Advice on getting a POA against someones wishes

[Doribe]

I have a friend that is married to a person with Huntington's disease. The spouse thinks he has good judgement but he has a plan to use all of his 401k to buy 15 acres of wooded land in a resort community. He plans to cut down trees himself and build himself a house. The acreage is next to his brother's property and his brother is encouraging him. The brother wants to save up to later buy five of the acres in the future.

About three years ago he went on disability because he could not physically handle his part time job in a nursery. He took early Social Security and only has a small income.

He has no money other than about $1700/month SSI and the $120k in his 401k. My friend has a house with a mortgage and her own SSI and 401k. She has her house in something called a Lady Bird Trust. They are 65 (wife) and 64 (husband).

My friend has no intention of going with him and would like to stop his financial actions. How can she present this to his doctor to get control of his finances.

I am trying to help her as much as I can with getting information.

They go to couples therapy but he refuses to discuss the details of his land deal.

A few months ago he connected his 401k account to a porn site and was racking up charges. I told her how to change his password so he could not access from the porn site email link. That seemed to work for that specific problem.

The last time my friend spoke with his doctor, the doctor said he was not there yet. I think she should build a case to show the doctor how unreasonable his plan is. To be clear, he plans on cutting down each tree and building a house. The area is a resort community in the Ozarks. Even if he could physically do this he would need money for tools, materials, permits, etc.


Thanks for any help.

 

[Letj]

I don’t know if it’s worth the effort given the amount of money he has in the 401K. By the time he pays the tax, he won’t have much left. It’s seems a lot of stress involved to stop him from spending this money albeit it’s his life savings. This may not be what you want to hear but I think the wife should focus on safeguarding her assets from him. Now, had it been a more substantial sum, I would have a different opinion. Btw, land must be really cheap in the Ozarks. YMMV.

 

[Doribe]

Thanks for your input. I didn't think about that. That may put the brakes on the whole deal.

On second thought, he can spend without a care. They as a couple will be responsible for the tax. How can she protect herself from his tax liability? He plans to move on this in January 2022.

 

[rodi]

What you are talking about is conservatorship or guardianship - depending on the state. You can't get POA without consent of the person granting POA. Guardianship is issued by the court when a person is declared incompetent. My husband is financial guardian of his mom, and his brother is guardian of person (medical) of his mom. This was necessary due to dementia. But MIL did not want to grant POA and it went to court after psychiatric evaluations, social worker evaluations, etc.

It's a lot of work and will create bad will between the parties if the spouse is still competent.

 

[Teacher Terry]

It’s really difficult to be declared incompetent. If you can draw a picture of a clock and set it for the correct time, know the date, president, etc you will pass. Does that disease affect the mind?

 

[Doribe]

Huntington's disease is like Alzheimer's, ALS, and Parkinson's all rolled into one.

 

[Teacher Terry]

Doribe, wow that sounds awful! So sorry for your friends going through this.

 

[RobbieB]

Since he's going to buy the land and she isn't going to go, just file divorce.

 

[Doribe]

Since he's going to buy the land and she isn't going to go, just file divorce.

She is hoping to stop him. They need their combined income to make it.

I sent her an email explaining the tax liability on the 401k. That might be enough for him to stop and reevaluate his plan.

She doesn't really want to see him make such a bad mistake when he is not mentally or physically able to make his plan work.

 

[pb4uski]

Do they have a CPA or trusted financial advisor who the husband might listen to?

I would focus on the federal and state income taxes paid on the one-time withdrawal and the impact on financial flexibility. It may we'll be that there isn't enough from the IRA to buy the land after paying federal and state income taxes.

If he goes forward she could refuse to sign a joint tax return and insist on filing married filing separately to avoid getting wrapped up in his tax liabilities.

Or perhaps he can buy the land using a mortgage, though I suspect that getting a mortgage to buy raw land might be difficult and that should tell him something.