I am the executor when the time comes and am 1st on the POA’s.

As things have happened, I ended up moving in with my Parents, I was in between jobs, can do my work over the ‘net and was in the process of moving. So my Dad approached me as to moving in and that he needed help. Dad is 92 and Mom is 89 and she is rated moderately to severe Alzheimer’s Dad had a Stroke in December that fortunately was classified as mild. Though he has cognitive problems that manifest themselves in short term memory problems.

I have one sibling, a younger sister.

They prepared their Wills, POA, Medical Instructions and such years ago and made periodic changes. While Mom was lucid we redid the POA’s to make sure they complied with current laws. We also took her out of the equation if Dad were to pass first. That is I would have POA and not have to go to court to establish Guardianship, which I understand can take up to 30 days and cost in our area up to $3,000.

Because of all this the POA was written to become active as soon as it was signed and while my Dad was in the Hospital I “activated” it. Since he is having some problems understanding his financial affairs he is gladly turning over the grunt work to me. What that means is that I am becoming more aware of all of the documents and instruments. We are also making some minor tweaks, like adding/changing beneficiaries now. On Stocks, Car, Insurance, Annuities and such. I have gotten to know all of their various advisers and have read all of their financial documents.

He still signs the checks but the boring stuff I am doing. I do all the shopping and driving.

They are going to live many more years and they have lived a good life. They are actually in fairly good health, other than the Alzheimer’s and we are having them age in place. They have a nice one level Condo that is inexpensive to live in. They do have Long Term Care Insurance when they need it. And it could be 6 months or 3 years or more before we look at the next move into Assisted Living.

We are currently working with an Elder Law Attorney to setup some Safe Harbor Trusts for the if and when.

I will say this, it is not for everyone. It is a lot of work and things are changing every week and even every day. I do have Caregivers coming in up to 4 days per week for 4 hours at a time, if needed.

Fortunately I had done Volunteer work over the last 15 years involving the elderly that provided training in those areas. And I have, since moving in, taken some Care giving Classes, that have been a great help.

So hopefully when the times some, it will not be a cakewalk, but I will have had some experience to lessen any horror stories of my own.

They have some decent assets, but are just middle class. My sister and I will probably get a few bucks. But I am counting on nothing. I have enough passive income to cover me in the future. Plus with Medicare not covering Assisted Living costs, it will be up to Long Term Care Insurance and their savings/assets to be paid down before being eligible for Medicaid.

So my point is that I feel that I am lucky that I am able to see the financial picture at a time that is a little more leisurely and less hectic.

As a reader I was suprised at how the writer chose to present this without any indication from the outset this piece would be in two parts. A longer piece would have been more satisfactory than a cliffhanger in this case as there was no indication of what is coming and why two parts are necessary. Wasn’t that the point? To give you a preview of what to expect?
I thought the piece would continue the next day and thought it was weird that there wasn’t an indication of when to expect the second part.

Nice to see an article that tackles this tough subject from a lay perspective. Every situation will be VERY different (not just a little different) so it’s impossible to go into much detail, but it gives us a good jumping off point for our own personal research. Thanks!

My annoyance is that some banks, like Smarty Pig, won’t let you put your account in the name of the trust. I should probably look into another targeted savings institution that will let me put the accounts into the name of the trust.

To really answer your question about probate, one must understand that a trust is not a replacement for a will. They are different instruments designed to do different things. While you can often use a trust to accomplish the purposes of a will, it is not necessarily the best vehicle for doing so. So depending on what you are trying to accomplish and what your concerns are, there may be many reasons to have a will and go through probate, rather than have a trust.

And, as you pointed out, many times people simply forget to transfer their assets into a trust. If that happens, a will and probate are probably your only choice. If a home, for example, is titled in the name of the deceased alone, it will have to be disposed of through the courts in some fashion (whether by probating a will or by intestate succession). The deceased cannot sign a deed transferring the home to anyone or anything after the deceased has died.

My will is called a pour-over will and says that any asset not already in my trust should go to my trust and be distributed according to the terms of the trust.

Not everything can be put into a trust. Like my personal possessions. I had an online checking account once that would not let me have the trust be the owner. I have a paper I-bond in my own name that is not in the trust. My electronic I-bonds are in the trust name. I have my condo and other bank accounts in trust name. I need to put a few taxable Vanguard accounts into my trust but have not gotten around to it. My Vanguard Roth IRA cannot be in a trust name for tax reasons, but I have the trust as beneficiary.

I used to have the trust as the beneficiary for my TSP (govt 401K) retirement money until my sister-in-law warned me that more money could be lost to taxes if I did it that way. My estate would have a whopping amount of tax-deferred money in it and the tax rate would be higher. So I changed the TSP beneficiaries to be various family members.

So with estate planning, you need to think about tax issues involving tax-deferred retirement accounts. Also need to keep track of all the various beneficiary forms you have filled out over the years and make sure they don’t conflict with your plans in the trust and/or will.

I also created within my revocable trust, two trusts for my minor niece and nephew, to whom I would leave some money.

However…

In practice, what happened with us was when my dearly despised m-i-l finally died, she stiffed BoA for a princely sum (which IMHO they deserved as they had no business loaning that much money to an 83-year-old on SS – clearly they expected to get it from the sale of her house, but she had a reverse mortgage). Long and short of it is that they failed to file a claim in time and the probate judge threw it out. BoA promptly sold the debt to collectors and we have been harassed ever since. Thank God for caller ID, as we now never pick up the phone unless we recognize the phone number. We know how to deal with the legitimate collectors; the problem is that when they can’t collect, they pass the debt on to other collectors, and most of them try to skirt the law. So even 4 years after her death, we’re still dealing with trouble related to her.

To give a bad comparison: this felt more like a book with the back ripped off than part one of a trilogy. There’s an introduction that references what to expect, but it doesn’t tell you that this will be a two (or more!) part article, and without that to me it implies that it’s going to cover the entire subject mentioned in the intro, not just the first few bits.

I’m interested in this story, but I have no idea when this writer will come back up in the audition process, so it falls flat. I’d prefer the story all at once, but if that’s not the case, I’d at least like to know when the next part is due to come out.

That said, I liked the tone of the story. It has good flow. I think once we see the other bits it will tie together very nicely.

Hopefully this doesn’t come off as extremely negative… it’s not meant that way.

It seems the author may be in Texas and dealing with an estate in Florida. References to the two states in question point out that the laws differ state to state.

As regards the bank as a trustee, I have found that an expensive and frustrating experience. Bankers just don’t care as much as a family member. I would use this alternative only if there was no one in the family who could handle the responsibilities or if there was such friction amongst family members as to make this impossible.

The most important thing is to be open about how an elderly parent and their finances are being managed. You’re absolutely correct, if siblings don’t like the arrangement, they should step up. But it should be an open discussion, not 1 person with all of the burden and all of the control.

I hope that before you refused to sign the waiver, you at least asked to review the will and trust. Do you have reason to believe that you or anyone else will want to contest the estate? Does the trust appear, as far as you know, to inaccurately dictate your father’s wishes? If not, then you may have just exponentially increased the duration and cost of the estate settlement for no good reason.

The attorney you spoke with did you no favor. Of course the waiver was broadly drafted–it is attempting to avoid any contest. The point it, what do you care if it was broad if you have nothing to contest? (And more importantly, is the estate worth enough that you would spend likely $100,000 in legal costs contesting the estate if you did disagree with something?)

Waivers are not bad things. There is no harm in waiving a right that you don’t intend to exercise.

Pleased and Intrigued.

As for your second question about the bank, remember that your trust is only as good as the trustee carrying out its directions. A bank trustee will cost money, but will also ensure that your trust is followed to the letter. If you designate one of your children to act as trustee, you run the risk that your kids get together and decide to just bag the trust and divvy up the money now.

I think the biggest take away for me as a 1-step-removed from the family (as a daughter-in-law) is that no matter how awkward it may be to start having the difficult discussions, if your gut is telling you that you need to, or that something is amiss, you should absolutely act on it. Waiting only complicates things.

What I want to know is – how is this going to change YOUR estate planning? I hear so. very. little. about people who put get their estates in order (and then do the rest of us a favor and explain how they did it). I’d LOVE to hear more about that. I realize it probably varies from state to state, but surely some things are similar.

Here’s another. A non-401(k) type retirement plan e.g. an IRA does NOT default to spouse. That is, you don’t need your spouse’s consent to leave the asset to somebody else. That means a spouse can exclude such an asset from his/her estate, potentially without anyone in the family knowing about it.

Since the four most common assets involved in an estate are a) real estate, b) life insurance, c) employer retirement plan, and d) private retirement plan, it really is necessary for people to understand these assets and how they are handled in estates.

I hope this is the first of MANY articles on estate-planning here at GRS.