How does one protect MIL's assets from herself?

[CRLLS]

MIL is in failing health, she is currently receiving 24hr in-home care. She has a living trust and is still acting as the trustee. Based on some recent visits with her, DW has noticed a sharp decline in her cognitive functions and will soon be trying to get MIL to voluntarily step down as trustee where the named co-trustees would take over as trustee. This would prevent MIL from making some not-so-good decisions to trust property. She already has been tricked by a couple of scam phone calls where they asked for personal info and she has foolishly given that info to the callers. Those 2 incidences have now been taken care of.

Should DW be successful in getting MIL to step down as trustee, the next step would be to find a way to protect MIL‘s non-trust assets such as IRA’s, CD’s, bank accounts and such from herself. One of her children already has Durable Power of Attorney for Property where it gives them the authority to act on all of MIL’s personal assets, but it doesn’t prevent MIL from also accessing those accounts. We would like MIL to do this willingly, while she can still do so, before her faculties decline much further. She has her good hours and her not-so good hours.

Any advice in how to protect MIL from a foolish mistake would be welcomed.

 

[pb4uski]

My mother was originally the sole trustee of her living trust. A couple years ago she agreed to change the trustees to her, me and my sister... with the actions of any two of us sufficient to made decisions for the trust. Mom has little interest in the trusts and between SS and rent from a commercial property that the trusts own and I manage that provides for all her needs and then some.

It made it easier that when my dad passed the three of us became co-trustees of his trust so she was familiar with that structure.

 

[Koolau]

It is possible to legally wrest control from someone who is not competent to attend to their own affairs. BIL did so with MIL. It turned out to only require one court hearing because MIL chose not to fight it. It went fairly smoothly but it could have been a real horror show. The family backed BIL and were ready to testify to "issues" but thank God it was not necessary. It could have wrecked a fragile relationship between MIL and the rest of the family. Very much a YMMV situation. Be sure whoever wants to be "in charge" can do it and keep records, etc. Again, a very strong YMMV way to go.

 

[CRLLS]

I don't think that her relinquishing her trustee position in her trust will be a big problem. It may take a bit of persuasion, not to the point of arm twisting of course. Nobody wants to do that and it could not be defended if somebody tried to contest it. I think if she pushes back, then the 2 out of 3 might be acceptable. If she refuses, then sometime soon I think we may have to go the court route when she does become obviously incompetent. We are thinking about the interim before then. When I say we, I mean her family. I am only advising and supporting DW in her role.

It is the her personal financial entities that are not in the trust that I am more concerned about protecting right now. I know she could put her bank accounts into the trust, thereby protecting her from some inadvertent mistake. Can one put assets into a revocable trust after you are no longer the trustee or must it be before she steps down? Is it even possible to have her voluntarily relinquish any control over IRA's etc or must it be a court appointed administrator? If so, what vehicle would that be? She has enough assets that if she lost it all, it could really change her level of care as she might have to go into a Medicaid facility. We don't want that for her.

 

[Brat]

I would have your spouse meet with siblings to develop a plan to protect their mother and at her passing their inheritance.

It is a POA to establish a new trust account at a bank, I know because DH and I did that about a year ago. Keep in mind the fact that you will also need to change automatic withdrawals for health insurance, etc. It may be easier to establish a trust checking account at the brokerage (at least at Fidelity); provide a copy of the trust (title page, signature page with trustee signatures). One way to protect the IRAs is to change the password in the broker account login. Change the password on her online banking account. She doubtless has minimum required distributions so check to see where that money is going.

Can a trusted member of the family keep all copies of her blank checks and ATM card? Have that person pay her bills. Tell MIL that the family wants to assume that responsibility and will prepare a report every month of her income, expenditures, and account balances, meeting privately in person with her (don't leave any account number info with her to inadvertently share with a caregiver or scammer).

 

[CRLLS]

I would have your spouse meet with siblings to develop a plan to protect their mother and at her passing their inheritance.

It is a POA to establish a new trust account at a bank, I know because DH and I did that about a year ago. Keep in mind the fact that you will also need to change automatic withdrawals for health insurance, etc. It may be easier to establish a trust checking account at the brokerage (at least at Fidelity); provide a copy of the trust (title page, signature page with trustee signatures). One way to protect the IRAs is to change the password in the broker account login. Change the password on her online banking account. She doubtless has minimum required distributions so check to see where that money is going.

Can a trusted member of the family keep all copies of her blank checks and ATM card? Have that person pay her bills. Tell MIL that the family wants to assume that responsibility and will prepare a report every month of her income, expenditures, and account balances, meeting privately in person with her (don't leave any account number info with her to inadvertently share with a caregiver or scammer).

Auto payment is something i hadn't thought about. Thanks. As far as a "different trust account" do you mean a "different trust" or just a different account? I don't think they want to deal with another trust.

MIL still has her checkbook and her charge cards. Somebody else holding these doesn't stop her, or somebody else from accessing her accounts. Especially if the already have the numbers. Somebody else is paying the bills as they come in.

Offering to issue a monthly statement may be an acceptable middle ground. I'm not sure she could make sense of one actually. But..... just having a monthly statement may be something she may accept in place of having direct access.

 

[pb4uski]

Other than her traditional and Roth IRA's all of Mom's financial assets are in trusts so I don't see why you couldn't have the bank accounts and CDs transferred to accounts in the name of the trust... for the CDs you may need to wait for them to mature and then transfer the proceeds to new CDs in the trust's name... though I think some banks will do it anyway... effectively substituting the trust as the owner vs her personally.

Your DW can gently bring up the recent scams that she fell for as reasons why you are advocating for this... which conveniently happens to also be the truth.

 

[ncbill]

when I discovered my mom was destroying mail I quietly changed of address to me for all the critical stuff...and that was before her official dementia diagnosis.

 

[Car-Guy]

when I discovered my mom was destroying mail I quietly changed of address to me for all the critical stuff...and that was before her official dementia diagnosis.

How did you do that, "for all the critical stuff", if you care to share? It could be useful info to some of us here.

 

[JRon]

When I was faced with this I took the tough love approach and told Mom I was taking over her finances and that was it. She didn’t love it, but she didn’t fight me either. I have 5 brothers and sisters and none of them would have done it, but it needed to be done.

Now look ahead 20 - 30 years when we’re the ones in OP’s MIL situation. How would you want your kids or others to handle it and what can you do now to help that situation?

 

[Car-Guy]

When I was faced with this I took the tough love approach and told Mom I was taking over her finances and that was it. She didn’t love it, but she didn’t fight me either

That only works when the parent(s) accept it, even if reluctantly... "If" they are still "legally" competent (but maybe borderline from your POV) and refuse your tough love, forget it...

Now if they accept it or if a court decides to side with you, then of course that's a different story.

 

[CRLLS]

Other than her traditional and Roth IRA's all of Mom's financial assets are in trusts so I don't see why you couldn't have the bank accounts and CDs transferred to accounts in the name of the trust... for the CDs you may need to wait for them to mature and then transfer the proceeds to new CDs in the trust's name... though I think some banks will do it anyway... effectively substituting the trust as the owner vs her personally.

Your DW can gently bring up the recent scams that she fell for as reasons why you are advocating for this... which conveniently happens to also be the truth.

I had though to moving bank accounts and such into the trust. That should work. Do you know of any method to voluntarily give up control of IRAs & 401k's and name another to do so? Court intervention is not an option at this point.

 

[CRLLS]

That only works when the parent(s) accept it, even if reluctantly... "If" they are still "legally" competent (but maybe borderline from your POV) and refuse your tough love, forget it...

Now if they accept it or if a court decides to side with you, then of course that's a different story.

My guess is that somebody is legally competent up to the time they are declared incompetent by the courts. Borderline is probably where MIL is, leaning a little more toward competent from a personal observation. Ask me again in a few weeks, my thoughts may change.

 

[pb4uski]

I had though to moving bank accounts and such into the trust. That should work. Do you know of any method to voluntarily give up control of IRAs & 401k's and name another to do so? Court intervention is not an option at this point.

I don't know of any methods for someone to voluntarily give up control of IRAs or 401k... though my mother doesn't have any idea of what the user name and passwords to her IRAs are... in fact, I doubt that she even knows where they are but she would probably guess Vanguard since she gets mail from them occasionally. She has total trust in me... sometimes it is a bit scary.

 

[CRLLS]

I don't know of any methods for someone to voluntarily give up control of IRAs or 401k... though my mother doesn't have any idea of what the user name and passwords to her IRAs are... in fact, I doubt that she even knows where they are but she would probably guess Vanguard since she gets mail from them occasionally. She has total trust in me... sometimes it is a bit scary.

I am not privy to all the gory details, but I think MIL has an advisor, accountant, or some other type "guy" that has access to all her various accounts including her IRA accounts. She just talks to him if she needs to do something and he acts. No passwords necessary. At least that was my impression when we met with him regarding her financial status last year.

 

[ncbill]

How did you do that, "for all the critical stuff", if you care to share? It could be useful info to some of us here.

Utility bills, bank/brokerage accounts...she had already asked me help with the latter so I had online access to her accounts, but I could have used her DPOA instead & gone into a local branch to do so.

Once she was officially diagnosed we used a local eldercare lawyer to setup a revocable living trust with myself as co-trustee (not successor) & then used her DPOA to transfer all assets into the trust...by that time I was handling all her affairs anyway.

 

[CRLLS]

To finalize this thread, MIL passed in her sleep in late August. Nothing was done to change trustees or to move the accounts into the trust. Too many other things to deal with took precedence in those last days. DW and her sister are now successor co-Trustees and co-Executors. It is a mess as they keep finding more unknown small accounts here and there each with their own beneficiaries. MIL was not very organized. This will be a chore to manage the estate and the trust to their inevitable ends. The hope of protecting her from herself is no longer an issue. Thanks for all the good ideas. It may help us in our own finances

 

[Jerry1]

My condolences to your DW and your family in general. Sad to lose a family member no matter the extenuating circumstances.

Best wishes as DW and at some level, you, handle the estate. Agree with your final sentence. That may be the thing of most value that MIL left you.

Take care.

 

[audreyh1]

Condolences. Sounds like a peaceful passing.

 

[Koolau]

Thanks for sharing. Here is hoping the transition goes relatively smoothly. Blessings on the family.

 

[street]

Thanks for sharing. Here is hoping the transition goes relatively smoothly. Blessings on the family.

X2

 

[CRLLS]

Thank you all.

 

[CindyBlue]

I'm so sorry for your loss...and I hope that the estate will resolve sooner rather than later...

 

[Sunset]

To finalize this thread, MIL passed in her sleep in late August. Nothing was done to change trustees or to move the accounts into the trust. Too many other things to deal with took precedence in those last days. DW and her sister are now successor co-Trustees and co-Executors. It is a mess as they keep finding more unknown small accounts here and there each with their own beneficiaries. MIL was not very organized. This will be a chore to manage the estate and the trust to their inevitable ends. The hope of protecting her from herself is no longer an issue. Thanks for all the good ideas. It may help us in our own finances

Condolences on your loss.
I have found, it will be a process of many many months, even if you avoid probate.
I did find it amusing in our case, of all the accounts with varying beneficiary allotments, often based on order of the beneficiary

It did make me check mine, and I found I was missing an account with beneficiary, so had to fix it.