Managing A Parents Financial Affairs

[yakers]

My MIL is intermittently ‘nutz’, both borderline psychotic and some dementia. (There are some good sides to this, MIL forgot her daughter had serious cancer surgery, but she also forgot that they have not got on well together for 20 years.) Some days are better/worse than others. My ‘Lucky’ BIL has a power of attorney for some financial issues and my wife has dual access to some bank accounts. But time is not on our side, I am asking for others advice from their experience of fully taking over the management of a parent’s assets. I do not expect we would have to go to court in some adverse way, she already delegates most decision to DW, BIL (only children) and myself. There is only one big financial issue looming and that is sale of her house, we recently relocated MIL to a senior residence to be near us. But she ‘doesn’t want to give away’ her house and bristles that it is not selling for what she saw houses selling for over the last year. Doesn’t trust the agent or her son but that is another issue. BIL is a good businessman and a good son and has her interests in mind. Besides if her assets get exhausted it is he & DW who will be writing checks to cover MIL’s expenses. MIL’s assets are quite adequate to cover everything up to an extended time in assisted living.

Anyone have experience with this kind of situation? Just trying to understand the legal, medical & emotional issues.

[Martha]

BIL may want a broader POA so that any assets, including the home, can be sold if necessary. Another option is to move the assets into a trust with her children as trustees. I would visit with a lawyer to see what is best for her situation. She may or may not be competent enough to do these things at this point, but having a durable POA or trust in place is better than having to get someone appointed as guardian.

She should be sure to have a health care directive as well.

[dbr]

You and your family have my sympathy with this difficult situation.

One somewhat sad but true irony is that the situation is easier if one's parent is sufficiently disabled to be unable and uninterested in attending to their own affairs as a responsible child or guardian is not then between a rock and a hard place of trying to please the principle and also do the right thing.

That aside, my experience has been that the number and complexity of affairs that can need management can be staggering. To begin with I would try to ensure that the POA extends to every possible transaction that is legally available. In my state that means a "durable power of attorney" with all optional transactions checked as included. IRS and SS require their own process for individuals to represent someone else and it may behoove you to proceed to get your mother's agreement to the appropriate paperwork. Also adding someone's signature to the safe deposit box access may be extremely helpful to you at some point. I assume such things as medical power of attorney, living will, etc. have also been dealt with so someone in the family can manage her medical affairs.

Another consideration that is most helpful is to find out now where all the priciple's assets are held with an eye to consolidating things if possible. Sometimes not completely mentally alert people hide pension checks, SS checks etc. Arranging to have all these direct deposited in an account that one of you can access is very helpful. Also setting up accounts as Pay on Death or Transfer on Death to the appropriate beneficiaries is most helpful. Be sure you have located and documented all existing insurance policies, titles to vehicles, deed to the home, etc. now. Also, no joke, find out behind which wall the stash of Krugerands has been hidden. I can personally attest that such things happen in real life.

A tool that may or may not be useful to you is convincing your mother to move all here assets into a revocable trust so that the exercise of finding everything and getting ahold of all of it later is much simplified. Legal advice is mandatory.

It is also important to consider elder care issues such as medicare, nursing home expenses, transfer of assets by gifts and disqualification of gifts in anticipation of death, etc. If the assets are significant and nursing care may be long term an elder care attorney might be worth a visit.

I would not want to wander into family disputes (the son), other than to say the more explicitly things are outlined in legal language (will, beneficiaries, etc.) the better.

Good luck

[dbr]

I should add that all postings by me are opinions only and not legal advice.

[bigla]

I had to take over my dad's finances including selling his condo in FL. His condo was in a trust and I am a trustee but according to his/our Fl. family lawyer, we needed 2 letters from MD's saying he was unable to make financial decisions for himself. Fortunately we had no problem getting those as his MD's knew he had Alzheimers. An all purpose Durable POA is essential along with whatever else her state requires I would consult an attorney in her state as each state may have some differences in its requirements.
Good luck
Larry

[MikeD]

We had a similar situation with my MIL. My wife found out a LOT of places (can't remember particulars due to my own memory probs) refused to take POAs. They just said no and due to fear of lawsuits (which they stated out loud) said there was no way to do things that a POA is supposed to allow. We are in Northern Virginia in Fairfax County.

Mike D.

[bigla]

If your durable POA specifically allows you to handle certain transactions then I would not take no for an answer. Many of the first line people you deal with do not understand or want to deal with POA's. I would insist on speaking to a supervisor or the legal dept. They do have the right to request a copy (even certified copy) but legally they can not stop you from acting upon it. If it is old, they may ask you to have a form that is signed, notarized etc. that says it is still in effect.
It's hard enough trying to take care of your parent's finances/life and come up with a lot of nonsense that makes it more difficult if not impossible.
Larry

[dbr]

I never had any trouble with a POA in cases for which the POA was the usual tool. As I mentioned before, there are situations where the POA will not suffice. The IRS is one.

[Milton]

Quote:

Originally Posted by bigla It's hard enough trying to take care of your parent's finances/life and come up with a lot of nonsense that makes it more difficult if not impossible.

So true.

[2B]

DW has the POA for her parents. It was total so she had the power to sell their house. It was their only substantial asset and they were on a short path to being out of cash. DW tried for months to convince my FIL (Alzheimer's) that the house needed to be sold. His answer was always "I don't want to sell my house." This went on until it was close to being critical and DW sold the house without involving him.

DW was going to sit down with him the next day to break it to him gently. My FIL was informed of the actual sale by a "helpful" neighbor on the day it sold -- a sold sign in the yard. He called and screamed and threatened my wife to try to make her undo the sale. She reexplained to whole situation to him. He got over it. It's been about 6 months and he hardly ever mentions the house. When he does, it's like he still has it.

Sometimes you got to do what you got to do. You will never be able to "reason" with someone with Alzheimer's or most forms of dementia.

If the POA is limited and won't allow a house sale, the unfortunate next step is Probate Court to get guardianship. It will cost money but it will let the process continue where it needs to go. The other alternative is to "trick" her by giving her a total POA to sign.

The only paperwork issue we had on using the POA was with the title company. They wanted to be very sure that my in laws were both alive on the day of the closing. That was handled through their nursing home/assisted living facility.

[bigla]

When I sold my dad's condo, the title company made things difficult. While we had a certified true copy of the POA, they insisted on the original, which necessitated a flight back to my home and back at a cost of $800 to get the original.
I know supposedly they are trying to protect evryone including their butts but what a pain.
Larry

[happy2bretired]

This is a little off the subject but when I was in the hospital a couple months ago the hospital want the original POA not a copy also. So originals must be very important, not just certified copies.

[Martha]

It is a good idea to have multiple originals, but be sure to keep track of them.

[ziggy29]

My dad passed away in 2005, and he was the "financial planner" of the household. Since then I've handled most of my mom's financial planning (investing, estate planning, tax preparation and minimization, et cetera). It seems that a couple of times a month when I talk to her I mention what I'm doing to help her understand it. She seems to get a bit of it, but she's 72 and never really had to do this sort of thing in her life, so once in a while when she starts getting confused or overwhelmed, I can tell because she says "it's okay. I trust you." She reminds me it's my own inheritance I'd be screwing up if I blew it. Of course, I'd also be facing the ire of my siblings who have the same share as I will.

They had a taxable account and an IRA with Vanguard. Dad moved everything to a money market shortly after he was diagnosed as terminal, while he was still of sound mind, to make it easier for my mom. But she doesn't ever touch the taxable account and doesn't need it for income, so I started moving it all to more tax-efficient investments where she's not paying taxes on money she doesn't need. I also plan to invest some of the IRA (about $220K) soon, but I haven't decided how to do it. I may DCA it since it's an IRA and I think the market is pricey now.

We had to change some of her will and beneficiaries to her IRA because one of my brothers is on SSI and Medicaid and can't inherit his share without losing eligibility. We changed the IRA to exclude him and create a special needs trust upon Mom's death in place of it.

[2B]

Quote:

Originally Posted by happy2bretired This is a little off the subject but when I was in the hospital a couple months ago the hospital want the original POA not a copy also. So originals must be very important, not just certified copies.

We had several people say they wanted the original. I talked to a lawyer in Texas and he told me they don't need it. They are completely covered with a medallion guaranteed copy. On it the person with the POA will state that this is still in force. We've had people say they wanted a medallion guarantee less than 90 days old so we have made multiple visits to the bank. When we give a POA, we never see it back. There is only one original and it isn't leaving the safe deposit box except to be copied at the bank.

If you ever have to deal with the county or state government in Texas, you need the POA "certified" by the county clerk. So far, we haven't had to do that.