Elderly Parent: Estate Planning

[Anonymous]

Hi All! Here's my question:

My mom is in her 80s and I have POA over her medical and financial. I've already been managing all of her medical and bills (aka life). I'm drafting a will and plan to have it notarized - all with her consent and the consent of my siblings. It's evenly splitting everything between me and my siblings. I've been doing all of this without legal counsel, but it's been simple enough. She owns two properties and has some modest life savings. No investments otherwise. She has a pension. I've already shared the financial POA with her bank and pension fund. Anything that sounds alarming from what I've reported so far? I'm trying to do all this without breaking the bank aka my personal finances since my mom is cheap and won't pay for any of this. We aren't The Kennedy family or anything, so not too worried about any future lawsuits here. Thoughts? Any potential pitfalls?

[Anonymous]

Consider having all of her assets put into a trust with her heirs' names on it. If that's viable in your state, it can avoid the whole probate process.

When you've drafted a will and have had your siblings agree to it, please see an estate lawyer or planner. There's a lot of things you can and cannot do to protect the assets if she needs nursing home-type care.

[Anonymous]

A lawyer will help you be sure that any will is properly executed before the requisite number of witnesses. Need for/benefit of notary varies by jurisdiction.

[Anonymous]

Adding: never forget that a will is one place where if you screw up and don’t discover it before the will would become active, you can’t fix it later.

[Anonymous]

I probably wouldn’t do a trust at this stage of the game- all assets would have to be retitled into the trust and that’s a pain and takes time and energy. I don’t think the juice would be worth the squeeze. Honestly wills can be relatively inexpensive, this is one thing I probably would splurge for- and this is coming from someone who did their own divorce paperwork.

[Anonymous]

The properties could turn into an issue. Even siblings who are close can disagree when it comes to property ownership. Fun beach rentals cause huge issues, but even just a regular rental in a suburban area can cause issues when you have to agree on repairs, who will be the contact person to real-estate agent, etc.

Your mom needs to pay. If not record all expenses and get your siblings to agree in writing you will be reimbursed from the estate. Better to make mom pay.

I was happy go lucky when this all started, and felt I could work even with a difficult sibling. i was helping my parents a ton and of course didn't charge and eventually they get demanding, siblings might get demanding and no good deed went unpunished for me.

Document everything in case one crazy sibling suddenly decided you are robbing mom. I finally had enough and we used parent's money to hire out everything. After all those years of free labor I am the bad guy.

[Anonymous]

I know you said you are trying to save money. This might be a place I’d be willing to spend money if I could at all.

Some will and trust attorneys offer a flat rate.

We paid $1000. There was preparation beforehand, they put the house into a trust, and they had the right number of witnesses present to sign off on everything. We all signed in an assembly line.

In a consultation, a second lawyer looked it over and said all looked good. He didn’t charge us for that visit remarkably.

[Anonymous]

Why does she continue to own the properties? She's 80.

[Anonymous]

pp again, is this her primary residence and a vacation home? Or 2 investment properties?

[Anonymous]

There is no reason for you to be footing the bill. There should be a clause in a properly drafted will for compensation to the estate for the Estate's expenses. Whoever the is the executor would handle that. If the executor is you, you would have a legal basis to compensate yourself for any fees incurred by you on behalf the estate. If you have a POA in place right now, that too, gives you the ability to compensate yourself for your time and for your expenses on behalf of the estate. As long as it also covers a financial power of attorney.

[Anonymous]

She's in an assisted living place on the east coast (closer to all her kids who now have to help her with care) and has two homes (one just land and other WAS her primary residence until her needs increased). We know we eventually need to get her to sell some of these properties. She's only been at the AL place for a few months. The POA stuff is also all recent.

[Anonymous]

Anonymous wrote:Why does she continue to own the properties? She's 80.

Not the OP but my mom is 82 and has dementia and we have to keep her rental property until the end to avoid depreciation recapture. We will sell it after she’s gone. It’s appreciated nicely and we don’t want her to take the tax hit.

[Anonymous]

PP makes a good point about taxes. A lawyer can help you figure that out as well.

[Anonymous]

You may want to specify things like: if one sibling predeceases mom, does the share go to their heirs (eg spouse/kids) or back to the other siblings, etc.

Putting houses in trust can be helpful to avoid probate.

Put accounts as POD and if she has any retirement funds, make sure one of you is the beneficiary so you can write checks/expenses from it.

We paid 3k for someone to redo my mom's will and trust and that was on the high end (this was a beverly hills attorney, a regular estate attorney for this would probably not cost so much).

If the properties have appreciated a lot, it doesn't necessarily make sense to sell, as she will pay cap gains on the appreciation, whereasa you inherit at step up basis.

Big question is how to divide properties among siblings who do not agree. In my case, my sibling's portion of house goes into a trust that I manage (this is for a lot of reasons) but basically I am on the one who can decide whether to keep renting or selling but sibling's assets belong to them/used for their benefit.

[Anonymous]

Don’t write the will yourself. Hire an estate attorney.