Meddling in parent's finances.

[The Captain]

Jul 6, 2015 17:00:36 GMT -5 @southernsusana said:

Finra has a broker check. It lists disclosures as well as their previous employers. It won't solve your problem, but it will give you a little information on the "advisor."   Here is the link 

You don't need all the information the blocks ask for.  Name and 25 miles from my zip got me the info on my last guy.

Thanks.  Found him.  Interesting to note he never spent more than three years with the same employer.

He does have his series 7 license though.  Better than a 6 I guess.

[ArchietheDragon]

Jul 7, 2015 9:01:22 GMT -5 The Captain said:

Jul 7, 2015 8:52:07 GMT -5 ArchietheDragon said:

Dad doesn't need the money. he is only interested in growing it to be able to leave more to his heirs.


IMHO, evaluate his options, since he is asking. Give him your opinion. Then let him make up his own mind, unless he is getting involved in something illegal or an out and out scam. What is doing more going to accomplish? make dad feel bad and line your own pockets. not worth it to me.

We don't give a damn about our pockets.  We do want to make sure the principal is there for long term care if he needs it.

The county nursing homes suck in his area.  He's had a knee replaced once and may need to have it replaced again.  In home care and physical therapy is expensive.  I know the rules were changed recently but it used to be physical therapy was only covered by medicare if there was improvement in a condition, not maintenance of a current state.

He worked a pretty physical job all his life.  It will not be a surprise if he needs to have the other knee replaced.  It would kill him if he had to go on Medicaid.  That is what we are trying to avoid.

To be honest, I'm not sure how all of this works.  Need to find out more.

I hear you.    Just be sure you don't do more harm  by trying to do good, that's all. 

[Ombud]

Why don't you involve him in picking the CDs? Mom loved it. We'd sit at her computer and I'd put in a screen that would limit her choices to 6. Then she'd buy 1 of the 6. Left her in charge .... proud that she did it 'herself'

[Ombud]

@southernsusana, thanks for the link. Found my guy. Outside of 3 one month stints, he seems fine. Has series 7, 9, 10, 63, 66 no series 6. What's series 6?

[NancysSummerSip]

Besides, how do you even breach such a topic with a man who's always taken great pride in his independence and taking care of his family? I think that would be as hard on my Dad as would be telling him it's time to give up his driving license (a conversation I am NOT looking forward to).

Ouch. Been there, had to do that. AND take the car away. But better me  (or you, in your case with your dad) than the courts doing it.

[Deleted]

Series 6 is the "limited-securities license." They can sell prepackaged securities like mutual funds. Series 7 is the "general securities representative license."    They can sell all securities.

I don't claim I knew this before I looked it up. Here's the link for more information. 

[Abby Normal]

My mom is not financially savvy.  Back when I was in college, she used to ask my  older sister- who gave really bad advice.  She finally started asking me my opinion- which was very opposite of my sisters.  It took a while for her to realize that my sisters advice was not always to her benefit.  Unfortunately, a lot of damage was done in the meantime, which meant a few rough years for my mom. 

[HoneyBBQ]

Jul 6, 2015 16:10:49 GMT -5 cronewitch said:

I am the same way no pensions but more than I want to spend. I am giving away the excess pretty quickly. Last week I gave my niece 16K because she is buying a condo and filing bankruptcy. She needs to spend the money from selling her old house before the year is up in August so has 100K and no credit found a condo listed 110K her parents were going to take from retirement paying tax to lend her money she can't afford to pay payments on. So I gave her 14K then the condo price went up to 117 so I gave her 2 more. So she is only a thousand and closing cost from having enough to pay cash for a condo. I have over a million left I don't plan to spend it all so giving her now or 25-30 years from now. She will still have condo fees but car paid off and paid off condo she should be able to live on her wages even with babysitters and everything. Her ex is several months behind in support so if he pays up she will have a little wiggle room.

Crone, is this wise?

[Bonny]

Jul 7, 2015 8:38:26 GMT -5 The Captain said:

Jul 6, 2015 16:50:54 GMT -5 Bonny said:

The Captain,

Why don't you have financial POA? I have them for both my MIL and father. It makes things a lot easier.

And a bond fund could be a good option for your father if he doesn't want to invest in stocks.

If I understand it correctly (and as always, please let me know if I'm wrong) a financial POA will give us the ability to act on financial matters on his behalf.  It does not prevent him from acting on his own behalf.
 

Sissy and I do absolutely everything we can to make sure everything is on the up and up and there can be even no hint of impropriety.  Let's just say financial POA could throw some gas on a fire we'd prefer not to light.

Besides, how do you even breach such a topic with a man who's always taken great pride in his independence and taking care of his family?  I think that would be as hard on my Dad as would be telling him it's time to give up his driving license (a conversation I am NOT looking forward to).

Sigh.  You're probably right.  Maybe I should discuss it with Sissy and talk to Dad about it.

You'll find this laughable but MIL actually asked us to be the financial POAs about 2 years ago. She knew she was not right in the head and could not process anything that took time to explain. She's much better now and occasionally comments that DH has "too much control" but I know she likes it when we ask her about large transfers out of her account. She spends too much time reading the local paper and all the elder abuse stories.

I needed financial POA to deal with my father's retirement and Medicaid issues. As usual he mucked up the first go-around by adding additional language. I pointed out to him that his additional language might get him in trouble with Medicaid. I got a little flack until I pointed out that if something horrible happened to him I might need to sign on his behalf to clear a potential cloud on his girlfriend's home. I should point out that in CA one MUST have a specific POA to engage in any real estate transactions. Therefore one must specifically sign off on that "power".

In your situation, I would use the bank rep contact as the catalyst for the POAs. Just say "Dad, I'm concerned about how these guys target older folks and I think it would be a good idea for you to have them contact me directly. Giving Sissy and me a financial POA gives me the authority to act on your behalf"... or something like that.

Do you have other siblings? They should be kept in the communication loop so they know the reason behind taking this step. Of course if the situation is like my father and brother (they don't speak to each other) that's one person who doesn't have to be involved.

[cronewitch]

Jul 7, 2015 10:10:31 GMT -5 HoneyBBQ said:

Jul 6, 2015 16:10:49 GMT -5 cronewitch said:

I am the same way no pensions but more than I want to spend. I am giving away the excess pretty quickly. Last week I gave my niece 16K because she is buying a condo and filing bankruptcy. She needs to spend the money from selling her old house before the year is up in August so has 100K and no credit found a condo listed 110K her parents were going to take from retirement paying tax to lend her money she can't afford to pay payments on. So I gave her 14K then the condo price went up to 117 so I gave her 2 more. So she is only a thousand and closing cost from having enough to pay cash for a condo. I have over a million left I don't plan to spend it all so giving her now or 25-30 years from now. She will still have condo fees but car paid off and paid off condo she should be able to live on her wages even with babysitters and everything. Her ex is several months behind in support so if he pays up she will have a little wiggle room.

Crone, is this wise?

Yes, she sold her old house and moved in with her parents. Her ex owes a fortune in his mortgage and business loans from when they were married, community property state. She put the house money in escrow so in bankruptcy it is considered like keeping your house if you use it to buy a new one within the year. So if she doesn't buy she loses the 100K to his creditor. Borrowing from her parents would keep her broke paying them back. She earns $15.06 so can afford to pay condo fees and buy food, car is paid off but even a small loan payment would be really hard. Her parents watch her daughter a couple of days a week but a babysitter is $10 a hour. She thinks in the new condo she can try leaving her home alone for an hour or so can save of after school care. The daughter has down syndrome but is 16 so the skills of a younger child. When/if the ex pays the support he is behind or starts paying again she will have plenty of money. She will apply for SSI for her daughter and next spring take the ex back court to try to get support for DD as an adult. Things should look up for her now she doesn't have his creditors after her. I know they were her loans too but she can't pay enough to make a dent.

[The Captain]

Jul 7, 2015 10:20:57 GMT -5 Bonny said:

Jul 7, 2015 8:38:26 GMT -5 The Captain said:

You'll find this laughable but MIL actually asked us to be the financial POAs about 2 years ago. She knew she was not right in the head and could not process anything that took time to explain. She's much better now and occasionally comments that DH has "too much control" but I know she likes it when we ask her about large transfers out of her account. She spends too much time reading the local paper and all the elder abuse stories.

I needed financial POA to deal with my father's retirement and Medicaid issues. As usual he mucked up the first go-around by adding additional language. I pointed out to him that his additional language might get him in trouble with Medicaid. I got a little flack until I pointed out that if something horrible happened to him I might need to sign on his behalf to clear a potential cloud on his girlfriend's home. I should point out that in CA one MUST have a specific POA to engage in any real estate transactions. Therefore one must specifically sign off on that "power".

In your situation, I would use the bank rep contact as the catalyst for the POAs. Just say "Dad, I'm concerned about how these guys target older folks and I think it would be a good idea for you to have them contact me directly. Giving Sissy and me a financial POA gives me the authority to act on your behalf"... or something like that.

Do you have other siblings? They should be kept in the communication loop so they know the reason behind taking this step. Of course if the situation is like my father and brother (they don't speak to each other) that's one person who doesn't have to be involved.

Ding, Ding, Ding!!! We have a winner. Sissy and I made deathbed promises to my mom that we will keep. They weren't fair, but that's besides the point. It's so freaking complicated I can't even begin to cover it.

Remember, we are NOT talking about a whole lot by YM standards so I really do want to keep it simple.  I know I've posted on here before about the bullshit I had to handle with my uncle when my grandmother died (thank GOD mom kept good records) and I do not want a repeat of that with my brother.

The suggestion about the POA catalyst is a good one, I'll have to use that.

[Bonny]

Jul 7, 2015 10:34:40 GMT -5 The Captain said:

Jul 7, 2015 10:20:57 GMT -5 Bonny said:

You'll find this laughable but MIL actually asked us to be the financial POAs about 2 years ago. She knew she was not right in the head and could not process anything that took time to explain. She's much better now and occasionally comments that DH has "too much control" but I know she likes it when we ask her about large transfers out of her account. She spends too much time reading the local paper and all the elder abuse stories.

I needed financial POA to deal with my father's retirement and Medicaid issues. As usual he mucked up the first go-around by adding additional language. I pointed out to him that his additional language might get him in trouble with Medicaid. I got a little flack until I pointed out that if something horrible happened to him I might need to sign on his behalf to clear a potential cloud on his girlfriend's home. I should point out that in CA one MUST have a specific POA to engage in any real estate transactions. Therefore one must specifically sign off on that "power".

In your situation, I would use the bank rep contact as the catalyst for the POAs. Just say "Dad, I'm concerned about how these guys target older folks and I think it would be a good idea for you to have them contact me directly. Giving Sissy and me a financial POA gives me the authority to act on your behalf"... or something like that.

Do you have other siblings? They should be kept in the communication loop so they know the reason behind taking this step. Of course if the situation is like my father and brother (they don't speak to each other) that's one person who doesn't have to be involved.

Ding, Ding, Ding!!! We have a winner. Sissy and I made deathbed promises to my mom that we will keep. They weren't fair, but that's besides the point. It's so freaking complicated I can't even begin to cover it.

Remember, we are NOT talking about a whole lot by YM standards so I really do want to keep it simple.  I know I've posted on here before about the bullshit I had to handle with my uncle when my grandmother died (thank GOD mom kept good records) and I do not want a repeat of that with my brother.

The suggestion about the POA catalyst is a good one, I'll have to use that.

Well Dad has specifically disclaimed Bro in his will. It's somewhat ironic because Dad has < $2000 to his name. He and Mom filed BK 20 years ago and he never financially recovered from it.

The POA can potentially help protect the girlfriend if something happens to him and he needs to go into assisted care. He has a life estate in her home and we would want to clean up title in order for her to sell the house. Otherwise I can see the situation turning into a full blown cluster f*ck needing a competency hearing, awarding conservatorship et cetera.

[Gardening Grandma]

Jul 6, 2015 16:38:26 GMT -5 The Walk of the Penguin Mich said:

I have over a million left I don't plan to spend it all so giving her now or 25-30 years from now.


Crone.....please don't think like this.  It doesn't take much of a medical problem to run up some pretty substantial bills.  Just because you don't plan to spend it doesn't mean that Murphy won't piss in your Wheaties and muck things up.

$1 million could go a hell of a long way if you do something like break a hip and need to be in rehab for a couple months.  At $300/day (yes, this is in Seattle), the costs add up fast.

You have a generous heart, but that $1M could rapidly decrease in a market correction. And as Mitch pointed out, an extended rehab  could wipe you out. Keep the oxygen mask on yourself before you try to help others. (There is also the risk of relatives thinking "Crone is loaded. Let's ask her")

[The Captain]

Huh.  The broker called me back.

Now remember folks, I too am an unsophisticated investor.  I've asked the broker to send me the brochures/prospectuses on the products he was pitching to my Dad.

I have no idea what an index annuity is, but he claims the principal in guaranteed, you can take early distributions for medical events, and that the average rate of return has been 5-6% for the past several years. He also claims there is no front load charge.

We'll see.

 

[justme]

Sounds like it might be tied to bonds funds. I think they're making in that neighborhood currently. Though your principal is not guaranteed, if the company folded you'd be sol.

[The Captain]

Yea justme, it's the whole guaranteed principal thing that has me scratching my head.  Which is why I need to see stuff in writing.

[973beachbum]

Jul 7, 2015 9:09:27 GMT -5 The Captain said:

Jul 6, 2015 17:00:36 GMT -5 @southernsusana said:

Finra has a broker check. It lists disclosures as well as their previous employers. It won't solve your problem, but it will give you a little information on the "advisor."   Here is the link 

You don't need all the information the blocks ask for.  Name and 25 miles from my zip got me the info on my last guy.

Thanks.  Found him.  Interesting to note he never spent more than three years with the same employer.

He does have his series 7 license though.  Better than a 6 I guess.

It doesn't matter.  An Index Annuity isn't a security.  It is an insurance product. I would tell you to research his insurance license but personally I hate annuties.   Here is a link from Fidelity which obviously has a dog in this fight but most here like their investments.

What is an indexed annuity?

An indexed annuity is a contract issued and guaranteed1 by an insurance company. You invest an amount of money (premium) in return for protection against down markets, the potential for some investment growth, which is linked to an index (e.g., the S&P 500® Index), and in some cases a guaranteed level of lifetime income through optional riders...


Know what you’re buying
An annuity is only as good as the insurance company’s ability to honor its commitment to you, so be sure to review the financial strength of the insurance company.

Because indexed annuities are not considered securities, they are not regulated by the Securities and Exchange Commission (SEC) or by the Financial Industry Regulatory Authority (FINRA). However, they are regulated by state insurance departments.

The insurance company controls your upside. By imposing caps, participation rates, and spreads, it can reduce your return potential.

You pay an opportunity cost by sacrificing some of your return, and you may pay hefty surrender charges if you take your money out too soon.

www.fidelity.com/viewpoints/retirement/considering-indexed-annuities

[The Captain]

Jul 8, 2015 16:05:05 GMT -5 973beachbum said:

Jul 7, 2015 9:09:27 GMT -5 The Captain said:

What is an indexed annuity?

An indexed annuity is a contract issued and guaranteed1 by an insurance company. You invest an amount of money (premium) in return for protection against down markets, the potential for some investment growth, which is linked to an index (e.g., the S&P 500® Index), and in some cases a guaranteed level of lifetime income through optional riders...


Know what you’re buying
An annuity is only as good as the insurance company’s ability to honor its commitment to you, so be sure to review the financial strength of the insurance company.

Because indexed annuities are not considered securities, they are not regulated by the Securities and Exchange Commission (SEC) or by the Financial Industry Regulatory Authority (FINRA). However, they are regulated by state insurance departments.

The insurance company controls your upside. By imposing caps, participation rates, and spreads, it can reduce your return potential.

You pay an opportunity cost by sacrificing some of your return, and you may pay hefty surrender charges if you take your money out too soon.

www.fidelity.com/viewpoints/retirement/considering-indexed-annuities

Ahhh, good information 973beachbum!  I may not know a lot about investments, but I do know a thing or two about checking out the financial strength of insurance companies!

Something a lot of folks don't realize is that the insurance industry basically insures itself.  If a company goes belly up, it goes into supervision by the commission of insurance - who then pays out excess claims from a state guarantee fund.  All insurance companies authorized to write business in the state are then charged a guarantee fund assessment in order to keep this pool of money liquid.

It's one of the main reasons so many industry insiders were majorly pissed when some of AON's insurance operations went under.  They'd been grabbing business and undercutting rates for years (not sustainable) and when the predictable happened, their competitors had to cover their contracts.

[shanendoah]

DPOA is actually much safer, from a legal standpoint, than being on the account. As a POA (D or otherwise), everything you do in the person's name must be documented that it was done by the POA, not the person themself. It also creates a legal responsibility for the POA to act in the best interest of the primary.
Right now, you and sis are each on Dad's bank account. Either one of you could completely empty his account, and there would be no documentation of it (and none required) because it was done by one of the account holders. There is also no legal action that could be taken against the person who did it, because by being named joint on the account, they are being named as someone who has legal right to any and all holdings in that account.

We had this conversation with my father, who is a Private Investigator and used to be a Veterans' Benefits Counselor (so lots of experience working with the elderly and their families around money, benefits, etc) before we decided on the DPOA for MIL. She happily would have just added us to all of her accounts. So while we did not foresee any issues with MIL's sister claiming we did not act in her best interest, it was the safest thing for us to do, legally. It also allowed us to sign paperwork for her (after her stroke, her handwriting was terrible and she hated signing. I always printed her name, signed mine, and then wrote DPOA afterwards), and generally handle financial issues in general.
It did all of this without taking away her legal capability to sign a contract, make financial decisions, etc.


Here is how I suggest you talk to your father about financial DPOA.
Dad, Sis and I started talking after our last financial conversation with you, and we realized that things are not maybe set up in the best way that they could be. While we would both rather you spend all of your money on you, we understand (and love) that you want to leave money to us. And while we don't anticipate any problems, we've all seen it happen, too many times, when money has caused a major problem in the family.
Because of that, we think that maybe you should remove us both from your bank account, and instead we should do a joint financial DPOA. This gives us the exact same access to your account as before, but it means everything we do on your behalf will be documented, protecting everyone involved. Plus, if you do get sick, the DPOA will allow us to help you out, run errands, carry out your wishes, even if you are stuck in bed for a while.
The DPOA doesn't take away anything from you. It simply gives Sis and I added legal protection if and when we deal with financial issues on your behalf.


EDITED TO ADD: I somehow missed reading the whole second page before I wrote this. DPOA protects you and Sis from spurious lawsuits by Bro, claiming you simply took money from Dad, etc. Given you have a family situation where it seems conceivable that someone might sue, the more legal protections the better.
At this point I will also add, my information came from my father who, while working with a lot of elder law, is not a legal professional. The information was also given to us 7-8 years ago. You might want to talk with your family lawyer or a local elder law specialist to confirm that the DPOA is actually a better legal protection for everyone involved.

[Robert not Bobby]

"I will also (politely) make sure he knows Dad has a bulldog for a daughter who will hunt him down and get his license revoked if he tries to sell any investments that are not appropriate.

However, I am grateful Dad still checks with sissy and I before doing anything. This stuff sucks. "


Your dad is blessed to have you and your sister as daughters...stick to your proverbial "guns"...determination to see that the wrong thing doesn't happen.

There are so many snake oil salesmen and flim flam artists trying to take advantage of the vulnerable. Stay vigilant...

[Gardening Grandma]

shanendoah,
That is a very informative post. Can you elaborate on the difference between DPOA and POA please?

[beergut]

Jul 8, 2015 14:16:20 GMT -5 The Captain said:

Huh.  The broker called me back.

Now remember folks, I too am an unsophisticated investor.  I've asked the broker to send me the brochures/prospectuses on the products he was pitching to my Dad.

I have no idea what an index annuity is, but he claims the principal in guaranteed, you can take early distributions for medical events, and that the average rate of return has been 5-6% for the past several years. He also claims there is no front load charge.

We'll see.

 

Did he say it is a fixed indexed annuity? If it is a fixed indexed annuity, he doesn't need a series 6 or 7 license, he simply needs to be licensed in Illinois to sell life insurance and fixed income products. 

You know that a fixed annuity is simply a contact where the client pays the insurance company a set amount (either in monthly premiums over a period of time or one single lump sum, i.e. single premium annuity), and the insurance company agrees to pay a fixed rate of interest on that amount annually. The client then receives the money in monthly payments when the contract annuitizes, and the money is distributed back to him. Advantage of fixed annuities is that you never lose any money and you receive interest on your money, disadvantage is your money is tied up for a long time, and your interest rate is usually a low one. 

Fixed annuities are very conservative, so definitely not appropriate for everyone.

Variable annuities are contracts that take the premiums and invest them in an underlying security. Advantages are that you can make a lot more than you would in a fixed annuity and you have more diverse investment options in the product, disadvantage is that you can lose money. Variable annuities often have a fixed account option which can give you a decent rate of return. There are some older variable annuity products that have fixed account guaranteeing 4.5%, which a lot of people would be thrilled to get right now.

Variable products have some risk, and are definitely not appropriate for everyone, especially people already retired or about to retire. 

Fixed indexed annuities are closer to fixed annuities than variable annuities. They will often have a three or four options in the product. One will usually be a fixed account option which gives you a set percentage on your money, just like a fixed annuity. The other options are usually tied in some way to an index, usually the S&P 500 or the Dow Jones. 

The selling point is that you have an opportunity to earn more in interest than you would in a fixed annuity because you are tied to an investment index, and can therefore ride the growth of the stock market. The thing they don't really hammer home, though, is that there is usually a cap rate on how much you can earn. Let's say you're fixed indexed annuity is tied to the S&P 500, which we know returns an average of 11% annually thanks to phil5185. Your cap on the annual growth may only be 5%, meaning you miss out on the other 6%. 

The big thing to look at is how they are calculating growth. It will usually be either point-to-point, or a monthly average. If it is point-to-point, the starting point is your effective date (first day your annuity goes 'live'), and the ending point is the one year anniversary of that date. They'll look at the change in the index from the first day to the 365th day, and credit the account the growth up to the capped amount. 

If it is monthly average, they'll take the index amount on the effective date, and look at the index every month on the same day thereafter, add them all together on the one-year anniversary date, divide by 12, and there is your average. You are credited the average growth up to the cap rate. 

Now, regardless of whether it is point-to-point or monthly average, if the S&P 500 (or whatever index it is tied to) experiences a loss , you don't lose any money. Even better, after they credit the account with the annual growth, that becomes the new starting point for the principal, so as long as the index keeps going up, your annuity is always growing. 


It is pretty common for annuity products now to allow you to take an annual distribution of a principal amount, usually up to 10%, without any penalty. Saying your father can take it out for medical expenses is no different. 

Fixed annuities are generally conservative, and definitely not appropriate for everyone. The only time they would be appropriate for someone who is retired is if they were incredibly worried about running out of money in retirement AND they have a family history of living a long time. If you're 65 and everyone in your family lives to be 100, this might conceivably be a decent option for you. If you're not going to make it to the annuitization date, though, there is no point in getting it. The only other time this would be appropriate is if you want to set up estate planning using an annuity. 

What phil5185 and others are referring to are immediate annuities, where you give the insurance company a lump sum of money, and they begin paying out distributions within one month to one year's time. When someone wins the lottery and takes the option of 30 year payouts (has anyone ever refused the cash option?), that is an easy example of an immediate annuity. There are VERY, VERY few instances where an immediate annuity is appropriate for anyone. 

[shanendoah]

Gardening Grandma - With a note that these might be different for different states, and this was WA state in 2008 when we did all the research, though NV was very similar to this in 2000, when we had to have a guardianship declared because C didn't have a POA for MIL, and MIL was incapacitated for a significant and (at the time he started guardianship proceedings) unknown amount of time.

A standard POA only kicks in when you are incapacitated and unable to make decisions on your own. The moment you become capable of making decisions on your own again (mental capacity wise), the POA is no longer active. That means that your POA (medical, financial, real estate, etc) means nothing when the person is mentally capable, even if they aren't currently physically capable - so if they're in a facility for rehab after a surgery, or on bed rest due to the flu. Mentally, they are fine, and so a traditional POA is not in effect.

A DPOA, or Durable POA, gives the person with POA powers even when the primary is fully mentally capable of making decisions. It's basically like signing one document that adds your POA to all of your financial accounts. (As far as I know, there is no DPOA for medical, only for financial and similar.) This allows the person who holds the POA to sign for the primary or make financial decisions on their behalf even when the person is fully mentally capable. That means that if they have the flu, are in the hospital, etc, the person holding POA can run around and take care of anything that needs to be taken care of.
The primary is still fully capable of entering into contracts, making financial decisions, etc on their own, but the person holding POA then has access to all of those accounts and can also make decisions for them. Again, in a sense, it is a single piece of paper that gives the POA holder (or holders - C and I had a joint DPOA for MIL) joint access to every account the primary has.
At the same time, when something is done by the POA holder, it has to be documented as such. Again, on documents, I would print MIL's name, sign my own, and then write DPOA afterwards. This is because anytime you have POA (durable or otherwise) you have a legal obligation to act in accordance with the wishes of the primary or in their best interest, so there is a legal transparency that needs to go with that.

DPOA was the best choice with us because otherwise we would have had to file for a guardianship of MIL, or let her end up living on the streets, even though she actually had more than enough money. And while MIL was really not fully mentally capable after her accident, she wasn't in the throws of dementia or anything like that, so getting her declared incompetent in order to get the guardianship would have just been a cruel act. As it was, she was more than willing to let C and I take over the managing of her finances.

[NastyWoman]

shanendoah if I read your information correctly, a DPOA would also protect the assets of one party to the DPOA if the other party gets sued, since the funds (or whatever is covered) never are owned by the one that is sued.  (I hope you can figure out what I am trying to say). So for instance if I were to appoint DS2 as my DPOA and he has an accident and gets sued the party suing him can't take my assets into account for his/her claim.  Can you confirm that?

[shanendoah]

NastyWoman - again, I am NOT a lawyer, so it would never hurt to double check this with a lawyer, but as I understand it, you are correct.

If X has a bank account and adds Y to it, then if Y gets sued, the funds in the account are considered in the suit, because Y has a legal right to all the funds in the account and can use them for any reason, and so they become subject to the suit.
If X has a bank account and appoints Y DPOA/POA, then if Y gets sued, those funds are NOT considered in the suit because they are not Y's property. Y has no legal right to those funds for own use. They can only be used on behalf of X.

[Deleted]

Jul 10, 2015 11:42:11 GMT -5 shanendoah said:

Gardening Grandma - With a note that these might be different for different states, and this was WA state in 2008 when we did all the research, though NV was very similar to this in 2000, when we had to have a guardianship declared because C didn't have a POA for MIL, and MIL was incapacitated for a significant and (at the time he started guardianship proceedings) unknown amount of time.

A standard POA only kicks in when you are incapacitated and unable to make decisions on your own. The moment you become capable of making decisions on your own again (mental capacity wise), the POA is no longer active. That means that your POA (medical, financial, real estate, etc) means nothing when the person is mentally capable, even if they aren't currently physically capable - so if they're in a facility for rehab after a surgery, or on bed rest due to the flu. Mentally, they are fine, and so a traditional POA is not in effect.

A DPOA, or Durable POA, gives the person with POA powers even when the primary is fully mentally capable of making decisions. It's basically like signing one document that adds your POA to all of your financial accounts. (As far as I know, there is no DPOA for medical, only for financial and similar.) This allows the person who holds the POA to sign for the primary or make financial decisions on their behalf even when the person is fully mentally capable. That means that if they have the flu, are in the hospital, etc, the person holding POA can run around and take care of anything that needs to be taken care of.
The primary is still fully capable of entering into contracts, making financial decisions, etc on their own, but the person holding POA then has access to all of those accounts and can also make decisions for them. Again, in a sense, it is a single piece of paper that gives the POA holder (or holders - C and I had a joint DPOA for MIL) joint access to every account the primary has.
At the same time, when something is done by the POA holder, it has to be documented as such. Again, on documents, I would print MIL's name, sign my own, and then write DPOA afterwards. This is because anytime you have POA (durable or otherwise) you have a legal obligation to act in accordance with the wishes of the primary or in their best interest, so there is a legal transparency that needs to go with that.

DPOA was the best choice with us because otherwise we would have had to file for a guardianship of MIL, or let her end up living on the streets, even though she actually had more than enough money. And while MIL was really not fully mentally capable after her accident, she wasn't in the throws of dementia or anything like that, so getting her declared incompetent in order to get the guardianship would have just been a cruel act. As it was, she was more than willing to let C and I take over the managing of her finances.

I think this is written a little backwards. An ordinary POA terminates when the person granting the POA becomes mentally incapacitated.

A Durable POA stays in force regardless of mental capacity of the the person writing it (and as long as it is not too old/dated when exercised). DPOA is what you want to have in place. You can write a DPOA for financial or healthcare, but they are usually separate documents.

[Gardening Grandma]

Thanks shanendoah,
I am pretty sure that DH and I have DPOAs, but will verify when we get home. Good info to know.
Thank you for sharing

[seriousthistime]

Without knowing how much money you're talking about, but knowing that you've said (1) your father has enough money coming in, each month, to live on, and (2) he wants to leave you an inheritance, and (3) he has tried to gift you money...

Why don't you let him gift you the money?  He can start gifting you and your sister the maximum allowed before gift tax kicks in (someone said it was $14K per recipient this year).  And since you and your sister trust each other, why not set the gifts aside in accounts that are the sort you would prefer for him have, and if/when he needs the money, you can use that money to pay his expenses?  

Not only do insurance companies insure each other, the states also provide guarantees for certain sorts of insurance (including annuities) if the company goes belly up.  If you're considering an annuity, check to see what your state's guarantee is. 

[The Captain]

Jul 11, 2015 14:44:24 GMT -5 @sroo4 said:

Jul 7, 2015 9:09:27 GMT -5 The Captain said:

Thanks.  Found him.  Interesting to note he never spent more than three years with the same employer.

He does have his series 7 license though.  Better than a 6 I guess.

Ah...no. I can't tell you how many series 7 brokers I had to explain how a mutual fund works.  All this license means is that he can pass a hard test and allegedly knows the regulations and laws it doesn't mean he follows them. 

Well shoot.  So much for counting on licensing to convey at least some knowledge.

[The Captain]

Jul 11, 2015 15:42:31 GMT -5 seriousthistime said:

Without knowing how much money you're talking about, but knowing that you've said (1) your father has enough money coming in, each month, to live on, and (2) he wants to leave you an inheritance, and (3) he has tried to gift you money...

Why don't you let him gift you the money?  He can start gifting you and your sister the maximum allowed before gift tax kicks in (someone said it was $14K per recipient this year).  And since you and your sister trust each other, why not set the gifts aside in accounts that are the sort you would prefer for him have, and if/when he needs the money, you can use that money to pay his expenses?  

Not only do insurance companies insure each other, the states also provide guarantees for certain sorts of insurance (including annuities) if the company goes belly up.  If you're considering an annuity, check to see what your state's guarantee is. 

To a certain extent he's already done that.  Sissy and I currently have a decent chunk sitting in accounts that he's "gifted" us.  We're not touching it, it's his - not ours.  He likes to see the balance and it's those accounts which are only earning .5%. 

He's also accumulated another decent chunk in his own account that he want's to do something with.  Pretty much same fact pattern on earnings.

The investment guy sent me some material on Friday.  I just need to print it out and look it over and I'll be back with questions.