What’s happening with Mom’s money?

One of the questions I get (unfortunately) goes something like this: “my sister has persuaded Mom to put her on the bank account and now I can’t get any information about what’s happening with Mom’s money. Sis is telling Mom not to talk to me about anything. What can I do?”

The answer hinges on whether the elder is competent to make financial decisions — that is, her ability to understand the possible ramifications of a given financial transaction or business arrangement. Lack of competence is not the same as making a decision about which you might disagree. In the case of adding a child to a bank account, competence means whether Mom is able to understand that adding the child to the bank account exposes the funds in that account to the child’s creditors, that Massachusetts law treats the action as making a lifetime gift of an asset that would otherwise go through probate, or that the child could legally walk off with all the money at any time.

If Mom is competent, then there may be nothing which can be done except to spell out to her the ramifications of her action and see if she’ll change her mind. Competent people have the right to make bad decisions. Mom may be afraid of Bad Daughter, but as in any abusive relationship, Mom has to decide for herself if she wants to take the steps needed to detach from the abuser.  Elder Protective Services can provide assistance if Mom wants it; but if Mom is competent does not want their help, they have no legal right to act. Alternately, you might want to hire a geriatric care manager to provide Mom with nonjudgmental professional support, which could in turn help Mom develop the courage she needs to regain control over her funds.

If you believe that Mom isn’t competent, Elder Protective Services may be able intervene. If that is the case, the agency will seek protective orders asking for a competency evaluation and possibly seek to have a conservator (who may or may not be a family member) appointed. If you decide to bring a conservatorship action, and if Mom refuses to go to a doctor for an evaluation of her competency (or Bad Daughter interferes with that effort), then you can ask the judge for an order for an evaluation and another order to freeze Mom’s assets. However, be mindful that this step can inflame existing tensions. You need to decide for yourself if you are willing to live with those consequences.

To find a protective services agency in your Massachusetts community, go to http://contactus.800ageinfo.com/FindAgency.aspx

 

 

A few words about how I help with after-the-last-minute planning

I get called on a not-infrequent basis about what I like to call the “five minutes after midnight” planning crisis. The caller is usually a child of an elder who has already been admitted to a nursing home, whose first words are something like “Dad’s been placed in a nursing home — how do I protect the money for Mom?”

Here’s a little information about the process I follow to answer the question.

Once I get some information on Mom and Dad’s health and a quick outline of their assets (do they have a house? how much money is in the bank? etc.), I’ll set up an appointment and send out a questionnaire and a list of documents I want Mom and the child to bring with them to our first appointment. I hope that by the end of the first appointment, I have a clear picture of the family’s finances, know how legal title to the home is held, and know the couple’s sources of income.

I will let Mom know that the house is safe as long as she is living in it. However, since MassHealth will put a lien on the house in order to be reimbursed for Dad’s care, I usually want to see it transferred into Mom’s name. Not only does this avoid the lien, but Mom may need the proceeds from the sale of the house someday to pay for assisted living or for other purposes. I will also let Mom know that she’s entitled to keep $115,920 as the Community Spouse Resource Allowance, plus the family car and personal effects. Additional assets may be spent down on such things as necessary repairs to the house, prepayment of funeral arrangements, medical expenses, and legal and geriatric care management fees. The excess assets could also potentially be converted into a special type of annuity for Mom which would pass muster with MassHealth, providing her with additional income. I will also assess whether I have enough information to determine if some or all of Dad’s income could be deemed to Mom, so that she has enough (according to government standards) to live on. I will also advise Mom to update her estate plan so that if she should die first, some or all the assets will go into a trust under the will for Dad’s benefit, allowing the children to pay for needs not covered by MassHealth while allowing Dad to remain eligible for public benefits.

So the answer to the child’s question is YES — we probably can protect much, if not all, of Mom and Dad’s assets and give Mom as good a quality of life as possible.

The next question which needs to be addressed will be what are the legally appropriate steps for doing so. For that reason, I want to see Dad’s Durable Power of Attorney (DPOA), because that document will tell me how much work will need to be done in order to preserve funds for Mom. It is common for a DPOA to limit transfers and gifts to other people to an amount equal to the federal gift tax exclusion limit (currently $14,000 per year per person). The DPOA might also not give Mom, if she is Dad’s attorney-in-fact, the power to make gifts to herself. That may be fine in some circumstances, but it won’t work if the goal is to transfer as many of the couple’s assets into Mom’s name as possible as quickly as possible. If the DPOA sets a limit on what can be transferred or doesn’t grant the attorney-in-fact the necessary powers to transfer Dad’s assets to Mom, then I am going to have to advise the attorney-in-fact that she will need to get a judge’s permission to retitle the assets by means of a Petition for a Single Transaction in the Probate Court.

So, it IS possible to do after-the-last-minute planning. However, to do it successfully, you need to work with an elder law attorney who knows the laws and the procedures for doing so.

A different kind of graduation present

Congratulations! It’s graduation season!

Before you get too misty-eyed wondering when your baby turned into the lovely young woman or man standing on stage getting a diploma, you may want to consider a different kind of graduation present for the new graduate.

An estate plan.

The hard, cold reality is that once your child turns 18, you have no legal right to access your child’s medical, financial or academic information unless your child has given you such powers in writing. If your child does not have a Durable Power of Attorney (DPOA), Health Care Proxy (HCP) and HIPAA Release granting such powers over such information, you may have a crisis on your hands if your child becomes seriously injured or incapacitated and cannot care for himself.

If your child is seriously injured or decides to study abroad, you would need a DPOA to make sure that his bank account is managed, the lease on his apartment is cancelled, get access to his mail if he forgets to change his address, deal with his car insurance, control his student loans, and otherwise control all those matters which may require his signature. The DPOA would also allow you to bring suit on your child’s behalf if he is seriously injured in an accident and is unable to direct a lawyer. The DPOA also should give explicit authority to access academic records, so that you can deal with the college or university. Without a DPOA, you will need a conservatorship from the Probate Court to manage an incapacitated child’s affairs, which is never a quick-and-easy process due to procedural requirements and the cutbacks in staff at the courthouses.

The HCP and HIPAA Release grant you access to your child’s health and medical insurance information. This access would be crucial if your child is seriously injured and unable to speak for himself. Without that access, you would be forced to seek temporary  guardianship in the Probate Court. Even though Massachusetts has an after-hours emergency system so that there is always a judge on call, precious time can be wasted while trying to get all the paperwork in place for a temporary guardianship.

And if (God forbid!) your child should die, having a basic will which nominates you as personal representative of his estate and leaves specific direction about to whom he may want to give his possessions.

The cost of a basic estate plan is usually modest, and well worth the peace of mind which it will give you once you drop off your child this fall at his dorm.

Having the talk about end-of-life care

Unfortunately, failing to tell loved ones and physicians what type of care you would want if you suffer from an illness which will eventually lead to your death is all too common an experience. It is important that Massachusetts residents have a Health Care Proxy (HCP), which designates an agent to make medical decisions on behalf of an incapacitated person. However, the HCP is not a substitute for candid conversation. If the health care agent named in the HCP does not actually know one’s wishes — or is not around or available to articulate them — then a person could well receive unwanted aggressive treatment in a medical emergency.

So, there are several things which someone who makes a health care proxy needs to do.

First, you need to provide a copy of the HCP to your primary care provider and to the hospital where you primarily receive treatment. If your primary care doctor is affiliated with a hospital system, the doctor may be able to scan your health care proxy into a central system where it will be visible to all the doctors and hospitals in that system.

Second, you need to talk to your health care agent, alternate health care agent, physicians and family members about your wishes. You may think that your loved ones and doctors know what you might want, but if you are at risk of developing or have developed a serious illness, you need to be candid with those people about your views concerning treating illness or withholding treatment. This is particularly important for people with chronic illnesses, who should have regular conversations as the illness progresses. Remember that people are not mind-readers and that they may have an impression of what you might want based on conversations held years ago, when you may have had different opinions about treatment than you may have now.

Third, Massachusetts residents with late-stage illness should talk to their care provider about MOLST (Medical Orders for Life-Sustaining Treatment).  Unlike a health care proxy, which is a legal document, the MOLST is prepared by the treating physician and patient together and made a part of the medical record. It contains specific information concerning the patient’s desires for how end-of-life care should be managed under different scenarios.  This sounds like a good idea — as long as the paperwork actually follows the patient in either electronic or paper form. It is a good idea for any patient with a MOLST in place to have a copy prominently posted in the house (say, on the refrigerator door) so that EMTs will know not to start CPR or other treatment if you do not want it and provide a copy to your health care agent.