You and the Law: Planning for the expected unexpected
By: By H. Dennis Beaver - August 01, 2017
My father died recently with no will or trust, and we are just going crazy trying to locate deeds to property, insurance policies, bank accounts and so on. We urged him to address these issues when he was first diagnosed with aggressive prostate cancer, however, being very old-fashioned Chinese, talking of death is taboo.
“We miss him so badly, but we are angry at him and yet feel guilty because we feel this way. You could do a public service by writing about the need to plan so that your loved ones are not left in such a horrible situation. Thank you, Helen Chang.”We ran Helen’s question by Boca Raton-based Elder Law attorney Howard Krooks, past president of the National Academy of Elder Law Attorneys, who practices in New York and Florida.
“Dennis, your reader beautifully stated the way so many families in this situation feel. Generally speaking, it is true that people do not like to talk about illness, loss of independence and death. When it comes to doing the things which will reduce the headaches for family members, people fall into one of five categories:
“1. A failure to do anything. Some people think about, are urged by spouse and children to do something but still fail to plan or take action.
“2. Some people don’t even think about planning. They’re living their lives and it just doesn’t occur to them to plan for what will happen when they are no longer here.
“3. A third group, is aware of the need to do something, but are not sure what. Surprisingly, they do not consult with an estate planning attorney to talk about goals or objectives and to find out what it would take to implement their plan.
“4. Some people go so far as to meet with a lawyer, find out what they can do and yet still choose not to go forward. This is frustrating to their family, and the lawyer who can see where things will wind up.”
Finally, Krooks has praise for “the doers, the people who find out what they can do and set their plan into action. The benefit of a well thought-out estate plan — making life for heirs easier and more seamless when the individual is no longer here — is the greatest gift of all to their loved ones.”
You can just picture Helen’s family trying to make sense of dad’s financial life, searching for bank statements, deeds, safe deposit keys, all the result of his failure to organize and have the family’s financial records accessible. A loving memory has been tarnished.
Failure to organize financial affairs creates obstacles for the next of kin
I don’t think that a week goes by without a reader emailing, “My husband took care of everything. I don’t know what we own or what bills to pay. What should I do now?”
That happens, Krooks observes, “when there is a failure to organize your financial affairs. In one accessible place you need:
“A list of all assets, including insurance, real estate, Social Security, IRA, bank and financial institutions. Where were the accounts opened? What branch? If you own shares of stock, where are they physically located, where are they held?”
By not taking the time to do this, Krooks warns, “this creates obstacles for the next of kin. If you become incapacitated or die, it becomes extraordinarily difficult to put the pieces of a person’s financial life back together. And don’t forget digital assets, such as user names and passwords,” he underscores.
“The ability to access account information must be available. Today, many financial accounts are paperless, and without a password, significant assets could be overlooked. You also will need to shut down social media. So, all of this is part of document and financial affairs organizing making it easier for your next of kin.”
WHAT IS THE GREATEST THREAT TO AN AGING POPULATION WHO HAS ACQUIRED SOME ASSETS?
Krooks cites fraud and financial elder abuse as “the greatest threat to our aging population. And it can come from anyone, but often there are three storylines. In the first, an adult child falls upon hard times, moves in with mom or dad, begins managing and spending down their finances, leaving nothing.
“In the second, the kids are out of state and a caregiver is hired, quickly becoming the new best friend. This becomes a relationship where the caregiver isn’t just paid for their services, but given even more money, out of the elderly and vulnerable person’s fear of losing them.”
Finally, Krooks describes the “new boy or girlfriend who moves in, taking care of your loved one and then money is leaving the account in large chunks.”
Dennis Beaver practices law in Bakersfield and welcomes comments and questions from readers, which may be faxed to 661-323-7993, or emailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.
** Disclaimer Required by IRS Circular 230** Unless otherwise expressly approved in advance by the undersigned, any discussion of federal tax matters herein is not intended and cannot be used 1) to avoid penalties under the Federal tax laws, or 2) to promote, market or recommend to another party any transaction or tax-related matter addressed.