Mom passed away Sat. now what to do with their finances?

[Jeff Matthews]

OK, to take it a step further. Let's say your a single parent and are a careful planner and you have beneficiaries stated on all financial accounts. You've already deeded any real estate property to your kids. You've sold your vehicles away. I'm thinking at this point there is nothing to probate. Is that correct?

Pretty much. The only reason for probate is to continue the chain of title to property from the dead to the living. If, at the moment of death, the decedent's name is no longer on the title to property, probate is not needed.

This sounds like good planning and all, but from some standpoints, it can be disastrous. I had a client who gave POA to his son, and the son ripped him off and squandered everything. It was gone. All gone. And the poor dad was left with meager means to live out the rest of his life.

Not that anyone here would do that. I am just giving reasons to use caution.

[colterphoto1]

Sorry to hear of your loss. I faced a situation a decade ago when Grandpa was killed tragically, then Mom passed two months later. I had farms, houses, crops in the ground, annuities. They had 'made plans' but not for the set of circumstances I faced with money flowing through so quickly. Get professional advice as the fellows said.Durable POA for you over your Father's finances (if he needs assistance) will help as you can make decisions without any committee. In most states, inheiretance passes directly from deceased spouse to the surviving spouse but the advice of someone schooled in these matters is critical. If there are annuities that can be cashed either right away or over a period of time there are a lot of factors to consider. Always ask what the TAX CONSEQUENCE of an action might be. Especially in these rapidly changing times, that can count for a lot.

Do the best you can and then forgive yourself for any decisions you later determine weren't the absolute best. There are bound to be a couple.

[JL Sargent]

Jeff, thank you so much. You and Coytee both have been a super help to me on this. Had a nice talk with Coytee on the phone last night, great guy.

I hope that I can help my father get these accounts straightened out without being his POA really. Is that possible? I did take it from our first meeting at the bank that they either want me to be POA or be named on the account(s) to discuss them.

EDIT: Hey Colter, thanks! I'm gonna try my best to not have any reason for remorse over my actions. I can say that any mistakes will be ones I make in the best interest of my father. Of course, he already knows that about me. [Y]

[Jeff Matthews]

Jeff, thank you so much. You and Coytee both have been a super help to me on this. Had a nice talk with Coytee on the phone last night, great guy.

I hope that I can help my father get these accounts straightened out without being his POA really. Is that possible? I did take it from our first meeting at the bank that they either want me to be POA or be named on the account(s) to discuss them.

Sure. If your father is of sound mind, he can do whatever he wants on his own. Your involvement typically is needed only if he is not of sound mind. Thus, you plan ahead for those things by getting a POA now. If you don't, and he becomes of unsound mind later, you will have to get authority through guardianship proceedings, and those are expensive. POA is cheap, cheap, cheap.

For liability reasons pointed out by Richard (and me, subsequently), I wouldn't list myself as an owner of my dad's account.

[Coytee]

I'm at work during the day and can only read/view the forum...can't type a word as I'm on their PC.

Can accounts and real property titles be held as living trusts and as POD/TOD's?

I think Jeff has already answered this but just in case...

"In my world" (the world of investments, I do not pretend to answer for real property) the practical answer if not technical answer "no". First off, having a trust account means you have already gone through the thought of creating a trustee, successor trustee, beneficiary & successor beneficiary.

Why go through the complication of adding yet another form to repeat that which should already be stated in the trust?

Never having been faced with this question, the reason I think the firm would reject said beneficiary form would be because the trust 'owns' the account (and the trustee controls the trust). The trust document is the boss and dictates the rules. It would be a potential clash if you came in (even if as trustee) and put a POD/TOD designation on the account as it could conflict with the dictates of the trust and I don't think any firm would allow themselves to be put into that position.

Bottom line in my view is, if someone has a trust they are done. Every account that is owned by the trust (put into the name of) is controlled by the trust and you can forget these other documents.

What I do is talk to people that do not have a trust, do not care to go through the expense of getting one and, use these documents as tools to create some of the same results that a trust might create.

[Coytee]

$10,000, $50,000, $250,000

I'm digging the hourly rates.... []

[Coytee]

Something (in my opinion) that you do NOT want to do is put your name on your fathers accounts as joint owner. I'll tell you why. Let's presume you DO make the account joint. There are reasons why that's nice to do and many people do it. Let's then fast forward 2 years and you are in an accident and run a child over. The parents are likely to sue you and anything you own. If you have your name on your fathers $20,000 checking account then half of it is yours. It would be at risk of being clawed at. They might win some of it, they might not.

What if however, you instead left the account in your fathers name ONLY and did two things. First is have him grant you powers of attorney. Now, you can deal with the account as though it WAS your account and still have that wall of protection for him since it's not legally your account. If that accident now happened, his account could not be clawed at because your name is not on it.

I did not see this post yesterday. Another astute observation. Absolutely correct. Not only for protection against car accidents and torts, but same applies if something happens and you get sued on a debt - such a unpaid credit cards, mortgage or a breach of contract where your customer sues you for a bad home repair you did for him. Or what about if YOUR SPOUSE has a little too much to drink and has a wreck on the way home from the Super Bowl party? There are too many possibilities where DAD's money is exposed by holding the account jointly.

I definitely agree with this advice, and I see no reason not to do this. It is as cheap as dirt to do. An alternative to POA is to have Dad add you as signatory on the account, but not add you on the name of the account as an account holder - just like Exxon gives employees check-writing authority without the employees owning the account.

I think this was the post that brought this next thought up.

To anyone that cares about this... I personally feel that "today" (meaning have the conversation now and do not put it off) is the day to talk about these things AND act upon them.

Let me present it this way: You are 40./50/60/70 years old and in great health. I will admit that if I'm talking to someone who is 40/50 I won't make this my first priority (absent sensing something going on like health issues). But... with regard to doing these things (POD/TOD/Trust/hugging the wife...) I make the next comment:

"Mr. Jones.... doing something like a POA on your account is very much like buying car insurance"

"huh?" thinks Mr. Jones

"Mr. Jones, the best time to buy car insurance is before you have an accident....if you wait until you after the accident, it's too late. Such is the idea of creating a POA.... if you wait unti you need the POA to create it, odds are it's too late. The time to talk about it and act on it is before you might need it"

By this time, I can sense going on in their head

[Coytee]

The daughters would have even been better off paying Richard or me $10k to tell them how to use their BIC pens!

I'm really digging your thinking process.... it would be nice if I could make deals like that. Seems like such a no-brainer however, them darn FINRA folks and their dayum rules.....

[Coytee]

I did take it from our first meeting at the bank that they either want me to be POA or be named on the account(s) to discuss them.

Putting you on as POA or perhaps signatory allows them to talk freely with you without your father being present. If you do not have that level of authority then they will STILL talk to you but.... they will likely need his express permission to do so each time (which can be a real pain in the hiney under various circumstances)

[Coytee]

Jeff, thank you so much. You and Coytee both have been a super help to me on this. Had a nice talk with Coytee on the phone last night, great guy.

I hope that I can help my father get these accounts straightened out without being his POA really. Is that possible? I did take it from our first meeting at the bank that they either want me to be POA or be named on the account(s) to discuss them.

Sure. If your father is of sound mind, he can do whatever he wants on his own. Your involvement typically is needed only if he is not of sound mind. Thus, you plan ahead for those things by getting a POA now. If you don't, and he becomes of unsound mind later, you will have to get authority through guardianship proceedings, and those are expensive. POA is cheap, cheap, cheap.

For liability reasons pointed out by Richard (and me, subsequently), I wouldn't list myself as an owner of my dad's account.

Ok, so this was the post that kicked the car insurance thought into my head. disregard the car insurance analogy above and re-read it now to apply to the context of this post.

Do it now. Better to have it done and never need it than.....

[JL Sargent]

Great food for thought on the POA. We have touched on it briefly in the past discussing mom but not him specifically. I'll discuss it with him again in the near future.

Thanks again everybody.

[Jeff Matthews]

I'm at work during the day and can only read/view the forum...can't type a word as I'm on their PC.

Can accounts and real property titles be held as living trusts and as POD/TOD's?

I think Jeff has already answered this but just in case...

"In my world" (the world of investments, I do not pretend to answer for real property) the practical answer if not technical answer "no". First off, having a trust account means you have already gone through the thought of creating a trustee, successor trustee, beneficiary & successor beneficiary.

Why go through the complication of adding yet another form to repeat that which should already be stated in the trust?

Never having been faced with this question, the reason I think the firm would reject said beneficiary form would be because the trust 'owns' the account (and the trustee controls the trust). The trust document is the boss and dictates the rules. It would be a potential clash if you came in (even if as trustee) and put a POD/TOD designation on the account as it could conflict with the dictates of the trust and I don't think any firm would allow themselves to be put into that position.

Bottom line in my view is, if someone has a trust they are done. Every account that is owned by the trust (put into the name of) is controlled by the trust and you can forget these other documents.

What I do is talk to people that do not have a trust, do not care to go through the expense of getting one and, use these documents as tools to create some of the same results that a trust might create.

Given your response, Richard, I now see that I probably misread his question. I did not think he meant "in trust" and with a "POD" designation for the same property.

No. You would not do that. It gets messy, convoluted and confusing - just as Richard described. I thought the question was slightly different.

I will add to this that this "messy, convoluted and confusing" potential is another reason I try first to find plans which do not involve trusts. Trusts are great for people with deep pockets that don't mind paying people good money to keep all the details sorted out. You should have a good reason to have a trust.

There are still people out there who had wills with testamentary trusts set up in order to avoid estate taxes when it only took $600k to have a taxable estate. Trusts were good vehicles for tax avoidance. However, trusts complicate things that do not pertain to taxes - e.g., "I leave all my property my trustee in trust.... My trustee shall use such amount of trust corpus and income as needed for my spouse's health, maintenance, education and support, with remainder to my children on the death of my spouse."

It's fine if you saved a lot of taxes doing that, but if you wound up with a modest, non-taxable estate, it's a rotten headache. And nowadays, it takes a pretty darn large estate before there are any tax concerns. Yet, there are all these PITA trust provisions still in wills.

I had to do some finagling to terminate some testamentary trusts just to make life easier on a surviving spouse. There was no point in his house and car title being held in trust by his kids. To downsize, he'd have had to get the kids to sign listing agreements, closing documents and such. To get a new car, the kids have to sign title to do the trade-in. Blech.... Dad was competent and didn't need those headaches. The kids did not want, nor need, to direct Dad's affairs.

[Jeff Matthews]

Great food for thought on the POA. We have touched on it briefly in the past discussing mom but not him specifically. I'll discuss it with him again in the near future.

Thanks again everybody.

There are 2 options:

1. The power granted can be effective immediately, or

2. The power granted will not become effective until dad lacks mental capacity (e.g., Alzheimer's, coma, hospital sedation).

Dad might not feel good about turning over the keys since he can drive right now. So, maybe he would be convinced to give one of the kids the keys so that they can help him when he can't help himself.

That's what it's mostly for. It's a $200 POA now, or a $3,000 - 5,000 guardianship later. (Some people figure out how to DIY a POA).

[BigStewMan]

sorry for your loss. been through that loss myself. hope all the business stuff gets worked out quickly.

[JL Sargent]

4 months have passed since I started this thread. Armed with the info I got from Jeff and Coytee (forever indebted to you guys) I was able to help my dad take care mom's finances. This involved IRAs, 401Ks, many mutually held accounts, several CDs they jointly held, etc. Mom had dad listed as the primary beneficiary on retirement accounts so this helped tremendously!

An interesting challange was getting my dad benefits from mom's Social Security. I did not know this, but a surviving spouse is eligible for the difference in benefits if the deceased had a bigger benefit. This was the case for my dad and we were able to get the difference for him.

At one point I was able to consolide 9 different IRAs into 1 and doubling the interest rate it earns without any penalty or charge. This was because dad is over 70, named beneficiary, and a surviving spouse.

Well guys, I just wanted to once again say thanks for all the heartfelt condolences, support, and great advice that I received here on the Klipsch forum. Couldn't have done it without you!