The transition of a family member from his home of many years to a senior-care facility has "a lot of moving parts," as my dad used to say. The selection of a senior-care facility requires some research and an examination of one's options.
The transition of that family member's various financial accounts and obligations to his new community and setting the person up to operate smoothly and consistently with one's estate plan requires some attention as well.
If you are involved with the care of the family member, review carefully (with permission, of course) all of the person's mail. Seniors often have made commitments to charitable or political causes that they really cannot afford, however worthwhile those causes may be. Part of your concern for moving your family member closer was your concern that the person could not adequately maintain his or her affairs. You will likely see evidence of that in the mail.
There also can be issues setting up financial accounts. If a daughter, for example, is in charge of the mother's finances, the new account that is set up may likely have the mother's name and the daughter's name on it as joint tenants. More than likely, the contract with the bank or credit union states they are joint tenants with right of survivorship.
If the mother keeps much money in those new accounts, and many seniors do, all of these funds will go to the daughter, who is a joint tenant, when the mother dies, and none of them go to any of the other children. And the daughter has complete access to the money herself while the mother is living.
Even if the mother's will provides that her assets will be divided equally among her children, the joint-tenant daughter will get all the money in those joint accounts plus her share under the will. One child, therefore, will likely get a highly disproportionate share of the mother's assets at her death.
This issue can be avoided.
The new accounts can be set up in the name of the mother only, but the daughter can have signatory rights. The mother owns the accounts, but the daughter can sign the checks. But when the mother dies, that account does not go totally to the daughter.
Independent of this account issue, the mother should have executed a durable (financial) power of attorney to one or more of her children, for a variety of reasons. In our example, the mother can open the account in her name, but the checks can note on them that the daughter is the power of attorney. The daughter can tend to her mother's financial affairs, but she will not inherit the monies in the account outright when her mother dies.
Finally, the mother can designate beneficiaries of the account who will receive the monies in the account upon her death. These accounts are often called "Payable on Death," or "POD" accounts. They operate similar to an insurance policy.
These POD accounts can present some issues if you provide in your will that assets of your estate go into trust for some or all of your adult children, or if you set up a trust for your minor grandchildren, for their education and other purposes. The POD accounts will not be subject to any trusts, or other special provisions, you have set up in your will.
Parents are more often than in the past setting up trusts for their children because their children have addictions, difficulty managing their finances, or for other reasons. In your zeal to "make things easy" with POD accounts, do not nullify your overall estate plan.
Remember: An informed choice is a smart choice.
■ Mike Wells is an attorney with Wells Jenkins Lucas & Jenkins, PLLC
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