Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
User avatar
celia
Posts: 16764
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by celia »

celia wrote: Mon Jan 17, 2022 4:26 am OP, If you haven't done estate planning yet, why not get a Power of Attorney for yourself? I have one and so do many Bogleheads. . .
bismarck23 wrote: Tue Jan 18, 2022 2:25 am But, it would still be way better to have had an attorney put together a complete plan on this. My efforts to get my dad to do that were unsuccessful. . .
Bismarck, Did you notice my suggestion for YOU to get POAs too? This is because you can use your own situation to determine if YOU need a POA or not, instead of focusing on your dad. Tell him you've been reading about it and know several people younger than you [on this forum] that have incorporated them into their plans to make things easier for their loved ones. They put their wishes in writing, just in case something happens to them sometime in the future. The discussion with him would really be about you and why you are considering them for yourself. You can ask for his opinion for who he thinks would make good financial and health care choices for YOU. What qualities should your agent have [honesty, trustworthy, financial experience]? Does that person need to live near you? [No.] When it comes to health decisions, would that person be able to stand up for your choices even if they were different from what they would want for themself? [Yes.] Does he know anyone who has created POAs? [use this as a source so you can later find out who their attorney was] Does he know anyone who ended up wishing they didn't have the POAs? Make it sound like it sounds right for you and you will get them soon after you get home. Then DO IT!

Here's another idea.
Have you ever heard of Five Wishes? It is a Power of Attorney form for medical decisions that is valid in most states that you can fill out at home. It only kicks in if the patient is unable to speak for themself. Some of the form is check boxes and some is writing in a sentence or two that states your final wishes, based on the prompts/questions. This would be perfect for both of you to fill out together and discuss it as you go along. Get extra copies of the forms so you can both re-do yours if it gets too messy. I think you need a witness when you sign it. But try to both sign it at about the same time, then immediately go get some copies of each and give the original to the designated decision maker and make sure your dad has a copy of both of yours.

Once that is complete, the financial DPOA should be easier to do.

Be sure you thank your dad profusely for helping YOU!
BarbBrooklyn
Posts: 1715
Joined: Fri Aug 24, 2018 9:33 am
Location: NYC

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by BarbBrooklyn »

So, uncle is in his 70s, i.e., older than dad?
Does he understand what a POA is? It sounds like he is equating it with Hospice, to be frank.

I agree with Celia's idea of talking to dad about YOUR need for a POA. It might clarify for him what it actually is, as opposed to what his older brother has told him.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
SuzBanyan
Posts: 2008
Joined: Thu Jun 02, 2016 11:20 am

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by SuzBanyan »

Sorry to hear that your Dad’s health seems to be declining.

You mentioned in your update that your uncles were putting more cash in your Dad’s checking account but are no longer pursuing adding one of the uncles as a co-owner. Is there someone besides your Dad who already can sign on that account and pay his bills? Or are the uncles just planning to use their access to the passwords to enable them to pay bills electronically? They obviously would not be the first to manage a loved one’s affairs through such a method.
Shallowpockets
Posts: 2533
Joined: Fri Nov 20, 2015 9:26 am

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by Shallowpockets »

The uncle is the problem. As recalcitrant as he is, can you just let all this go and play out?
I can see the problem you state with POA, but is it a problem for you, really?
Maybe you can just let it all ride.
You have given the uncle your thoughts and maybe some facts. He can then assume any burden associated with not acting in a way that makes it easier (for who?) to engage with any financials of your father.
If you are secure in your own financial life, step back and save yourself this heartache and tend to your father as best you can. Leave the uncle to sort it all out in his way, whatever that may have to be.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bismarck23 »

celia wrote: Tue Jan 18, 2022 3:30 am
celia wrote: Mon Jan 17, 2022 4:26 am OP, If you haven't done estate planning yet, why not get a Power of Attorney for yourself? I have one and so do many Bogleheads. . .
bismarck23 wrote: Tue Jan 18, 2022 2:25 am But, it would still be way better to have had an attorney put together a complete plan on this. My efforts to get my dad to do that were unsuccessful. . .
Bismarck, Did you notice my suggestion for YOU to get POAs too? This is because you can use your own situation to determine if YOU need a POA or not, instead of focusing on your dad. Tell him you've been reading about it and know several people younger than you [on this forum] that have incorporated them into their plans to make things easier for their loved ones. They put their wishes in writing, just in case something happens to them sometime in the future. The discussion with him would really be about you and why you are considering them for yourself. You can ask for his opinion for who he thinks would make good financial and health care choices for YOU. What qualities should your agent have [honesty, trustworthy, financial experience]? Does that person need to live near you? [No.] When it comes to health decisions, would that person be able to stand up for your choices even if they were different from what they would want for themself? [Yes.] Does he know anyone who has created POAs? [use this as a source so you can later find out who their attorney was] Does he know anyone who ended up wishing they didn't have the POAs? Make it sound like it sounds right for you and you will get them soon after you get home. Then DO IT!

Here's another idea.
Have you ever heard of Five Wishes? It is a Power of Attorney form for medical decisions that is valid in most states that you can fill out at home. It only kicks in if the patient is unable to speak for themself. Some of the form is check boxes and some is writing in a sentence or two that states your final wishes, based on the prompts/questions. This would be perfect for both of you to fill out together and discuss it as you go along. Get extra copies of the forms so you can both re-do yours if it gets too messy. I think you need a witness when you sign it. But try to both sign it at about the same time, then immediately go get some copies of each and give the original to the designated decision maker and make sure your dad has a copy of both of yours.

Once that is complete, the financial DPOA should be easier to do.

Be sure you thank your dad profusely for helping YOU!
Yes, thanks and sorry, I missed that. My wife and I have a complete estate plan set up by a local estate planning attorney, including DPOAs, living trust, and a pour-over will. I have all the documents in a folder somewhere, and frankly, wish I understood all the legal mechanics better, but we did put a lot of thought into the important parts, such as the list of people who would manage our financial affairs, make medical decisions for us, and take custody of our children. We set it up around the time our first child was born. Part of my struggle is that, when we had our first child, the idea of not doing this planning, and risk having some adverse situation for my surviving spouse, kids, and/or loved ones trying to help us, just for the sake of avoiding thinking about my own mortality, is unthinkable. Granted, I think it's much easier emotionally to do this planning when you're young and healthy, rather than waiting until you're sick, but even then I don't think I would hesitate to grant my caretakers POA or take care of any last minute planning. The resistance to that here from other parties still baffles me.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bismarck23 »

SuzBanyan wrote: Tue Jan 18, 2022 7:51 am Sorry to hear that your Dad’s health seems to be declining.

You mentioned in your update that your uncles were putting more cash in your Dad’s checking account but are no longer pursuing adding one of the uncles as a co-owner. Is there someone besides your Dad who already can sign on that account and pay his bills? Or are the uncles just planning to use their access to the passwords to enable them to pay bills electronically? They obviously would not be the first to manage a loved one’s affairs through such a method.
Both of my uncles should have the passwords to most/all of my dad's accounts, although evidently not his checking account, to which none of us have any access (legal or otherwise) or signing authority. That was the issue that raised red flags with me as being a big enough problem where a POA was needed. As I have access to his brokerage account (with a properly signed/notarized POA form with that institution), I pushed $5,000 from that account into his checking (it was already set up as a linked external account) to cover any possible auto-drafts that may be hitting.
bsteiner
Posts: 9151
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bsteiner »

bismarck23 wrote: Tue Jan 18, 2022 2:25 am ...
Dad has the majority of assets in brokerage and IRA accounts, which I manage, and which have listed beneficiaries (myself and my sibling) and should pass to us without going through probate. He also has a will, which is relatively recent. I'm certain no more advanced planning, like trusts, has been done to try to avoid probate on any other assets. I'm not sure on NY law but his house would be my biggest concern about probate. ...
Unlike California, probating a Will in New York is generally not difficult, expensive or burdensome, so few people try to avoid it. We try to avoid it in New York where someone doesn't know who his/her nearest relative are who would inherit absent a Will, or where they are.

Naming individuals as beneficiaries takes away the opportunity to leave his estate (or at least those assets) to his children in separate trusts (under his Will) rather than outright, to keep the children's inheritances out of their estates for estate tax purposes, and to protect their inheritances from their creditors, current and future spouses, and Medicaid. So we try not to have beneficiaries except for life insurance and retirement benefits.
User avatar
cchrissyy
Posts: 2339
Joined: Fri May 05, 2017 10:35 pm
Location: SF bay area

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by cchrissyy »

after reading the update - everybody go look at post 1 again - my advice is drop this. i'm sorry about your dad but if his remaining time is this short, i think the uncles view is probably right, and if dad wanted it another way, he had time all these years with cancer to set it up more properly, or officially, or whatever. but he chose to do it this way, with these brothers, and it sounds like they are managing the situation as well as anybody could. i would try not to worry about unpaid bills or the IRS. the brothers will do what they can do, and if something falls through the cracks for a couple months, no real harm comes from that either. again i'm saying this with the unfortunate foundation that your dad won't live that long. i'm sorry! (edit to add - also in your original post, if he's so cognitively impaired right now that he can't text or follow a conversation, he isn't fit to sign legal docs anyway)

the one official thing that still matters would be medical decision-making but i would wager he gave this to the brother who was with him for the cancer treatments? even if he didn't have a lawyer for it, the hospital surely has patients fill something out before a surgery or radiation? i guess if i was you i might ask about that, or, i would assume it's not my problem since his brother has clearly been at these appointments and the doctors just must have, at some point, given your dad something to sign designating him, and likewise the hospice team will surely work with the brother who is there and ask your dad themselves if he authorizes the brother to communicate with them. so i think you can let this go, knowing your dad will continue to get good care.
60-20-20 us-intl-bond
BarbBrooklyn
Posts: 1715
Joined: Fri Aug 24, 2018 9:33 am
Location: NYC

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by BarbBrooklyn »

I so agree with Chrissy. And I'm so sorry dad's health has taken a turn for the worse.

If Dad wanted it differently, he would have set it up. I certainly hope the hospital has had one of your uncle's set up Medical POA.

Hospice and a Do Not Recussitate order is of importance. Without that, the docs are, as I understand, obligated to try to "save" him, no matter what his overall physical condition.

The other wrinkle I can see here is if dad needs Nursing Home care for many months as he declines. I guess uncles will need to figure out how to pay for that.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bismarck23 »

cchrissyy wrote: Tue Jan 18, 2022 11:15 am after reading the update - everybody go look at post 1 again - my advice is drop this. i'm sorry about your dad but if his remaining time is this short, i think the uncles view is probably right, and if dad wanted it another way, he had time all these years with cancer to set it up more properly, or officially, or whatever. but he chose to do it this way, with these brothers, and it sounds like they are managing the situation as well as anybody could. i would try not to worry about unpaid bills or the IRS. the brothers will do what they can do, and if something falls through the cracks for a couple months, no real harm comes from that either. again i'm saying this with the unfortunate foundation that your dad won't live that long. i'm sorry! (edit to add - also in your original post, if he's so cognitively impaired right now that he can't text or follow a conversation, he isn't fit to sign legal docs anyway)

the one official thing that still matters would be medical decision-making but i would wager he gave this to the brother who was with him for the cancer treatments? even if he didn't have a lawyer for it, the hospital surely has patients fill something out before a surgery or radiation? i guess if i was you i might ask about that, or, i would assume it's not my problem since his brother has clearly been at these appointments and the doctors just must have, at some point, given your dad something to sign designating him, and likewise the hospice team will surely work with the brother who is there and ask your dad themselves if he authorizes the brother to communicate with them. so i think you can let this go, knowing your dad will continue to get good care.
I think I agree with you. I had a second call with the other uncle yesterday where he walked things back a bit. He's going to visit in a couple days and will feel things out. If it makes sense (in his judgment) to bring up a POA with dad or the other uncle, he will. So this is where I'll leave it. As I said in another post, maybe it's just because I have young kids, but to me, the idea of not doing estate planning and potentially leaving my wife and kids in the lurch, just for the sake of avoiding thinking about unpleasant scenarios, is impossible for me to understand. But there are lots of other things people do in this world that are equally impossible for me to understand.

I think care-taking uncle is set up as a medical POA.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bismarck23 »

bsteiner wrote: Tue Jan 18, 2022 11:05 am
bismarck23 wrote: Tue Jan 18, 2022 2:25 am ...
Dad has the majority of assets in brokerage and IRA accounts, which I manage, and which have listed beneficiaries (myself and my sibling) and should pass to us without going through probate. He also has a will, which is relatively recent. I'm certain no more advanced planning, like trusts, has been done to try to avoid probate on any other assets. I'm not sure on NY law but his house would be my biggest concern about probate. ...
Unlike California, probating a Will in New York is generally not difficult, expensive or burdensome, so few people try to avoid it. We try to avoid it in New York where someone doesn't know who his/her nearest relative are who would inherit absent a Will, or where they are.

Naming individuals as beneficiaries takes away the opportunity to leave his estate (or at least those assets) to his children in separate trusts (under his Will) rather than outright, to keep the children's inheritances out of their estates for estate tax purposes, and to protect their inheritances from their creditors, current and future spouses, and Medicaid. So we try not to have beneficiaries except for life insurance and retirement benefits.
Thanks very much. When you say "retirement benefits" does that include IRAs? If so, in this case the only asset that maybe should have been put into a trust is a brokerage account, which is in the mid 6-figure range. My wife and I have a NW of ~$3.5M in our late 30's and are saving $150-200k/year, so there's a decent chance we'll face estate tax issues down the road. This is just for my curiosity; unfortunately it looks like the door has long since closed for any sort of trusts to be set up.
bsteiner
Posts: 9151
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bsteiner »

bismarck23 wrote: Tue Jan 18, 2022 12:28 pm
bsteiner wrote: Tue Jan 18, 2022 11:05 am
bismarck23 wrote: Tue Jan 18, 2022 2:25 am ...
Dad has the majority of assets in brokerage and IRA accounts, which I manage, and which have listed beneficiaries (myself and my sibling) and should pass to us without going through probate. He also has a will, which is relatively recent. I'm certain no more advanced planning, like trusts, has been done to try to avoid probate on any other assets. I'm not sure on NY law but his house would be my biggest concern about probate. ...
Unlike California, probating a Will in New York is generally not difficult, expensive or burdensome, so few people try to avoid it. We try to avoid it in New York where someone doesn't know who his/her nearest relative are who would inherit absent a Will, or where they are.

Naming individuals as beneficiaries takes away the opportunity to leave his estate (or at least those assets) to his children in separate trusts (under his Will) rather than outright, to keep the children's inheritances out of their estates for estate tax purposes, and to protect their inheritances from their creditors, current and future spouses, and Medicaid. So we try not to have beneficiaries except for life insurance and retirement benefits.
Thanks very much. When you say "retirement benefits" does that include IRAs? If so, in this case the only asset that maybe should have been put into a trust is a brokerage account, which is in the mid 6-figure range. My wife and I have a NW of ~$3.5M in our late 30's and are saving $150-200k/year, so there's a decent chance we'll face estate tax issues down the road. This is just for my curiosity; unfortunately it looks like the door has long since closed for any sort of trusts to be set up.
I wasn't suggesting that he "put" anything into a trust.

I suggested that he provide in his Will for each child to inherit his/her share in trust rather than outright. He could then name the children's trusts under his Will rather than the children as the beneficiaries of his IRAs.

If you're comfortable that you'll never need some or all of your expected inheritance, when the time comes, you can disclaim (waive) it, assuming that the disclaimed portion would then go in a way that you find acceptable (for example, to or in trust for your children).
twh
Posts: 1754
Joined: Sat Feb 08, 2020 2:15 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by twh »

bismarck23 wrote: Tue Jan 18, 2022 12:15 pm
cchrissyy wrote: Tue Jan 18, 2022 11:15 am after reading the update - everybody go look at post 1 again - my advice is drop this. i'm sorry about your dad but if his remaining time is this short, i think the uncles view is probably right, and if dad wanted it another way, he had time all these years with cancer to set it up more properly, or officially, or whatever. but he chose to do it this way, with these brothers, and it sounds like they are managing the situation as well as anybody could. i would try not to worry about unpaid bills or the IRS. the brothers will do what they can do, and if something falls through the cracks for a couple months, no real harm comes from that either. again i'm saying this with the unfortunate foundation that your dad won't live that long. i'm sorry! (edit to add - also in your original post, if he's so cognitively impaired right now that he can't text or follow a conversation, he isn't fit to sign legal docs anyway)

the one official thing that still matters would be medical decision-making but i would wager he gave this to the brother who was with him for the cancer treatments? even if he didn't have a lawyer for it, the hospital surely has patients fill something out before a surgery or radiation? i guess if i was you i might ask about that, or, i would assume it's not my problem since his brother has clearly been at these appointments and the doctors just must have, at some point, given your dad something to sign designating him, and likewise the hospice team will surely work with the brother who is there and ask your dad themselves if he authorizes the brother to communicate with them. so i think you can let this go, knowing your dad will continue to get good care.
I think I agree with you. I had a second call with the other uncle yesterday where he walked things back a bit. He's going to visit in a couple days and will feel things out. If it makes sense (in his judgment) to bring up a POA with dad or the other uncle, he will. So this is where I'll leave it. As I said in another post, maybe it's just because I have young kids, but to me, the idea of not doing estate planning and potentially leaving my wife and kids in the lurch, just for the sake of avoiding thinking about unpleasant scenarios, is impossible for me to understand. But there are lots of other things people do in this world that are equally impossible for me to understand.

I think care-taking uncle is set up as a medical POA.
I am really sorry for your dad. I'm also really sorry for the mess you are dealing with. I've been close enough to these things to know how hard your job is.

First, don't lose sight of the fact that the bulk of the money is in the brokerage account, for which you have a POA.

Some thoughts...

From the sound of it, your father isn't competent enough to sign anything legal. But, perhaps he has better days than others. I would have something already prepared and ready to sign and pre-position that document where your father is such that he could sign if competent at a moments notice.

The suggestion of getting checks for the E-Trade account is good. Then you can manage it there and move away from all the satellite checking accounts.

In the meantime, make sure there is not the ability of any accounts to transfer money out of the E-Trade brokerage account.

For the checking account that no one but your father is the owner - I would just try and make an online account and see if you can get that done. That will allow you to effectively manage it even if you don't have the POA. At least that will let you keep track of auto-debits and making sure things are running smooth. If you are successful, perhaps you can move any auto-debits from this account to the E-Trade account.

For the uncle controlled accounts. If they come saying they need more money, if you are able to have the E-Trade account work, move that liability from your uncle to the E-Trade account. If they can't or won't do that, I would require them to provide a couple months previous bank statements. Just explain you are acting as a fiduciary on the E-Trade account and it is incumbent on you to have records of when and why you moved money.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bismarck23 »

bsteiner wrote: Tue Jan 18, 2022 12:44 pm
bismarck23 wrote: Tue Jan 18, 2022 12:28 pm Thanks very much. When you say "retirement benefits" does that include IRAs? If so, in this case the only asset that maybe should have been put into a trust is a brokerage account, which is in the mid 6-figure range. My wife and I have a NW of ~$3.5M in our late 30's and are saving $150-200k/year, so there's a decent chance we'll face estate tax issues down the road. This is just for my curiosity; unfortunately it looks like the door has long since closed for any sort of trusts to be set up.
I wasn't suggesting that he "put" anything into a trust.

I suggested that he provide in his Will for each child to inherit his/her share in trust rather than outright. He could then name the children's trusts under his Will rather than the children as the beneficiaries of his IRAs.

If you're comfortable that you'll never need some or all of your expected inheritance, when the time comes, you can disclaim (waive) it, assuming that the disclaimed portion would then go in a way that you find acceptable (for example, to or in trust for your children).
Sorry for my mis-phrasing. We are obviously bumping into the limits of my understanding here.

In general, while my own family's financial situation is good from a net worth perspective, most of our assets are illiquid in some way, and our situation from an income-expenses perspective is less rosy, though still not terrible. I've asked about it in detail in other posts, but I don't want to sidetrack this discussion with a tributary here. Suffice to say, a mid-high 6-figure inheritance, in the form of my half of the brokerage and two IRAs, will make a meaningful difference in my family's financial life, mostly enabling us to pay down our mortgage a bit and beef up our kids' 529's. I probably wouldn't want to disclaim an inheritance entirely, although I'd be open to considering some kind of split where we (say) direct $50-100k into a trust for each of our kids.

I am listed as a 50% beneficiary on those accounts. I haven't seen my dad's will, but I assume it's either silent on these assets, or lists my sibling and I as 50% heirs. On my end, I know my wife and I have a living trust (it's an A-B trust) with provisions to set up trusts for our kids if something were to happen to one or both of us. Is there anything I could/should do on my end to prepare for this? I can reach out to my own estate attorney, but I'd like a better idea of what the rough plan/goal should be first. Thanks very much for your time and expertise!

-----

One more general comment for everyone who has graciously weighed in here. This is a finance forum and I've tried to limit the discussion to mostly the financial side of this awful situation. But please understand that I love my dad very much and the emotional side is very real. I try to be objective and rational dealing with things as much as possible (it's a strategy I've found useful in other situations), and I think it's helping me cope with things and feel like I have some control. But I have needed to hide tears from my young kids on several occasions as this has devolved. I live in another state, and travel is very hard for me right now. I want to go visit my dad soon, but he may not be there by the time I can, at least in any way like I remember him. I wish I knew how I could show more thanks for him for everything he's done for me and my brother. I am trying to make the best decisions I can here, and if I seem cold and calculating, please understand that's not the complete picture.
bsteiner
Posts: 9151
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bsteiner »

bismarck23 wrote: Tue Jan 18, 2022 1:41 pm
bsteiner wrote: Tue Jan 18, 2022 12:44 pm
bismarck23 wrote: Tue Jan 18, 2022 12:28 pm Thanks very much. When you say "retirement benefits" does that include IRAs? If so, in this case the only asset that maybe should have been put into a trust is a brokerage account, which is in the mid 6-figure range. My wife and I have a NW of ~$3.5M in our late 30's and are saving $150-200k/year, so there's a decent chance we'll face estate tax issues down the road. This is just for my curiosity; unfortunately it looks like the door has long since closed for any sort of trusts to be set up.
I wasn't suggesting that he "put" anything into a trust.

I suggested that he provide in his Will for each child to inherit his/her share in trust rather than outright. He could then name the children's trusts under his Will rather than the children as the beneficiaries of his IRAs.

If you're comfortable that you'll never need some or all of your expected inheritance, when the time comes, you can disclaim (waive) it, assuming that the disclaimed portion would then go in a way that you find acceptable (for example, to or in trust for your children).
...
In general, while my own family's financial situation is good from a net worth perspective, most of our assets are illiquid in some way, and our situation from an income-expenses perspective is less rosy, though still not terrible. .... Suffice to say, a mid-high 6-figure inheritance, in the form of my half of the brokerage and two IRAs, will make a meaningful difference in my family's financial life, mostly enabling us to pay down our mortgage a bit and beef up our kids' 529's. I probably wouldn't want to disclaim an inheritance entirely, although I'd be open to considering some kind of split where we (say) direct $50-100k into a trust for each of our kids.

I am listed as a 50% beneficiary on those accounts. I haven't seen my dad's will, but I assume it's either silent on these assets, or lists my sibling and I as 50% heirs. On my end, I know my wife and I have a living trust (it's an A-B trust) with provisions to set up trusts for our kids if something were to happen to one or both of us. Is there anything I could/should do on my end to prepare for this? I can reach out to my own estate attorney, but I'd like a better idea of what the rough plan/goal should be first. Thanks very much for your time and expertise!
...
Ideally he would have a Will (in California it would be a revocable trust, but the difference is a matter of style rather than substance) that leaves your share to you in a trust that you control (and your sibling's share in a trust that he/she controls).

If he doesn't do that, when the time comes, you can disclaim (waive) some, all or none of your inheritance, in which case the disclaimed portion (if any) will go as if you predeceased your father, unless his Will or beneficiary designations set forth some other disposition if you should disclaim.
clip651
Posts: 1582
Joined: Thu Oct 02, 2014 11:02 am

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by clip651 »

bismarck23 wrote: Tue Jan 18, 2022 1:41 pm
One more general comment for everyone who has graciously weighed in here. This is a finance forum and I've tried to limit the discussion to mostly the financial side of this awful situation. But please understand that I love my dad very much and the emotional side is very real. I try to be objective and rational dealing with things as much as possible (it's a strategy I've found useful in other situations), and I think it's helping me cope with things and feel like I have some control. But I have needed to hide tears from my young kids on several occasions as this has devolved. I live in another state, and travel is very hard for me right now. I want to go visit my dad soon, but he may not be there by the time I can, at least in any way like I remember him. I wish I knew how I could show more thanks for him for everything he's done for me and my brother. I am trying to make the best decisions I can here, and if I seem cold and calculating, please understand that's not the complete picture.
I'm so sorry for all you and your Dad are going through. I know how hard it is to have a parent seeming to be slipping away.

Until you are able to travel, do the simple things to say thanks and tell him how much he means to you. Phone calls, facetime, snail mail letters, etc. If there are simple gifts he might enjoy (a framed photo, a sweater, a blanket, whatever he might find comfort in, or that might make him smile), send those. Even if he isn't able to respond fully, some important parts of your messages to him will probably get through to him, and he will be reminded how much you care. Hopefully your uncle will help you make a connection with your Dad at times of day he is more alert, etc.

Meanwhile, work on making travel possible, if possible. There are some problems money can't fix, and others that money can help with. Do some thinking about whether any of the barriers to travel are things that money can fix. Maybe you can hire temporary help, or fly in another friend or family member to help you the duties you will need to temporarily leave behind while you travel, or whatever else might help.

best wishes,
cj
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bismarck23 »

clip651 wrote: Tue Jan 18, 2022 7:39 pm
bismarck23 wrote: Tue Jan 18, 2022 1:41 pm
One more general comment for everyone who has graciously weighed in here. This is a finance forum and I've tried to limit the discussion to mostly the financial side of this awful situation. But please understand that I love my dad very much and the emotional side is very real. I try to be objective and rational dealing with things as much as possible (it's a strategy I've found useful in other situations), and I think it's helping me cope with things and feel like I have some control. But I have needed to hide tears from my young kids on several occasions as this has devolved. I live in another state, and travel is very hard for me right now. I want to go visit my dad soon, but he may not be there by the time I can, at least in any way like I remember him. I wish I knew how I could show more thanks for him for everything he's done for me and my brother. I am trying to make the best decisions I can here, and if I seem cold and calculating, please understand that's not the complete picture.
I'm so sorry for all you and your Dad are going through. I know how hard it is to have a parent seeming to be slipping away.

Until you are able to travel, do the simple things to say thanks and tell him how much he means to you. Phone calls, facetime, snail mail letters, etc. If there are simple gifts he might enjoy (a framed photo, a sweater, a blanket, whatever he might find comfort in, or that might make him smile), send those. Even if he isn't able to respond fully, some important parts of your messages to him will probably get through to him, and he will be reminded how much you care. Hopefully your uncle will help you make a connection with your Dad at times of day he is more alert, etc.

Meanwhile, work on making travel possible, if possible. There are some problems money can't fix, and others that money can help with. Do some thinking about whether any of the barriers to travel are things that money can fix. Maybe you can hire temporary help, or fly in another friend or family member to help you the duties you will need to temporarily leave behind while you travel, or whatever else might help.

best wishes,
cj
Thank you for the sympathy and well-wishes, they really do mean a lot. All your suggestions are great. I may post some more detail later, but for now let’s say I’m exploring all these options. I’m trying to line up a trip for me by week’s end.
water2357
Posts: 654
Joined: Sat Sep 12, 2020 9:24 am

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by water2357 »

Yes, concentrate on getting to see your father. But if possible, you should consult a lawyer about your father's situation for you and your family's sake.

Hopefully your father will rally. He will then most likely still need help in managing his finances. And what your uncle(s) are doing is not entirely legal. No one can take money out of someone else's account without the legal right to do so. And it sounds like no one currently has the legal right to sign checks for your father or withdraw money from his checking account. This is not a good situation for any length of time. At some point your uncle is going to be questioned on how he is accessing your father's account. If there are others who are named in your father's will in addition to you and your uncle, your uncle may face legal issues about how he handled your father's account(s), even more so if your uncle has a conflict of interest, which it sounds like he does.

And remember, if/when your father is gone since you are not the executor you will no longer have any right to handle any of your father's finances. At that point, the executor controls all the accounts that do not have named beneficiaries and the executor is responsible for paying all bills and distributing all monies, etc. Your POA on the brokerage account ends when your father is gone.

So, if nothing else, you should consult a lawyer to understand what legal issues there will be for you and for your uncle and for others in the will, if your uncle does not handle your father's finances based on current law.

One other item, should your father need additional help and you cannot be physically with him, look into hiring a geriatric care manager in his area to help oversee his care. Geriatric care managers are certified to handle many aspects of care including providing input on facilities, managing care, help in discussing difficult topics, etc.

https://www.nia.nih.gov/health/what-ger ... re-manager

Hope all goes well.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bismarck23 »

water2357 wrote: Wed Jan 19, 2022 3:57 am Yes, concentrate on getting to see your father. But if possible, you should consult a lawyer about your father's situation for you and your family's sake.

Hopefully your father will rally. He will then most likely still need help in managing his finances. And what your uncle(s) are doing is not entirely legal. No one can take money out of someone else's account without the legal right to do so. And it sounds like no one currently has the legal right to sign checks for your father or withdraw money from his checking account. This is not a good situation for any length of time. At some point your uncle is going to be questioned on how he is accessing your father's account. If there are others who are named in your father's will in addition to you and your uncle, your uncle may face legal issues about how he handled your father's account(s), even more so if your uncle has a conflict of interest, which it sounds like he does.

And remember, if/when your father is gone since you are not the executor you will no longer have any right to handle any of your father's finances. At that point, the executor controls all the accounts that do not have named beneficiaries and the executor is responsible for paying all bills and distributing all monies, etc. Your POA on the brokerage account ends when your father is gone.

So, if nothing else, you should consult a lawyer to understand what legal issues there will be for you and for your uncle and for others in the will, if your uncle does not handle your father's finances based on current law.

One other item, should your father need additional help and you cannot be physically with him, look into hiring a geriatric care manager in his area to help oversee his care. Geriatric care managers are certified to handle many aspects of care including providing input on facilities, managing care, help in discussing difficult topics, etc.

https://www.nia.nih.gov/health/what-ger ... re-manager

Hope all goes well.
Thanks very much.

I'm very much aligned with your views on the POA. My reasons wanting it were as much based on principle as practical concerns. However, under these circumstances I'm not expecting any real problems. Our family tends to cooperate very well together. This disagreement over the POA is (in the scheme of things) pretty minor and is the biggest family "conflict" I can remember. I can't think of anyone who would sue one of my uncles over anything. We all have enough money that it wouldn't be necessary, and none of us have the character where we would want to do that. The goal has always been to keep my dad's affairs running smoothly and not bother him, which we all agree on, even if we may disagree on the best way to accomplish it.

Also, I spoke with my care-taking uncle today, and sadly my dad has continued to deteriorate. Today he chose to be placed on a DNR and home hospice care is starting. It's shocking how fast the illness progressed. Life expectancy is somewhere between a few days and a few weeks. So, I think they are right that there's little value in a POA. Hospice may recommend one, and compared to a DNR (or a will for that matter) I think the emotional impact would pale in comparison, but I am not going to push for it. I will be flying to go visit tomorrow and will use the time until then to set things up as best I can at home.

Thanks for the reminder that the POA ends at the time of my father's passing. My brother and I are listed as beneficiaries on all the accounts I manage, so I imagine after not too long a time, the accounts will be split and my brother and I will be each given our own to control. He has some appreciated individual stocks in the brokerage, and I'll want to go in and sell those and capture the step-up in basis. I'll recommend my brother does the same. I will also want to take a distribution from my inherited Traditional IRA by the end of the year, though based on what I know about my brother's tax situation I may suggest he waits on his. What is the best use of this money in my financial life, I can't say. I'll probably create another thread about it, once the dust settles. This is my plan for now; if anything here doesn't sound right, please let me know.

Your suggestion to consult a lawyer is a good one. I'll keep it in mind.
twh
Posts: 1754
Joined: Sat Feb 08, 2020 2:15 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by twh »

bismarck23 wrote: Wed Jan 19, 2022 7:19 pm and I'll want to go in and sell those and capture the step-up in basis
In case you are not aware, the stepped up basis happens without having to sell anything. Basically, is is all worth market value on that day. You can choose to just relabel the basis of the asset and keep the asset or sell part of all of it for no-gain/loss (assuming the price doesn't change). In cases I have dealt with, the brokerage just asks you to tell it what to do with the basis in the case of each security.
clip651
Posts: 1582
Joined: Thu Oct 02, 2014 11:02 am

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by clip651 »

bismarck23 wrote: Wed Jan 19, 2022 7:19 pm

Also, I spoke with my care-taking uncle today, and sadly my dad has continued to deteriorate. Today he chose to be placed on a DNR and home hospice care is starting. It's shocking how fast the illness progressed. Life expectancy is somewhere between a few days and a few weeks. So, I think they are right that there's little value in a POA. Hospice may recommend one, and compared to a DNR (or a will for that matter) I think the emotional impact would pale in comparison, but I am not going to push for it. I will be flying to go visit tomorrow and will use the time until then to set things up as best I can at home.

Thanks for the reminder that the POA ends at the time of my father's passing. My brother and I are listed as beneficiaries on all the accounts I manage, so I imagine after not too long a time, the accounts will be split and my brother and I will be each given our own to control. He has some appreciated individual stocks in the brokerage, and I'll want to go in and sell those and capture the step-up in basis. I'll recommend my brother does the same. I will also want to take a distribution from my inherited Traditional IRA by the end of the year, though based on what I know about my brother's tax situation I may suggest he waits on his. What is the best use of this money in my financial life, I can't say. I'll probably create another thread about it, once the dust settles. This is my plan for now; if anything here doesn't sound right, please let me know.

Your suggestion to consult a lawyer is a good one. I'll keep it in mind.
I'm so sorry to hear your Dad is not doing well. Really good to hear that you're able to go and see him. Best wishes for the visit.

I would recommend you not worry about IRA distributions and whatnot for now, just focus on your Dad. Whenever he passes, take time to grieve, and leave the financial decisions alone for a little bit if you can. There's no rush to figure out these details right away.

take care,
cj
Katietsu
Posts: 7662
Joined: Sun Sep 22, 2013 1:48 am

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by Katietsu »

This forum tends to attract people who like to have all the legal and financial matters done in the best way possible. Most people’s lives are much messier than this. I am glad that you are moving through this without damaging the interpersonal relationships.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bismarck23 »

twh wrote: Wed Jan 19, 2022 8:07 pm
bismarck23 wrote: Wed Jan 19, 2022 7:19 pm and I'll want to go in and sell those and capture the step-up in basis
In case you are not aware, the stepped up basis happens without having to sell anything. Basically, is is all worth market value on that day. You can choose to just relabel the basis of the asset and keep the asset or sell part of all of it for no-gain/loss (assuming the price doesn't change). In cases I have dealt with, the brokerage just asks you to tell it what to do with the basis in the case of each security.
Yes, thank you for clarifying. My reasons for wanting to sell and “capture” the step-up are (a) I don’t like holding individual stocks, and I can sell with minimal tax cost, and (b) at least for me, most likely the money will be used in the short term (throw it at the mortgage), so I don’t want stock-like volatility. But yes, the step-up would happen whether I sold or not.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bismarck23 »

clip651 wrote: Wed Jan 19, 2022 8:42 pm I'm so sorry to hear your Dad is not doing well. Really good to hear that you're able to go and see him. Best wishes for the visit.

I would recommend you not worry about IRA distributions and whatnot for now, just focus on your Dad. Whenever he passes, take time to grieve, and leave the financial decisions alone for a little bit if you can. There's no rush to figure out these details right away.

take care,
cj
Thanks. This is a bit of an unusual situation in that I have been managing (only basic stuff) my dad’s investments for a few years, so I’ve had some visibility, and couldn’t help but consider the possibility something like this could happen. But yes, I agree, at this point there’s nothing that needs to be done and the focus should be on the people involved.
ee22bee
Posts: 119
Joined: Mon Jan 01, 2018 11:24 am

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by ee22bee »

Very glad you're able to go see your dad, OP. Nothing else is more important.

That said, just a quick mention: If there are unrealized capital losses in his investments, you might consider selling those lots before he passes, for the losses to offset any income. Unused capital losses disappear at death.

Best wishes to you and your family, OP. Hope things go smoothly in the coming days, weeks, and months.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA, what to do?

Post by bismarck23 »

To anyone interested, I posted an update today as an edit to the original post.
ee22bee wrote: Thu Jan 20, 2022 2:32 am Very glad you're able to go see your dad, OP. Nothing else is more important.

That said, just a quick mention: If there are unrealized capital losses in his investments, you might consider selling those lots before he passes, for the losses to offset any income. Unused capital losses disappear at death.

Best wishes to you and your family, OP. Hope things go smoothly in the coming days, weeks, and months.
When I stepped in, my dad had a bunch of unrealized losses in individual stocks, and I recommended he sell them all, plus some unrealized gains, and reinvest the proceeds of both into mutual funds, which he did. Since then, all his legacy holdings (individual stocks) have only appreciated. He has a couple tax lots of reinvested mutual funds that have small (<$100) losses, but I'm not going to bother with harvesting them.

Thanks for the well-wishes.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by bismarck23 »

Bumping this up with an update. Decided to keep this thread rather than make a new one, because the same personalities will be involved.
User avatar
ResearchMed
Posts: 16768
Joined: Fri Dec 26, 2008 10:25 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by ResearchMed »

bismarck23 wrote: Sun Feb 06, 2022 12:15 pm Bumping this up with an update. Decided to keep this thread rather than make a new one, because the same personalities will be involved.
Very sorry for your loss.

RM
This signature is a placebo. You are in the control group.
twh
Posts: 1754
Joined: Sat Feb 08, 2020 2:15 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by twh »

Really sorry
clip651
Posts: 1582
Joined: Thu Oct 02, 2014 11:02 am

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by clip651 »

Very sorry for your loss. It's good you were able to be with your father, and that he passed surrounded by family and without pain.

cj
Katietsu
Posts: 7662
Joined: Sun Sep 22, 2013 1:48 am

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by Katietsu »

Most importantly, I am glad you got to see your Dad and maintain good relationships with your uncles. While this is a finance forum, once one’s basic needs for food and shelter are taken care of, finances are secondary to relationships.

Did you outline what assets your Dad has that will need to go through probate. I believe you thought the Etrade account had beneficiaries. I understand that some of us think about these things as a way to keep grounded, but I would tread lightly about initiating discussions about probate in the next couple of days.

Otherwise, it is very helpful that Dad’s brother already has a good understanding of Dad’s assets and bills. For now, Dad’s money can not be used for his bills. Another family member may wish to “lend” the estate money to cover bills like utilities. Medical bills can wait. Once the executor has his official appointment, he can establish an estate account, fund it with the money in the checking account, and take care of the Dad’s bills.

Whether you need an attorney by the hour, by a flat fee or not at all, is dependent on the state, the assets and liabilities and the executor. Did you have any particular concerns?
User avatar
calmaniac
Posts: 1315
Joined: Fri Jan 30, 2015 2:32 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by calmaniac »

bismarck23 wrote: Sun Jan 16, 2022 7:23 pm I've never been involved in any death/estate issues before, so I'd like to ask the board for any advice or tips. I'm not the executor of the estate, but the uncle who is has some limitations in this area (described below) and asked me for help. It may be tricky to walk the line between being helpful and pushy, but I figure it's best to come armed with good ideas. What steps do we need to take? How do we find a lawyer to probate the will? etc. Thanks very much for the continued support during a sad and unfamiliar time.
Nolo's The Executor's Guide was very helpful when I was the executor and trustee for my parent's estate.
"Pretired", working 20 h/wk. AA 75/25: 30% TSM, 19% value (VFVA/AVUV), 18% Int'l LC, 8% emerging, 25% GFund/VBTLX. Military pension ≈60% of expenses. Pension+SS@age 70 ≈100% of expenses.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by bismarck23 »

Katietsu wrote: Sun Feb 06, 2022 1:00 pm Most importantly, I am glad you got to see your Dad and maintain good relationships with your uncles. While this is a finance forum, once one’s basic needs for food and shelter are taken care of, finances are secondary to relationships.

Did you outline what assets your Dad has that will need to go through probate. I believe you thought the Etrade account had beneficiaries. I understand that some of us think about these things as a way to keep grounded, but I would tread lightly about initiating discussions about probate in the next couple of days.

Otherwise, it is very helpful that Dad’s brother already has a good understanding of Dad’s assets and bills. For now, Dad’s money can not be used for his bills. Another family member may wish to “lend” the estate money to cover bills like utilities. Medical bills can wait. Once the executor has his official appointment, he can establish an estate account, fund it with the money in the checking account, and take care of the Dad’s bills.

Whether you need an attorney by the hour, by a flat fee or not at all, is dependent on the state, the assets and liabilities and the executor. Did you have any particular concerns?
The parent passed away in NY state.

Thanks for the helpful information about lending money to the estate until the executor gets appointed.

Yes, to confirm, the Etrade brokerage and two IRAs all had listed beneficiaries, so my understanding is they should pass directly to my brother and me, without going through probate.

I have two minor concerns. I have not seen the will, but I heard from the less wealthy/non-executor uncle that my dad left the house in the will to the wealthy/executor uncle, because that uncle also lives in NY, but there was an agreement that when the house is sold, the proceeds would be "given" to the less wealthy/non-executor uncle. My immediate concern hearing that was gift tax, especially because the wealthier uncle is possibly at risk for owing estate tax later on. When I mentioned this, the other uncle assured me the wealthier uncle's assets are nowhere near the $24M threshold. Even if not true today, that may change by the time he passes away, maybe because the exemption will be lowered and/or if his wife sells her business at some point. This kind of planning is unfortunately typical, and I will try to advise them on the best course of action going forward, but I also don't expect any of these shenanigans to have a direct impact on me, so I'll try not to get worked up over it. Once I review the will, the picture should be a little clearer.

The second is that I want to make sure we don't make any mistakes regarding taxes. My dad made Roth conversions in 2021 and 2022. I am confident he's in the safe harbor for 2021, but I believe his 2021 income taxes on the conversion are still due April 15th, or at least the payment plus a request for extension.

For the 2022 conversion, no taxes were withheld, and my understanding is that it would be best to file estimated taxes, also by April 15 2022, to get him into the safe harbor for 2022. Then, the balance of the taxes on the 2022 conversion could be paid by April 2023 without penalty. Because my brother and I most directly benefitted from these conversions (inheriting larger Roth IRAs and smaller Traditional IRAs), we have an agreement to cover the conversion taxes 50/50, but we should be able to do this easily by selling some of the assets in our respective halves of the brokerage account, after receiving a step-up in basis.

My dad will not owe any estate tax based on the size of his estate, but I believe the estate still has to file an "estate tax return" for interest/dividends/etc received after the date of death. I have no idea what the timing of this needs to be. I assume that the taxes owed on this return will be small or zero.

Do we have to notify Social Security to stop his payments? What should we look for in an attorney help with this? Also, who should we enlist to handle the tax end of things? My dad's accountant would be my first thought. Thanks in advance.
Last edited by bismarck23 on Sun Feb 06, 2022 3:28 pm, edited 1 time in total.
User avatar
cchrissyy
Posts: 2339
Joined: Fri May 05, 2017 10:35 pm
Location: SF bay area

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by cchrissyy »

i'm sorry about your dad. it's good you went.
60-20-20 us-intl-bond
Katietsu
Posts: 7662
Joined: Sun Sep 22, 2013 1:48 am

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by Katietsu »

bismarck23 wrote: Sun Feb 06, 2022 2:58 pm
The parent passed away in NY state.

Thanks for the helpful information about lending money to the estate until the executor gets appointed.

Yes, to confirm, the Etrade brokerage and two IRAs all had listed beneficiaries, so my understanding is they should pass directly to my brother and me, without going through probate.

I have two minor concerns. I have not seen the will, but I heard from the less wealthy/non-executor uncle that my dad left the house in the will to the wealthy/executor uncle, because that uncle also lives in NY, but there was an agreement that when the house is sold, the proceeds would be "given" to the less wealthy/non-executor uncle. My immediate concern hearing that was gift tax, especially because the wealthier uncle is possibly at risk for owing estate tax later on. When I mentioned this, the other uncle assured me the wealthier uncle's assets are nowhere near the $24M threshold. Even if not true today, that may change by the time he passes away, maybe because the exemption will be lowered and/or if his wife sells her business at some point. This kind of planning is unfortunately typical, and I will try to advise them on the best course of action going forward, but I also don't expect any of these shenanigans to have a direct impact on me, so I'll try not to get worked up over it. Once I review the will, the picture should be a little clearer.

As hard is it is for the type of people who spend leisure time on a forum like this, I would stay a step back from this. Unless you see a choice that can be made now to accomplish Dad’s goal in a better way, there is no point to bringing up how something could have been set up better. As you said, this will not impact you. And it will probably work out just fine for them.

The second is that I want to make sure we don't make any mistakes regarding taxes. My dad made Roth conversions in 2021 and 2022. I am confident he's in the safe harbor for 2021, but I believe his 2021 income taxes on the conversion are still due April 15th, or at least the payment plus a request for extension.
This is just a regular tax return except that your Dad’s date of death will be noted and the executor will sign. You are right that the return or an extension request should be filed by April 15. Including a payment would eliminate the possibility of interest or penalty charges. If he has had someone prepare his taxes previously, I would just let them do this one as well.

For the 2022 conversion, no taxes were withheld, and my understanding is that it would be best to file estimated taxes, also by April 15 2022, to get him into the safe harbor for 2022. Then, the balance of the taxes on the 2022 conversion could be paid by April 2023 without penalty.

This is also just a regular personal income tax return and your understanding appears correct.

Because my brother and I most directly benefitted from these conversions (inheriting larger Roth IRAs and smaller Traditional IRAs), we have an agreement to cover the conversion taxes 50/50, but we should be able to do this easily by selling some of the assets in our respective halves of the brokerage account, after receiving a step-up in basis.

My dad will not owe any estate tax based on the size of his estate, but I believe the estate still has to file an "estate tax return" for interest/dividends/etc received after the date of death. I have no idea what the timing of this needs to be. I assume that the taxes owed on this return will be small or zero.

This should not be referred to as an estate tax return. What you mean here is an income tax return for the estate. This only needs filed if there are more than $600 in income. It seems that the only real income generating asset is the ETrade account. A limited number of dividends are paid in February. And my read is that you will have this out of Dad’s name before the month is over. It seems that this return might be able to be avoided completely. You also get to pick your year for this return and the first filing period does not need to be for 12 months but can be for less. So this might not be needed or might be able to be dispensed with sooner rather than later. You would need to ask Dad’s cc accountant if he handles 1041 returns.

Do we have to notify Social Security to stop his payments?
The funeral director has always handled this in my experience.
What should we look for in an attorney help with this? Also, who should we enlist to handle the tax end of things? My dad's accountant would be my first thought. Thanks in advance.
Yes to the accountant. It sounds pretty straightforward that any competent attorney should be able to handle it. I will let one of the more legal members of the forum address the best arrangement for a lawyer in this situation.
Makefile
Posts: 2657
Joined: Fri Apr 22, 2016 11:03 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by Makefile »

bismarck23 wrote: Sun Feb 06, 2022 2:58 pm My dad will not owe any estate tax based on the size of his estate, but I believe the estate still has to file an "estate tax return" for interest/dividends/etc received after the date of death. I have no idea what the timing of this needs to be. I assume that the taxes owed on this return will be small or zero.
There is Form 1040 of course, for final personal return.
What you are talking about is Form 1041, income tax for an estate.
There is also Form 706, a true "estate tax" return (rare). As you know already, NY has a state estate tax also.
twh
Posts: 1754
Joined: Sat Feb 08, 2020 2:15 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by twh »

bismarck23 wrote: Sun Feb 06, 2022 2:58 pm Do we have to notify Social Security to stop his payments? What should we look for in an attorney help with this? Also, who should we enlist to handle the tax end of things? My dad's accountant would be my first thought. Thanks in advance.
Social Security will figure it out automatically. The death gets reported and it all just happens.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by bismarck23 »

Katietsu wrote: Sun Feb 06, 2022 4:19 pm
bismarck23 wrote: Sun Feb 06, 2022 2:58 pm
The parent passed away in NY state.

Thanks for the helpful information about lending money to the estate until the executor gets appointed.

Yes, to confirm, the Etrade brokerage and two IRAs all had listed beneficiaries, so my understanding is they should pass directly to my brother and me, without going through probate.

I have two minor concerns. I have not seen the will, but I heard from the less wealthy/non-executor uncle that my dad left the house in the will to the wealthy/executor uncle, because that uncle also lives in NY, but there was an agreement that when the house is sold, the proceeds would be "given" to the less wealthy/non-executor uncle. My immediate concern hearing that was gift tax, especially because the wealthier uncle is possibly at risk for owing estate tax later on. When I mentioned this, the other uncle assured me the wealthier uncle's assets are nowhere near the $24M threshold. Even if not true today, that may change by the time he passes away, maybe because the exemption will be lowered and/or if his wife sells her business at some point. This kind of planning is unfortunately typical, and I will try to advise them on the best course of action going forward, but I also don't expect any of these shenanigans to have a direct impact on me, so I'll try not to get worked up over it. Once I review the will, the picture should be a little clearer.

As hard is it is for the type of people who spend leisure time on a forum like this, I would stay a step back from this. Unless you see a choice that can be made now to accomplish Dad’s goal in a better way, there is no point to bringing up how something could have been set up better. As you said, this will not impact you. And it will probably work out just fine for them.

The second is that I want to make sure we don't make any mistakes regarding taxes. My dad made Roth conversions in 2021 and 2022. I am confident he's in the safe harbor for 2021, but I believe his 2021 income taxes on the conversion are still due April 15th, or at least the payment plus a request for extension.
This is just a regular tax return except that your Dad’s date of death will be noted and the executor will sign. You are right that the return or an extension request should be filed by April 15. Including a payment would eliminate the possibility of interest or penalty charges. If he has had someone prepare his taxes previously, I would just let them do this one as well.

For the 2022 conversion, no taxes were withheld, and my understanding is that it would be best to file estimated taxes, also by April 15 2022, to get him into the safe harbor for 2022. Then, the balance of the taxes on the 2022 conversion could be paid by April 2023 without penalty.

This is also just a regular personal income tax return and your understanding appears correct.

Because my brother and I most directly benefitted from these conversions (inheriting larger Roth IRAs and smaller Traditional IRAs), we have an agreement to cover the conversion taxes 50/50, but we should be able to do this easily by selling some of the assets in our respective halves of the brokerage account, after receiving a step-up in basis.

My dad will not owe any estate tax based on the size of his estate, but I believe the estate still has to file an "estate tax return" for interest/dividends/etc received after the date of death. I have no idea what the timing of this needs to be. I assume that the taxes owed on this return will be small or zero.

This should not be referred to as an estate tax return. What you mean here is an income tax return for the estate. This only needs filed if there are more than $600 in income. It seems that the only real income generating asset is the ETrade account. A limited number of dividends are paid in February. And my read is that you will have this out of Dad’s name before the month is over. It seems that this return might be able to be avoided completely. You also get to pick your year for this return and the first filing period does not need to be for 12 months but can be for less. So this might not be needed or might be able to be dispensed with sooner rather than later. You would need to ask Dad’s cc accountant if he handles 1041 returns.

Do we have to notify Social Security to stop his payments?
The funeral director has always handled this in my experience.
What should we look for in an attorney help with this? Also, who should we enlist to handle the tax end of things? My dad's accountant would be my first thought. Thanks in advance.
Yes to the accountant. It sounds pretty straightforward that any competent attorney should be able to handle it. I will let one of the more legal members of the forum address the best arrangement for a lawyer in this situation.
Thanks, this all great information.

I want to make sure I get the mechanics right of my brother and I paying the 2021 and 2022 income tax bills correct, and avoid problems such as sticking the estate with the tax bill (such that proceeds from the sale of the house need to get used, which are supposed to go to another family member), creating unwanted gift tax returns, etc. Is it as simple as us both selling enough securities in our brokerage accounts once the titles switch to us, then transferring that amount into the estate account, and the executor pays taxes from there?

Also, this is a bit random and risks side-tracking the topic, but I noticed this large $3,000 sign-up bonus on a Capital One business credit card. I'm not a credit card churner but I have gone for $3-500 sign-up bonuses before when I've gotten offers, and was happy to jump on a couple Chase ~$1,000 bonuses a few years ago. Especially if the executor isn't able to get everything set up by tax time, are there any issues with me opening this card and using it to pay my dad's taxes? I would just subtract the amount paid from my share of taxes due April 2023. The total of 2021 taxes and 2022 estimated payments will be more than the $50,000 spend requirement. I've skimmed this thread and didn't see anything that would prevent it from working. I realize it's a business card, but I think I can use my wife's business's EIN without problems.
bsteiner
Posts: 9151
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by bsteiner »

bismarck23 wrote: Sun Feb 06, 2022 2:58 pm
Katietsu wrote: Sun Feb 06, 2022 1:00 pm Most importantly, I am glad you got to see your Dad and maintain good relationships with your uncles. While this is a finance forum, once one’s basic needs for food and shelter are taken care of, finances are secondary to relationships.

Did you outline what assets your Dad has that will need to go through probate. I believe you thought the Etrade account had beneficiaries. I understand that some of us think about these things as a way to keep grounded, but I would tread lightly about initiating discussions about probate in the next couple of days.

Otherwise, it is very helpful that Dad’s brother already has a good understanding of Dad’s assets and bills. For now, Dad’s money can not be used for his bills. Another family member may wish to “lend” the estate money to cover bills like utilities. Medical bills can wait. Once the executor has his official appointment, he can establish an estate account, fund it with the money in the checking account, and take care of the Dad’s bills.

Whether you need an attorney by the hour, by a flat fee or not at all, is dependent on the state, the assets and liabilities and the executor. Did you have any particular concerns?
The parent passed away in NY state.
...
Yes, to confirm, the Etrade brokerage and two IRAs all had listed beneficiaries, so my understanding is they should pass directly to my brother and me, without going through probate.

I have two minor concerns. I have not seen the will, but I heard from the less wealthy/non-executor uncle that my dad left the house in the will to the wealthy/executor uncle, because that uncle also lives in NY, but there was an agreement that when the house is sold, the proceeds would be "given" to the less wealthy/non-executor uncle. My immediate concern hearing that was gift tax, especially because the wealthier uncle is possibly at risk for owing estate tax later on. When I mentioned this, the other uncle assured me the wealthier uncle's assets are nowhere near the $24M threshold. Even if not true today, that may change by the time he passes away, maybe because the exemption will be lowered and/or if his wife sells her business at some point. This kind of planning is unfortunately typical, and I will try to advise them on the best course of action going forward, but I also don't expect any of these shenanigans to have a direct impact on me, so I'll try not to get worked up over it. Once I review the will, the picture should be a little clearer.

The second is that I want to make sure we don't make any mistakes regarding taxes. My dad made Roth conversions in 2021 and 2022. I am confident he's in the safe harbor for 2021, but I believe his 2021 income taxes on the conversion are still due April 15th, or at least the payment plus a request for extension.

For the 2022 conversion, no taxes were withheld, and my understanding is that it would be best to file estimated taxes, also by April 15 2022, to get him into the safe harbor for 2022. Then, the balance of the taxes on the 2022 conversion could be paid by April 2023 without penalty. Because my brother and I most directly benefitted from these conversions (inheriting larger Roth IRAs and smaller Traditional IRAs), we have an agreement to cover the conversion taxes 50/50, but we should be able to do this easily by selling some of the assets in our respective halves of the brokerage account, after receiving a step-up in basis.
...
Sorry to hear about your father's passing.

You probate the Will, not the assets. Probating a Will in New York is generally not difficult, expensive or burdensome.

No estimated tax payments are required after someone dies. Treas. Reg. § 1.6153-1(a)(4): https://www.law.cornell.edu/cfr/text/26/1.6153-1.

It's hard to be sure what the facts are regarding the house, but the lawyer should be able to figure out how best to accomplish the desired result.

As I and others have pointed out, his planning wasn't optimal. However, there may be opportunities to improve on it post-mortem, such as by disclaimers. The most important thing is to make sure no one does anything with the assets until the lawyer has had a chance to review the Will, the beneficiary designations and the assets, and to discuss the choices with you (and anyone else involved).

The accountant should coordinate with the lawyer as to the income tax elections.
bismarck23 wrote: Sun Feb 06, 2022 5:50 pm ...
I want to make sure I get the mechanics right of my brother and I paying the 2021 and 2022 income tax bills correct, and avoid problems such as sticking the estate with the tax bill (such that proceeds from the sale of the house need to get used, which are supposed to go to another family member), creating unwanted gift tax returns, etc. Is it as simple as us both selling enough securities in our brokerage accounts once the titles switch to us, then transferring that amount into the estate account, and the executor pays taxes from there?
...
Wait until you know all the facts. Then the lawyer can make appropriate recommendations.
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by bismarck23 »

bsteiner wrote: Sun Feb 06, 2022 6:10 pm Sorry to hear about your father's passing.

You probate the Will, not the assets. Probating a Will in New York is generally not difficult, expensive or burdensome.

No estimated tax payments are required after someone dies. Treas. Reg. § 1.6153-1(a)(4): https://www.law.cornell.edu/cfr/text/26/1.6153-1.

It's hard to be sure what the facts are regarding the house, but the lawyer should be able to figure out how best to accomplish the desired result.

As I and others have pointed out, his planning wasn't optimal. However, there may be opportunities to improve on it post-mortem, such as by disclaimers. The most important thing is to make sure no one does anything with the assets until the lawyer has had a chance to review the Will, the beneficiary designations and the assets, and to discuss the choices with you (and anyone else involved).

The accountant should coordinate with the lawyer as to the income tax elections.
bismarck23 wrote: Sun Feb 06, 2022 5:50 pm ...
I want to make sure I get the mechanics right of my brother and I paying the 2021 and 2022 income tax bills correct, and avoid problems such as sticking the estate with the tax bill (such that proceeds from the sale of the house need to get used, which are supposed to go to another family member), creating unwanted gift tax returns, etc. Is it as simple as us both selling enough securities in our brokerage accounts once the titles switch to us, then transferring that amount into the estate account, and the executor pays taxes from there?
...
Wait until you know all the facts. Then the lawyer can make appropriate recommendations.
Thanks, great advice. The executor is already looking for an attorney and we have a lead on a good one in the area.

To be clear, there will be a large (>$100,000) income tax bill, federal and state, on Roth conversions that were done in January with no withholding. You're saying we won't owe any interest or penalties if we wait until April 2023 to pay the tax bill?
Topic Author
bismarck23
Posts: 299
Joined: Sun Oct 31, 2021 5:37 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by bismarck23 »

calmaniac wrote: Sun Feb 06, 2022 1:18 pm
bismarck23 wrote: Sun Jan 16, 2022 7:23 pm I've never been involved in any death/estate issues before, so I'd like to ask the board for any advice or tips. I'm not the executor of the estate, but the uncle who is has some limitations in this area (described below) and asked me for help. It may be tricky to walk the line between being helpful and pushy, but I figure it's best to come armed with good ideas. What steps do we need to take? How do we find a lawyer to probate the will? etc. Thanks very much for the continued support during a sad and unfamiliar time.
Nolo's The Executor's Guide was very helpful when I was the executor and trustee for my parent's estate.
Ordered! Thanks much!
water2357
Posts: 654
Joined: Sat Sep 12, 2020 9:24 am

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by water2357 »

If your father was receiving social Security, remember that he was entitled to the payment made in the month of his death, since this payment is actually what was owed to him for the prior month (during which he was alive the entire month).

The payment amount consists of his Social Security (for the prior month) less his Medicare Part B premium for the current month (the month in which he died), i.e. his normal monthly direct deposit.

Social Security will often reach into the person's bank account where Social Security is direct deposited and take the payment that was paid in the month of death back. This is wrong, if they do this, you will need to contact Social Security and get them to return the payment. The only time there is any question about the SocSec payment is if the date of death is the first or last day of the month. If this is the case there are more rules, but if not and the deceased passed away mid month, SocSec shouldn't be taking that payment back, even if e.g. it is paid after the date of death. For example, someone could have died on the 15th of January, but their direct deposit is normally the 4th Wednesday of the month, that would be January 26th (in 2022). The deceased is entitled to that Jan 26th payment.
User avatar
cheese_breath
Posts: 11769
Joined: Wed Sep 14, 2011 7:08 pm

Re: Parent has cognitive impairment, caregiver doesn't want POA [Update: parent has passed]

Post by cheese_breath »

water2357 wrote: Mon Feb 07, 2022 6:54 am ... Social Security will often reach into the person's bank account where Social Security is direct deposited and take the payment that was paid in the month of death back. This is wrong, if they do this, you will need to contact Social Security and get them to return the payment. ...
SSA form SSA-1724
The surest way to know the future is when it becomes the past.
Post Reply