Financial planning for mom now and after her death

[pb4uski]

I'm sorry that you are going through this. I am going through somethign similiar for a 94 yo aunt and 89 yo uncle. Aunt has always handled the family finances and is now confused and forgetful. Uncle, while a great guy, is clueless when it comes to finances but realizes that aunt is struggling. A few months ago, I offered to take over managing their investments (all CDs) and finances.

We executed a very broad durable POA for each of them.

We have centralized investments at Schwab and they also have a checking account at PNC since there is a PNC branch just down the street from their house. They still have a CD with another bank that we will transfer the maturity proceeds to Schwab when it matures.

They have no children, but 7 nieces and nephews who are their heirs. I have set up the seven of us as beneficiaries of their joint brokerage account and contingent beneficiaries of their IRAs. Since we wanted me to have access to money to pay bills if they die simultaneously, I am a co-owner of their PNC checking account rather than a POA. We don't keep a lot of money in checking but it is linked to their Schwab accounts.

We still need to deal with the house which they own as joint tenants. That becomes complicated with 7 beneficiaries. If we had less beneficiaries we could just do a Lady Bird deed, which is like a TOD. We may set up a trust, with me as trustee, for the house with the 7 of us as beneficiaries of the trust. That way, when the second of them dies I can take control, sell the house and then distribute the sales proceeds to the 7 beneficiaries. OTOH, if the sell the house before the second of them dies then the cost of setting up the trust and mutting the house in the trust is wasted money. If one of them dies, then it is likely that the house would be sold and the surviving spouse would go into assisted living.

 

[pb4uski]

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

Would there be a big taxable gain and tax due if the stock was sold? How did she acquire the stock? What does Vanguard show as the cost basis? Did she inherit the stock from your DF and if so, was the basis stepped-up?

Vanguard should be able to help you and your Mom transfer the assets held at Fast Eddie to Vanguard. It is best to consolidate things while you can to the fullest extent possible.

 

[RetMD21]

Fast Eddie accepted the POA for my mother's account with no problem. I later did an in kind transfer to Vanguard and fielded the unhappy call from the E Jones broker.

I'm not sure if other have mentioned but many institutions prefer their forms to a lawyer created POA. If you catch your mother in a good mood it could be worthwhile to have her sign those. OTOH my cousin did fine simply doing transactions with his father's logins. I think he was able to get by with e-checks and online cc/debt for payments.

 

[harllee]

My 95 year old mom has Alzheimers and is totally incompetent at this point. I have been her POA for 5 years now. She had assets scattered all over and I have been consolidating them and it has made things much easier. I don't think this has been mentioned the IRS has their own POA form that I had to get my mother to sign and I filed it with the IRS so I could file her tax returns which were a mess when I took over. Also SS does not accept POAs you have to get an appointment with them and become Representative Payee, a pain.

OP you say you and your sister are joint POAs--does the POA document require both go you to sign everything or does it allow only one? I think being joint POA would make things much more complicated.

 

[steady saver]

Harllee, thank you for the heads up on the IRS and wanting their own POA form and SS needing you to become a representative payee. I had no idea.
Our joint POA is written so that we are not both required to sign, which was by design since we are in different states.

 

[steady saver]

Would there be a big taxable gain and tax due if the stock was sold? How did she acquire the stock? What does Vanguard show as the cost basis? Did she inherit the stock from your DF and if so, was the basis stepped-up?

Vanguard should be able to help you and your Mom transfer the assets held at Fast Eddie to Vanguard. It is best to consolidate things while you can to the fullest extent possible.

This is just stock acquired over time by my dad but they had separate accounts so yes, she got my dad's stocks as well as her own. They are consolidated to her account now. Only about 4 stocks. I'll look at the cost basis and look all of that over. My gut reaction is just to keep it as is. They are not risky stocks as I recall. Thank you for pointing out these questions.

 

[cute fuzzy bunny]

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.

Yeah I recently learned the durable Powers of attorney expire when the person you have the power of attorney for passes away. After that you can get fun stuff like a year of probate to sort things out before you can do anything I'm in that position right now with my dad he died 3 years ago and he's on the deed to the house I'm living in right now and I got a lawyer and a couple of $1,000 to figure out where we go from here through the probate Court. I will give two thumbs up to quicken will maker it really does produce some pretty good documents at a very low cost and you don't need the latest version of it. The only difference between the one that exists right now and the one from probably 10 or 12 years ago is digital assets like streaming movies and whatnot. The newer versions let you part those out from other assets. The hard part with creating all these documents like wills and power of attorney and medical directives is figure out the answers to a lot of questions and doing that before you see a lawyer if you do want to involve one takes away a lot of the time and money involved in creating those documents I've recommended it to a bunch of people looking to do something but it's overwhelming for them that way they can sit with it and fiddle around with it for a couple of weeks and sort out what kinds of things they do need to know before they start producing documents.