Financial planning for mom now and after her death

[steady saver]

I could use some direction here. My dad died a year and a half ago. One sister and I are durable POA for mom and two other sisters are Medical POA.

I started reading My Mother's Money by Beth Pinsker, CFP and it struck me that having the durable POA is only helpful while she is alive...duh. Mom is now in independent living though only for the past 7 weeks and she has already moved some of her things back home - twice. Right now she seems resigned to stay in her new place, though we've not had permission to put her house up for sale yet. She has been extremely difficult to work with and we all see her memory lapses and confusion showing up. Setting that aside, as the designated "money person" among the siblings, I need to get all of my ducks in a row.

Up until recently, mom was competent to handle all of her own affairs (check writing, etc) but now that feels tenuous. When I go to see her next month (we do not live in the same state), I need a plan on what to get done. I'd read that being a joint signer on her checking account is not necessarily the best idea and I know I at least need to get a transfer on death beneficiary put on that account. Do I put only myself on that? Or all 4 siblings? (Her assets will be distributed even among her daughters, though my husband and I plan to distribute our portion to a sister that could use the money more than us.)

And with her Vanguard individual account, what is the best way to handle that? I did do the specific forms for Vanguard for POA on that account but is there more I should do? It's not an especially large account but is a significant portion of her portfolio.

Finally, she has an account with Edward Jones that had a CD that she did not reinvent when it came up and then dad died a couple of weeks later and she didn't want to do anything with it so it is just sitting there as well.

I'm just realizing how much I don't know and I feel like a lot of people are counting on me to know what I'm doing. I appreciate any input you might offer.

Thanks.

 

[steady saver]

Ironically, there was an article about the author of this book on The Guardian today (Apple News)...
And meant to say that I plan to take my POA to her bank and Edward Jones when I'm in town...

 

[ducky911]

You didn't mention if there was a trust. Not the best at advice on this. In my case I was the trustee on the trust and was a signer on the checking account and brokerage firm. There was about a month after death where it felt like my full-time job (just an hour or two a day) jumping hurtles. If the house is in a trust when you sell it the escrow company will make a check out to the trust it is easiest to have the checking account in the trust name so you can deposit the check.

 

[SecondCor521]

I could use some direction here. My dad died a year and a half ago.

My condolences on the loss of your Dad and the challenges you're facing with your Mom.

One sister and I are durable POA for mom and two other sisters are Medical POA.

I started reading My Mother's Money by Beth Pinsker, CFP and it struck me that having the durable POA is only helpful while she is alive...duh.

Correct. The moment your Mom passes away, your Mom's POAs are null and void. From that point onward, her executor is in charge of financial matters and is responsible for executing her wishes as outlined in her will. If she has any trusts, the successor trustee would be responsible for executing the instructions in the trust document.

Mom is now in independent living though only for the past 7 weeks and she has already moved some of her things back home - twice. Right now she seems resigned to stay in her new place, though we've not had permission to put her house up for sale yet. She has been extremely difficult to work with and we all see her memory lapses and confusion showing up.

Although it does make everything else hard, being difficult is a reasonable response and probably follows from her recognition that she is in decline mentally and probably physically as well - it's not a pleasant prospect and most people don't face it and deal with it well and just accept it.

Setting that aside, as the designated "money person" among the siblings, I need to get all of my ducks in a row.

Up until recently, mom was competent to handle all of her own affairs (check writing, etc) but now that feels tenuous. When I go to see her next month (we do not live in the same state), I need a plan on what to get done.

Since you have POA, you can offer to take the tedium off her hands so she can relax and just enjoy life. Expressing it that way is more likely to succeed than "Mom, you can't handle your bills, let me take over" even though functionally it is equivalent.

I had durable POA for my Dad, and we did shift over time from (a) me just having the document but not using it to (b) seeing his decline and just monitoring what was going on financially to (c) monitoring and fixing stuff behind the scenes, to (d) taking the tedium off his hands with his agreement to (e) consulting with him on everything to (f) only checking the major / uncertain decisions, to (g) doing everything and not even discussing it with him.

If she agrees to let you, great; if not, you probably want to be in the monitoring stage and maybe fixing things behind the scenes.

I'd read that being a joint signer on her checking account is not necessarily the best idea

Correct. Take the POA to the bank and get on the account as POA. Then you can act on her behalf, but the money still flows according to her will.

and I know I at least need to get a transfer on death beneficiary put on that account.

Maybe, maybe not.

Putting TOD on it makes the distribution faster and easier because the account doesn't go through probate.

On the other hand, putting TOD on the account could make it more difficult to use those funds to pay for her final expenses (medical, burial, CC, etc.). If y'all cooperate, this is not a big problem.

In my Dad's case, we did have TOD on his checking account which was one of the things that contributed to making his probate estate small, which meant we didn't actually need to do probate with his estate.

Do I put only myself on that? Or all 4 siblings? (Her assets will be distributed even among her daughters, though my husband and I plan to distribute our portion to a sister that could use the money more than us.)

Technically your POA probably doesn't allow you to name beneficiaries on her account. You should read the POA in conjunction with her state's laws on POAs to see if you have the power to do so before taking action.

Generally, POAs, even ones that say "this person can do anything I could do" are actually limited by state law. In my state (and this is common), even a broadly written POA does not give the agent the power to make gifts, due to the potential for conflict of interest: "Hey, I just used the POA to give myself all of their money!" (Not that you would do this, just pointing out the reasoning.)

If it does, or if Mom is still competent, then I would suggest doing whatever she wants or what you believe she would want. Since you state she wants even distribution, then you should list all four siblings.

You can always make a gift to the other sibling as a later, separate act.

And with her Vanguard individual account, what is the best way to handle that? I did do the specific forms for Vanguard for POA on that account but is there more I should do? It's not an especially large account but is a significant portion of her portfolio.

I would ensure that it has beneficiaries listed in a way which represents her wishes and coordinates with her will. Probably just listing each sibling as a 25% beneficiary.

If any of the siblings are interested in disclaiming part of their part of the Vanguard account and/or if your Mom would have wanted a sibling's portion to go to that sibling's children rather than the other three siblings, you likely want to list each sibling as "Jane Doe per stirpes".

I'd probably print out a copy of the beneficiary designations and put it in a folder just in case. My Dad's Vanguard account was handled properly, but it's good to have your own copies of important paperwork.

Finally, she has an account with Edward Jones that had a CD that she did not reinvent when it came up and then dad died a couple of weeks later and she didn't want to do anything with it so it is just sitting there as well.

If your Mom's OK with it, I would have Vanguard pull the EJ account assets over to Vanguard and then close the EJ account.

Each account a person has when they pass away means another set of forms, another copy of the death certificate, another set of emails, another distribution, etc. Conceptually it is simple, but in practice the burden becomes heavy while you're grieving, and sometimes institutions are just a pain to deal with for no apparent reason. Case in point, my sister has spent three months, hours on the phone, five different paperwork submissions, and three copies of the death certificate just with one life insurance company.

So to the extent you can, I would start simplifying. Cancel unused and unneeded credit cards, consolidate bank accounts, consolidate investment accounts. If you are certain she's not going to need them and the siblings concur, you could sell the house and/or car.

I'm just realizing how much I don't know and I feel like a lot of people are counting on me to know what I'm doing. I appreciate any input you might offer.

Thanks.

I would suggest reading any Nolo Press books on the subject.

Also, the laws in this area are moderately complex and vary state by state. Well meaning advice from other people on the Internet, including me, are not necessarily great because (a) we probably live in a different state from your Mom, (b) we probably went through a different situation than you and your family and so we'll project our experience onto you, and (c) we don't know all of the information about your Mom's whole financial and medical picture, so we might fill in the blanks with our own experiences or assumptions.

So really the best source of advice is probably an estate attorney and/or tax professional (EA or CPA) in your Mom's state. Of course professional advice like that can cost some money and be inconvenient to get if you live out of state and can occasionally be self-serving.

My advice anyway: (0) spend time with and take care of your Mom first and the money second, (1) simplify as much as you can, (2) document as much as you can, (3) communicate with your Mom and your siblings as much as you can.

Good luck!

 

[ncbill]

Revocable living trust with one or more children as co-trustees (NOT successor) would be the easiest for those managing her financial affairs, IF the OP can get mom to agree.

The DPOA agents then move all financial & real estate into the trust.

Though when I used them the elderlawyer handled any real estate as part of their fee for the trust.

 

[FREE866]

My condolences on the loss of your Dad and the challenges you're facing with your Mom.



Correct. The moment your Mom passes away, your Mom's POAs are null and void. From that point onward, her executor is in charge of financial matters and is responsible for executing her wishes as outlined in her will. If she has any trusts, the successor trustee would be responsible for executing the instructions in the trust document.



Although it does make everything else hard, being difficult is a reasonable response and probably follows from her recognition that she is in decline mentally and probably physically as well - it's not a pleasant prospect and most people don't face it and deal with it well and just accept it.



Since you have POA, you can offer to take the tedium off her hands so she can relax and just enjoy life. Expressing it that way is more likely to succeed than "Mom, you can't handle your bills, let me take over" even though functionally it is equivalent.

I had durable POA for my Dad, and we did shift over time from (a) me just having the document but not using it to (b) seeing his decline and just monitoring what was going on financially to (c) monitoring and fixing stuff behind the scenes, to (d) taking the tedium off his hands with his agreement to (e) consulting with him on everything to (f) only checking the major / uncertain decisions, to (g) doing everything and not even discussing it with him.

If she agrees to let you, great; if not, you probably want to be in the monitoring stage and maybe fixing things behind the scenes.



Correct. Take the POA to the bank and get on the account as POA. Then you can act on her behalf, but the money still flows according to her will.



Maybe, maybe not.

Putting TOD on it makes the distribution faster and easier because the account doesn't go through probate.

On the other hand, putting TOD on the account could make it more difficult to use those funds to pay for her final expenses (medical, burial, CC, etc.). If y'all cooperate, this is not a big problem.

In my Dad's case, we did have TOD on his checking account which was one of the things that contributed to making his probate estate small, which meant we didn't actually need to do probate with his estate.



Technically your POA probably doesn't allow you to name beneficiaries on her account. You should read the POA in conjunction with her state's laws on POAs to see if you have the power to do so before taking action.

Generally, POAs, even ones that say "this person can do anything I could do" are actually limited by state law. In my state (and this is common), even a broadly written POA does not give the agent the power to make gifts, due to the potential for conflict of interest: "Hey, I just used the POA to give myself all of their money!" (Not that you would do this, just pointing out the reasoning.)

If it does, or if Mom is still competent, then I would suggest doing whatever she wants or what you believe she would want. Since you state she wants even distribution, then you should list all four siblings.

You can always make a gift to the other sibling as a later, separate act.



I would ensure that it has beneficiaries listed in a way which represents her wishes and coordinates with her will. Probably just listing each sibling as a 25% beneficiary.

If any of the siblings are interested in disclaiming part of their part of the Vanguard account and/or if your Mom would have wanted a sibling's portion to go to that sibling's children rather than the other three siblings, you likely want to list each sibling as "Jane Doe per stirpes".

I'd probably print out a copy of the beneficiary designations and put it in a folder just in case. My Dad's Vanguard account was handled properly, but it's good to have your own copies of important paperwork.



If your Mom's OK with it, I would have Vanguard pull the EJ account assets over to Vanguard and then close the EJ account.

Each account a person has when they pass away means another set of forms, another copy of the death certificate, another set of emails, another distribution, etc. Conceptually it is simple, but in practice the burden becomes heavy while you're grieving, and sometimes institutions are just a pain to deal with for no apparent reason. Case in point, my sister has spent three months, hours on the phone, five different paperwork submissions, and three copies of the death certificate just with one life insurance company.

So to the extent you can, I would start simplifying. Cancel unused and unneeded credit cards, consolidate bank accounts, consolidate investment accounts. If you are certain she's not going to need them and the siblings concur, you could sell the house and/or car.



I would suggest reading any Nolo Press books on the subject.

Also, the laws in this area are moderately complex and vary state by state. Well meaning advice from other people on the Internet, including me, are not necessarily great because (a) we probably live in a different state from your Mom, (b) we probably went through a different situation than you and your family and so we'll project our experience onto you, and (c) we don't know all of the information about your Mom's whole financial and medical picture, so we might fill in the blanks with our own experiences or assumptions.

So really the best source of advice is probably an estate attorney and/or tax professional (EA or CPA) in your Mom's state. Of course professional advice like that can cost some money and be inconvenient to get if you live out of state and can occasionally be self-serving.

My advice anyway: (0) spend time with and take care of your Mom first and the money second, (1) simplify as much as you can, (2) document as much as you can, (3) communicate with your Mom and your siblings as much as you can.

Good luck!

What a well thought out, generous and informative response. Well done.

 

[SecondCor521]

Here's an example of what I was just writing about.

My Dad had assets with beneficiaries and assets in a trust. We found the beneficiary accounts faster and easier than the trust assets. The former required just a death certificate; the latter required a death certificate and sending in trust paperwork and forms to get the successor trustee installed as trustee, who could then distribute. So the latter was somewhat more time and hassle.

I agree though, that trust assets are easier to transfer than going through probate, and it does provide privacy for those who want that feature.

 

[OldShooter]

Fast Eddie will almost certainly not take your POA; they will want one on their forms. But you want to ditch them anyway. (And you should.) I would suggest Fido or Scwab. Vanguard is a bit low-touch and that is not what you need while sorting an estate.

Also, get on the phone and interview a few elder law or trusts & estate lawyers in Mom's state, ideally in her town. You should not be trying to do this alone.

 

[SecondCor521]

Vanguard has a very good Change of Ownership team and they were quite competent and available as much as we needed during both my Mom and Dad's estate administration in 2016 and 2026. My Dad's estate involved multiple Vanguard account types, 12 beneficiaries, disclaimers, a trust account, and basis adjustments and it was all handled well. We were assigned a single point of contact who always responded accurately, completely, and competently within one business day.

I'm sure Fidelity and Schwab also do perfectly well, but I wouldn't steer away from Vanguard due to estate administration concerns.

 

[Teacher Terry]

Here's an example of what I was just writing about.

My Dad had assets with beneficiaries and assets in a trust. We found the beneficiary accounts faster and easier than the trust assets. The former required just a death certificate; the latter required a death certificate and sending in trust paperwork and forms to get the successor trustee installed as trustee, who could then distribute. So the latter was somewhat more time and hassle.

I agree though, that trust assets are easier to transfer than going through probate, and it does provide privacy for those who want that feature.

This is the reason I didn’t put my savings and checking accounts into my trust but just put 2 of my kids on to be paid on my death. I wanted them to have instant access to some of my money.

 

[OldShooter]

I'm sure Fidelity and Schwab also do perfectly well, but I wouldn't steer away from Vanguard due to estate administration concerns.

Good to know. I have nothing against VG except that their low-touch approach seemed to be less than desirable in this situation. So your information is good for the OP to have.

 

[SecondCor521]

Good to know. I have nothing against VG except that their low-touch approach seemed to be less than desirable in this situation. So your information is good for the OP to have.

It's fair to say that my family and I might get better support than average due to asset levels there. I appreciate it but honestly don't use it much other than that I think I get better front line CSRs.

It's also fair to say that Vanguard customer support in general has declined over time. They used to be excellent, now they are about average.

Fidelity and Schwab also have occasional customer support issues and are also good about customer support. I think they have closed some or most of the cost gap over the years too. I have some accounts at Fidelity and my kids have accounts at Schwab, and I'm essentially custodian agnostic among the big three. I'm with Vanguard mostly now due mostly due to inertia.

But Vanguard is still competent even as they remain low cost, and the average customer support doesn't mean they're generically bad.

 

[junkanoo]

I started reading My Mother's Money by Beth Pinsker, CFP and it struck me that having the durable POA is only helpful while she is alive...duh. Mom is now in independent living though only for the past 7 weeks and she has already moved some of her things back home - twice. Right now she seems resigned to stay in her new place, though we've not had permission to put her house up for sale yet. She has been extremely difficult to work with and we all see her memory lapses and confusion showing up. Setting that aside, as the designated "money person" among the siblings, I need to get all of my ducks in a row.

First and foremost, sorry about your mom's situation.

Unfortunately, caring for someone's financial situation is a learn-as-you-go activity no matter how much you may read about it and as you noted, it can be quite stressful.

You didn't mention how old your mom is. Obviously, I don't know whether she has a likely number of years of life remaining or much, much shorter. That said, *if* your mom's house has greatly appreciated since she bought it, the better it would be (all things else being equal) to inherit the property and get the step-up on its value.

 

[steady saver]

My condolences on the loss of your Dad and the challenge

Thank you so much for such a thorough and thoughtful response. It is very helpful. I really appreciate the time you took to do so.

A couple of things I failed to mention. The sister that is the co-POA is also co-executor with me. Secondly, we do not have a trust.

I have consistently been purposely hands off of most things up to this point because mom has prided herself in handling her checking account for example. She is clueless about the Vanguard account but it's not been necessary for her to do anything with it. I also started planting seeds a few months ago about taking some of the financial stuff off her hands because she deserves not to have to deal with it. I've never told her she can't handle it or that I'm concerned about her ability, her memory, etc. but that I want to be her sounding board and partner in dealing with financial issues. I can't say that is the same response she's gotten from a sister or two regarding her memory, etc. She gets defensive and angry and I would too. That's why it's been easier for me not to push her on things. Mom has historically respected my opinions and I'm glad. But more recently she seems suspicious of all of us b/c we all get lumped together. So I have to approach it with a matter-of- fact lightness, if that makes sense. I want her to feel as empowered as possible. So I think she would go to the bank to get beneficiaries assigned for example and to get me validated as her "agent" there (with the POA) so I can write checks if needed while she is still alive. She may be harder to sway on moving her money that is just sitting in EJ to Vanguard but that makes so much sense to me and I will try that. Anything to make my job easier down the road.

One thing that makes me nervous is that mom still has the credit card she had with Dad, but she is not the primary card holder. I tried to help her get her own card after his death but she was denied by the same cc company and then she had no interest in trying to get a card at her local credit union. She is ADAMANT that she doesn't need one, no matter what I tell her. So, here we are. I'm waiting for the shoe to fall on that one - natural consequences will eventually prevail... I'm assuming that at some point I'll have to start paying for things and reimbursing myself by keeping a log and taking it from her Vanguard account as needed. I've told my sisters that and want them to know they can look at records at any time. Luckily, they trust me and I'd never want to give them any reason not to.

Unfortunately, both the other POA sister and I are the out of town daughters. The in town sisters are currently not speaking to one another. It is most disappointing and has been beyond stressful.

I spent 6 months trying to get my dad's pension payment straightened out for mom. It was a nightmare. It wasn't entirely my dad's fault; he had just been retired long enough that that particular pension program had switched hands so many times that they were refusing to pay. On top of that, Dad had wanted me to "handle everything" having made meticulous notes "at one time" but he would never give me passwords or direct access to his accounts while he was alive. He grew very suspicious and very controlling. I just want to put safeguards in place to avoid that with mom. And to maintain some semblance of my own sanity. Over this past year and a half, DH have been renovating (from the studs) our old farmhouse and we received a horrible health diagnosis for DH in January. It has been overwhelming. I just want to do anything I can to streamline and simply things in every area of my life. I want to be there for mom do it right, but I don't have the same bandwidth I used to have.

Thanks again for your input.

 

[steady saver]

First and foremost, sorry about your mom's situation.

Unfortunately, caring for someone's financial situation is a learn-as-you-go activity no matter how much you may read about it and as you noted, it can be quite stressful.

You didn't mention how old your mom is. Obviously, I don't know whether she has a likely number of years of life remaining or much, much shorter. That said, *if* your mom's house has greatly appreciated since she bought it, the better it would be (all things else being equal) to inherit the property and get the step-up on its value.

Thank you junkanoo. Mom is 88, turning 89 in Nov. Her health is okay, not great. Mainly knee and shoulder issues. Now questioning the possibility of dementia setting in.
Mom and Dad had downsized several times and she currently owns their patio home. I'm guessing it's value to be roughly $250K about $100K over what they purchased it for over a dozen years ago. I'm not sure I understand about the "step up" in value idea.
None of us want to maintain the home so it would make everyone's life easier to sell it. And she would need the money if she lived a long time or had memory care needs. You do have me curious, however, about the two options.

 

[steady saver]

Fast Eddie will almost certainly not take your POA; they will want one on their forms. But you want to ditch them anyway. (And you should.) I would suggest Fido or Scwab. Vanguard is a bit low-touch and that is not what you need while sorting an estate.

Also, get on the phone and interview a few elder law or trusts & estate lawyers in Mom's state, ideally in her town. You should not be trying to do this alone.

I would love to switch everything to Fidelity (which is what we use). We have an advisor we trust and who would be helpful in that transfer. It probably would make my life easier once the switch was made. I'm just afraid that would raise concern and suspicion with mom on the days when she's in her defensive posture.

 

[SecondCor521]

Thank you so much for such a thorough and thoughtful response. It is very helpful. I really appreciate the time you took to do so.

No worries.

A couple of things I failed to mention. The sister that is the co-POA is also co-executor with me. Secondly, we do not have a trust.

I have consistently been purposely hands off of most things up to this point because mom has prided herself in handling her checking account for example. She is clueless about the Vanguard account but it's not been necessary for her to do anything with it. I also started planting seeds a few months ago about taking some of the financial stuff off her hands because she deserves not to have to deal with it. I've never told her she can't handle it or that I'm concerned about her ability, her memory, etc. but that I want to be her sounding board and partner in dealing with financial issues. I can't say that is the same response she's gotten from a sister or two regarding her memory, etc. She gets defensive and angry and I would too.

Defensiveness and anger are normal human responses. They also may be a symptom of dementia. You may want to consider helping your Mom get evaluated by a doctor, preferably one who has experience with dementia patients.

That's why it's been easier for me not to push her on things. Mom has historically respected my opinions and I'm glad. But more recently she seems suspicious of all of us b/c we all get lumped together.

Suspicion and lumping you together could also be dementia. See above.

So I have to approach it with a matter-of- fact lightness, if that makes sense. I want her to feel as empowered as possible. So I think she would go to the bank to get beneficiaries assigned for example and to get me validated as her "agent" there (with the POA) so I can write checks if needed while she is still alive. She may be harder to sway on moving her money that is just sitting in EJ to Vanguard but that makes so much sense to me and I will try that. Anything to make my job easier down the road.

One thing that makes me nervous is that mom still has the credit card she had with Dad, but she is not the primary card holder. I tried to help her get her own card after his death but she was denied by the same cc company and then she had no interest in trying to get a card at her local credit union. She is ADAMANT that she doesn't need one, no matter what I tell her. So, here we are. I'm waiting for the shoe to fall on that one - natural consequences will eventually prevail...

This surprises me. Once the CC company hears that the cardholder has passed away, they typically lock the entire account immediately. So maybe they don't know your Dad has passed away, or they're incompetent, or your Mom is in fact the primary account holder, or your Mom is a joint holder.

I'm assuming that at some point I'll have to start paying for things and reimbursing myself by keeping a log and taking it from her Vanguard account as needed.

If you have POA, you can probably get an authorized user card on your Mom's CC account, or even use her card. That way you can buy stuff for her with her card, and pay her CC balance from her bank account. That keeps everything much cleaner and clearer for you and your siblings.

I've told my sisters that and want them to know they can look at records at any time. Luckily, they trust me and I'd never want to give them any reason not to.

I'm glad for you, but be aware that can change in the future.

Unfortunately, both the other POA sister and I are the out of town daughters. The in town sisters are currently not speaking to one another. It is most disappointing and has been beyond stressful.

It was a high priority for me to maintain my relationships with my sisters through the stress of losing our father. I'm grateful that we seem to be doing well on that front so far.

I spent 6 months trying to get my dad's pension payment straightened out for mom. It was a nightmare. It wasn't entirely my dad's fault; he had just been retired long enough that that particular pension program had switched hands so many times that they were refusing to pay. On top of that, Dad had wanted me to "handle everything" having made meticulous notes "at one time" but he would never give me passwords or direct access to his accounts while he was alive. He grew very suspicious and very controlling. I just want to put safeguards in place to avoid that with mom.

With a proper POA, and persistence, and knowing where all the accounts are, you should be able to get put in place as agent everywhere, then transact on her behalf pretty easily.

When my Dad handed things over, about two years before he passed away, I went through then and made sure I was on file as agent everywhere. I also changed the mailing address, phone number, and email on everything from his to mine. It took a while, because there were about 25 places to deal with - he only had about five accounts but there were things like his Amazon Prime subscription and so forth. But I'm glad I did it then, because it made things so much easier after he passed away.

And to maintain some semblance of my own sanity. Over this past year and a half, DH have been renovating (from the studs) our old farmhouse and we received a horrible health diagnosis for DH in January. It has been overwhelming. I just want to do anything I can to streamline and simply things in every area of my life. I want to be there for mom do it right, but I don't have the same bandwidth I used to have.

It's good that you recognize the need to care for yourself and your DH (sorry to hear about his diagnosis!) I knew about it and did some self care but in retrospect probably not enough. You need to take care of yourself and your family so that you can help - with your siblings - take care of your Mom.

Thanks again for your input.

Sure. Good luck.

 

[SecondCor521]

Thank you junkanoo. Mom is 88, turning 89 in Nov. Her health is okay, not great. Mainly knee and shoulder issues. Now questioning the possibility of dementia setting in.
Mom and Dad had downsized several times and she currently owns their patio home. I'm guessing it's value to be roughly $250K about $100K over what they purchased it for over a dozen years ago. I'm not sure I understand about the "step up" in value idea.
None of us want to maintain the home so it would make everyone's life easier to sell it. And she would need the money if she lived a long time or had memory care needs. You do have me curious, however, about the two options.

Not junkanoo, but I agree with them about the step up in basis.

Here's the deal:

When you sell the house:

1. If you do it before she passes away, generally speaking she would owe LTCG on the sales price minus the purchase price minus selling expenses minus capital improvements minus a $250K capital gains exclusion if the sale met certain criteria, which it probably does. So in her case it would probably be zero, but you would need to verify that she meets those criteria. And if your Mom lived in California where there has been massive home price increases over time who has $750K of increased home value would owe LTCG on $500K.

2. If she gifts the house to you or your siblings while alive, then the recipient of the house would be in the same tax situation as in case 1 above. The recipients would get your Mom's purchase price. But the recipients probably wouldn't meet the criteria and therefore would not be eligible for the capital gains exclusion. So there would be LTCG taxes paid on that $100K of gain. So this is an even worse idea than case 1.

3. If she owns the house when she dies, then the house passes according to either the TOD or POD if her state has such a thing, or more likely according to her will. But instead of using the purchase price as in case 1, the basis is changed to the FMV of the house on the day she passes away. This is referred to as a step up in basis. If the heirs sell it, then they won't likely have a gain and will probably even have a loss because of selling expenses such as realtor fees.

That's the rough outline. Since your Mom's gain of $100K is less than the $250K exclusion, then if she meets those criteria (and she probably does), then you could sell it now without tax consequence if simplification is your goal. But check the rules carefully before you act to be sure.

The step up in basis is nice if you need it, but the timing junkanoo mentioned also matters. If your Mom lives another ten years, that's another ten years of property taxes, maintenance, repairs, etc. in costs.

 

[Original Wally]

ONE OTHER THING - if the POA is "springing" it is NOT valid until the condition is met. Molly and I are dealing with her sister. Molly has a SPRINGING poa that depends on SISTER being diagnosed by TWO MDs about her incapacitation. It is a struggle as Sister is in TX and Molly & I are in California. Sigh.

 

[Sunset]

I have no better advice, but will say:

POD/TOD on accounts at Vanguard were handled easily and well, like most (all?) brokerages it required the beneficiary to open a Vanguard account to get the money transferred in. Then they can keep/sell/move whatever they want.

The POD/TOD avoids probate which in IL is costly and takes a year (I'm told).

 

[steady saver]

No worries.



Defensiveness and anger are normal human responses. They also may be a symptom of dementia. You may want to consider helping your Mom get evaluated by a doctor, preferably one who has experience with dementia patients.



Suspicion and lumping you together could also be dementia. See above.

Sister had an appt for both dementia assessment and MRI scheduled last week but mom refused to go last minute. She has a new appt with a different doctor scheduled now for the end of July. My oldest sister with the Medical POA is on the ball and I so appreciate all she does in staying on top of things for mom.

This surprises me. Once the CC company hears that the cardholder has passed away, they typically lock the entire account immediately. So maybe they don't know your Dad has passed away, or they're incompetent, or your Mom is in fact the primary account holder, or your Mom is a joint holder.

Exactly. They just don't know...living on borrowed time. Same thing happened with MIL after FIL passed away.

If you have POA, you can probably get an authorized user card on your Mom's CC account, or even use her card. That way you can buy stuff for her with her card, and pay her CC balance from her bank account. That keeps everything much cleaner and clearer for you and your siblings.

A great idea but I doubt I can do that since she's technically only an authorized user. FWIW, my mom is 88 but I have many younger friends who had no idea that they needed to establish their own credit through being primary cardholders on their own accounts...

I'm glad for you, but be aware that can change in the future.



It was a high priority for me to maintain my relationships with my sisters through the stress of losing our father. I'm grateful that we seem to be doing well on that front so far.

Yes, I'm pretty much Switzerland in my family. It is mainly one sister that we tiptoe around.

With a proper POA, and persistence, and knowing where all the accounts are, you should be able to get put in place as agent everywhere, then transact on her behalf pretty easily.

When my Dad handed things over, about two years before he passed away, I went through then and made sure I was on file as agent everywhere. I also changed the mailing address, phone number, and email on everything from his to mine. It took a while, because there were about 25 places to deal with - he only had about five accounts but there were things like his Amazon Prime subscription and so forth. But I'm glad I did it then, because it made things so much easier after he passed away.

Thank you. This makes me breathe easier. I now have "homework" that I can follow through with. I think the other night I was just having one of those 3:00 a.m. panics of "what have I missed? what am I not doing? Which ball have I dropped and how do I find it and pick it back up?"

It's good that you recognize the need to care for yourself and your DH (sorry to hear about his diagnosis!) I knew about it and did some self care but in retrospect probably not enough. You need to take care of yourself and your family so that you can help - with your siblings - take care of your Mom.



Sure. Good luck.

Yes, thank you.

 

[steady saver]

ONE OTHER THING - if the POA is "springing" it is NOT valid until the condition is met. Molly and I are dealing with her sister. Molly has a SPRINGING poa that depends on SISTER being diagnosed by TWO MDs about her incapacitation. It is a struggle as Sister is in TX and Molly & I are in California. Sigh.

Thank you for pointing that out. No, this one is not springing but I'm glad you brought that up. I'm sorry for your struggles!!!

 

[steady saver]

I have no better advice, but will say:

POD/TOD on accounts at Vanguard were handled easily and well, like most (all?) brokerages it required the beneficiary to open a Vanguard account to get the money transferred in. Then they can keep/sell/move whatever they want.

The POD/TOD avoids probate which in IL is costly and takes a year (I'm told).

Would it make any sense to just sell her stock and move everything into a MM? It's roughly $150K.

 

[SecondCor521]

Would it make any sense to just sell her stock and move everything into a MM? It's roughly $150K.

Whether it is in stock or a MM fund will not make any difference with respect to the ease of estate administration after she passes. Vanguard or whoever can transfer stock or a MM fund just as easily.

The more salient question is does the investment make sense for your Mom's financial picture / risk tolerance / tax situation? If she's risk averse and needs that money for an expensive nursing home or medical expenses soon, then that leans towards selling. If she's comfortable with some risk or it's a relatively benign stock like a utility company or she needs it to grow for the next 10 years, then that leans towards keeping.

If she does sell, she will have to report the transaction on her taxes and possibly pay capital gains taxes. (Assuming you're referring to a taxable account here.)

 

[SecondCor521]

Sister had an appt for both dementia assessment and MRI scheduled last week but mom refused to go last minute. She has a new appt with a different doctor scheduled now for the end of July. My oldest sister with the Medical POA is on the ball and I so appreciate all she does in staying on top of things for mom.

Exactly. They just don't know...living on borrowed time. Same thing happened with MIL after FIL passed away.

A great idea but I doubt I can do that since she's technically only an authorized user. FWIW, my mom is 88 but I have many younger friends who had no idea that they needed to establish their own credit through being primary cardholders on their own accounts...

You still might be able to use her physical card and/or the numbers on it to buy stuff for her. See what your POA says. We got a lot of stuff on Amazon for my Dad near the end of his life - they kept his card on file and he gave me his Amazon credentials.

Yes, I'm pretty much Switzerland in my family. It is mainly one sister that we tiptoe around.

Thank you. This makes me breathe easier. I now have "homework" that I can follow through with. I think the other night I was just having one of those 3:00 a.m. panics of "what have I missed? what am I not doing? Which ball have I dropped and how do I find it and pick it back up?"

It's a stressful time. My sleep was messed up for weeks and months during the hard times.

It helped me to make lists on my computer, like accounts, phone numbers, logins, passwords, balances, to do lists. It was far from perfect at first, but over time I was able to fill in the blanks.

Even if you don't have everything completely perfect, you'll be able to get where you need to go, even if some of it happens after she passes away. There are really very few things that are super urgent in this process, and it sounds like your Mom has mostly taken care of those (will and POAs). The next biggest thing is probably beneficiaries on her largest accounts, and maybe understanding her income tax situation.

Yes, thank you.

Glad to hear.