Posts Tagged ‘elder abuse’

Many people make big mistakes titling bank and investment accounts. Often advisors and bankers advise customers to “put your child’s name on the account” or to set the account up as a “pay on death” (or “POD”) account. However well-intentioned the advice, the results of either approach to titling an account can be surprising and unpleasant. Good intentions do not constitute good advice.

The Allure of Joint and POD Accounts

Often, the attraction is probate avoidance. Either a joint account with survivorship features or a POD account will pass as a nonprobate asset and avoid the state-mandated probate process.

With respect to joint accounts, the attraction is often convenience. Unlike a POD account, a joint account holder has immediate co-ownership rights, and, thus, immediate access to the account. An older person may feel better knowing that a trusted son or daughter has immediate access to an account “in case something happens.”

The Dangers of Joint and POD Accounts

If the POD or joint account payee is a child with disabilities, the result could be terrible for the child upon the parent’s death because the receipt of the account could jeopardize continuing qualification for public benefits such as Medicaid or SSI (to the extent those programs are relevant).

There are other compelling reasons why a “joint account” may not be the proper approach:

The co-owner child now owns the account as much as the parent. What if the child is sued? What if the child goes through a messy divorce? Or what if the IRS takes a keen interest in the child’s affairs? Those events happen to the best of children; nevertheless, in those cases the joint account will be deemed to be owned by the child.

Another problem is that the co-owner/child’s siblings may be “out of luck.” This happens all the time. For example, Mom wanted the kids to share equally, but after Mom is gone Sis suddenly “recalls” that Mom wanted her to have the accounts since she “was the one who always helped Mom.” Because Sis was a co-owner of Mom’s accounts and likely had “survivorship” rights, she owns the accounts now – and there is nothing an attorney can do about it.

A Better Way

If the goal is asset management in the event the owner becomes incapacitated, the best approach is a properly drafted power of attorney.

A “power of attorney” has nothing to do with appointing lawyers. The word “attorney” has its roots in an old French Norman word for “legal substitute”. A “power of attorney” is simply a document signed by someone called the “principal” appointing an “attorney-in-fact” or “agent” to manage some or all of the principal’s financial and business affairs.

The terms of the power of attorney control what the agent may, or may not, do. If the document covers a broad spectrum of duties, then it is a “general” power of attorney. An agent can be given very broad powers, and if that makes the principal nervous the instrument can require the agent to secure some other person’s permission.

It used to be that a power of attorney would lapse when the principal became incapacitated. That did not do any good if what was intended was to cover the situations when the principal did become incapacitated. The law stepped in and provided that a power of attorney could be “durable” (or be valid after the incapacity of the principal). Most powers of attorney now are “durable”.

If the goal is to avoid probate upon the death of the account owner, the likely better approach is a revocable (or living) trust. The assets in the trust will avoid probate. In fact, a revocable trust can also assist in post-incapacity management because a successor trustee named in the trust agreement can step in to handle continuing asset management. The assets in the trust are also protected from the trustee’s personal liabilities (in other words, the trust assets are not exposed to the trustee’s own problems with creditors).

Finally, all of the above considerations especially apply if there is a child with disabilities. There will rarely, if ever, be an appropriate time to name a child with disabilities as the co-owner of a joint account or the beneficiary of a POD account. Carefully consider a special needs trust, either under a will or as buy clomid online part of a revocable trust, to hold that child’s intended inheritance. Properly drafted, the special needs trust assets will not jeopardize the child’s continuing eligibility for various public benefits.

Here’s the point: Do not put the kids on the accounts as a joint owner. Instead, execute a power of attorney that grants the sorts of powers to the kids you are comfortable with to take over business affairs when, and if, they need to. Alternatively, consider a revocable trust. In the meantime, keep the accounts in your name.

The downside to the advice given here: Some fees to a lawyer. There is, however, an upside: You may avoid a train wreck.

Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country.  Bob Mason is its legal columnist.

Many people make big mistakes titling bank and investment accounts. Often advisors and bankers are the source of the advice to “put your child’s name on the account”. However, the results of jointly holding an account with another can be surprising and unpleasant.

The advice has likely been given with the best of intentions – which does not make it correct. The reason is usually convenience. An older person may feel better knowing that a trusted son or daughter has immediate access to an account “in case something happens”.

A better way to provide emergency access to financial holdings for a trusted person exists. Read on. First, here is why a “joint account” may not be the proper approach:

• Mom has likely made daughter a co-owner of the account. Daughter now owns the account as much as Mom. Could be bad. What if daughter is sued? What if daughter gets into a messy divorce? Or the IRS takes a keen interest in her affairs?
• If Mom dies Sis’s two brothers may be out of luck. Happens all the time. Mom wanted the kids to share equally, but Sis suddenly recalls Mom wanted her to have the accounts since she “was the one who always helped Mom”. Since Sis was a co-owner and likely had “survivorship” rights, she owns the account now – and there is nothing an attorney can do about it.

• Yech.

What is the best approach? A properly drafted power of attorney.

A “power of attorney” has nothing to do with appointing lawyers. The word “attorney” has its roots in an old French Norman word for “legal substitute”. A “power of attorney” is simply a document signed by someone called the “principal” (that is, YOU) appointing an “attorney-in-fact” or “agent” to manage some or all of the principal’s financial and business affairs.

The terms of the power of attorney control what the agent may, or may not, do. If the document covers a broad spectrum of duties, then it is a “general” power of attorney. An Agent can be given very broad powers, and if that makes the Principal nervous the instrument can require the Agent to secure some other person’s permission.

It used to be that a power of attorney would lapse when the Principal became incapacitated. That did not do any good if what was intended was to cover the situations when the principal did become incapacitated. The law stepped in and provided that a power of attorney could be “durable” (or be valid after the incapacity of the principal). Most powers of attorney now are “durable”.

Here’s the point: Don’t put the kids on the accounts as a joint owner. Instead, execute a power of attorney that grants the sorts of powers to the kids you are comfortable with to take over business affairs when, and if, they need to. In the meantime, keep the accounts in your name.

Downside: Some fees to a lawyer. Upside: Avoid a train wreck.

Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country.  Bob Mason is its legal columnist.

Here is yet another use for duct tape: Keeping an older resident from becoming such a bother. That is actually what an area nursing home did several years ago to keep a demented and unruly resident from getting underfoot. There was more we won’t get into here.

At the time, the only recourse was a misdemeanor charge. The investigation was not handled well by un-trained investigators. The only solid witness died. All the bad guys “walked”.

Chatham County senior advocates sprang to action. Adult Protective Services, the Long Term Care Ombudsman, Senior Citizens, Inc. (and perhaps others) went to then-District Attorney Spencer Lawton. He was appalled.

Soon the Chatham County Commission got on board and funded a dedicated position at the Chatham County DA’s office to investigate and prosecute elder abuse cases. Lawton assigned Assistant District Attorney Meg Heap to the position. After a period of re-tooling at the National College of District Attorneys, she went into action.

I have had an opportunity to work with Heap, and I am impressed with the operation. I practice in another state and have had to beg prosecutors busy with “Big Crimes” to glance at elder abuse cases.

I was surprised when the Savannah-Chatham police began investigating the caregiver of a client of mine who . . . well . . . began to care a bit too deeply about my client’s finances. My surprise gave way to utter amazement when I received a telephone call from Meg Heap looking for additional information. “What! A prosecutor!?”

Soon a senior trial lawyer in the office was involved. Impressive experts were summoned. I couldn’t believe it.

I used to say that one of the few examples of good government was the United States Marine Corps. I’ll add the Elder Abuse Prosecutions Office of the acomplia buy Chatham County District Attorney. Chatham County voters should make sure that both District Attorney Larry Chisholm and the Chatham County Commission know how valuable this program is. As things stand now, my hat is off to them all.

Government budgets are tight. But as finances tighten up for everyone, the less savory in our lot will be tempted to “go for the easy pickin’s”. The concentration of wealth in the hands of seniors is staggering. A clever caregiver who provides companionship to a lonely or ignored senior can easily strip the finances away. Most police, used to dealing with “real bad guys”, do not have the training an expertise to deal with financial abuse. Training is needed and government can do more. We’re talking citizen protection (not to mention a few additional police officers stimulating the economy). There is law enforcement money in the Great Stimulus Bill of 2009 . . . I hope some of it filters down to the coast.

In the meantime, families, stay involved. Be alert. Use common sense. If you suspect elder abuse (physical or financial) call the police, Adult Protective Services (912- 651-2216) or Meg Heap at the Chatham County DA’s Office (912-652-7308).