial bequests.

 

[target2019]

The situation I am aware of is one sibling being named beneficiary of approximately 40% of the investments. This would have meant that a large windfall would have gone to the sibling. Then, the will would kick in, with 50% (2 siblings) of the remainder going to each sibling. This was not the intent of the parents, and it is unknown why they did this. But they did come to understand what would happen when they passed, and corrected the situation.

 

[Dtail]

At 2% there's probably no problem, but I was wondering about this happening with an account that was significantly larger. Once the older owner passed, you wouldn't just be able to write checks to the other heirs I think. The money becomes yours, and writing the checks would be gifting, not distributing, and subject to limits and taxes. But I guess as long as the account wasn't that big this concept would work.

That is an interesting point I didn't think of. The account is a checking account and by default I wouldn't let it get larger, as I transfer balances over XXX into a high yield MM account of which I am not a joint owner.

 

[Human]

OP here with follow up questions:

For credit card charges, did you:

• Use your parent's existing credit card?
• Open a new credit card in your parent's name?
• Use a credit card in your name and reimburse expenses?
• Other?

For checks from your parent's checking account, what address did you use?

• Your parent's
• Yours
• Removed address from checks
• Other

Thanks again for the great insights.

 

[48Fire]

For credit card, we used MIL account, and added cards with sibling's names to cover care-related expenses.

For checks, we just used MIL with old addresses. I don't think address is a big deal in the check world.

 

[Texas Proud]

I do have my mother's CCs, but since she moved into memory care a couple of months ago I have decided to use one of mine that I was not using...


It is much easier to keep track of and make sure it is paid...


I have access to her bank account and will just move the money...


As for checks, we still own her condo so I am using her checks at her old address... but, I have not used one in two months... most bills are paid online or with the above mentioned CC....

 

[MichaelB]

I closed the credit cards. It was. One more thing that needed to be reviewed regularly, but added no value. DMs bank accounts are in her name, c/o me and my address. Most of her expenses I pay, and then get reimbursed.

 

[gauss]

I am on DM's CC -- Barclays makes it nice since we get our own CC # with our own name on the card. The charges are separated by user on the statement.

I am also joint on DM's banking accounts.

As her only child, I am the sole beneficiary of her will.

-gauss

 

[gauss]

The couple grand that I received was after she died... the residual beneficiaries insisted that I get something for the work I did so effectively it was a gift to me from the residual beneficiaries. I did it as a labor of love for great-auntie and my aunt but it did require a lot time (I was great auntie's legal guardian as well).

Her will granted certain nice jewelry items that she owned to sisters and nieces. When she was moved into the nursing home from 200 miles away, her nephew reported that all the jewelry was "missing"..... we suspect that it was missing in his wife's jewelry box. In addition, there were a fewspecific monetary bequests and her residual estate was split 50/50 between my aunt and a niece.

The nice part of us effectively "owning" the money was that we control what happened. We ended up giving each person who was to receive a piece of jewelry $xxx and reduced the jewelryed nephew's financial bequest by the aggregate amount, paid the other financial bequests and paid the remainder to the two residual beneficiries. Given the duplicituous nature of the nephew getting sued was a risk that my aunt and I were willing to take. I did reserve and amount equal to what we shorted the jewelryed nephew aside in case he did raise a stink but he didn't, so a year later I paid that out to the residual beneficiaries and we were done.

We didn't share the will with the beneficiaries, but the two residual beneficiaries were well aware that they were residual beneficiaries.... the other bequests were insignificant other than one of the specific financial bequests.

Thank you for writing up and sharing the details, pb4uski

-gauss