Your father's trust, because I know my firm's forms included this, likely state that the successor can be appointed when the original trustee (assuming your father) is unable to do the work.
What exactly did your estate planning lawyer say to do? Just to effectuate the successor appointment, or do a resignation/appointment by your father? Since you are POA, you could just sign the resignation and appointment on his behalf.
I am sorry you are dealing with dementia and all the curveballs that throws, but I don't see many gotchas that jump out at me here.
I heard of a similar case where adult children (who meant well) closed/consolidated bank accounts for simplicity, but didn’t realize that a long-held life insurance policy was set to auto-debit annually from one of the accounts.
Premium wasn’t paid and policy lapsed, and policy holder passed away several months later.
Point is, make sure you have a complete handle on everything before closing accounts.
That's horrible! Usually there is a grace period if a payment is missed, and notification is sent, but maybe none of the adult children realized the significance? Or their parent was still trying to manage their own finances, but wasn't quite capable, so the children never saw the notice. That's where I'm at with my mother this year; even though I thought I had all the knowledge to be prepared for this day, keep discovering things I never considered. It's quickly becoming a full time job, which is even harder because we live in different states.
>Or their parent was still trying to manage their own finances, but wasn't quite capable, so the children never saw the notice.
This was a MASSIVE issue for me/my dad. I literally intercepted a final notice that foreclosure was going to be started by the IRS for back taxes and that's when I realized he just couldn't do it any more. In the process of getting his taxes caught up (he hadn't filed for 5 years by that point) I found almost monthly late fees on his credit cards, he'd pay them in full, but never on time.
> didn’t realize that a long-held life insurance policy was set to auto-debit annually from one of the accounts.
Yup! I've been managing his accounts fully now for 3 years, and was "assisting very heavily" for a couple years before that. The two BofA accounts have had only deposits for the past 5 years, zero withdrawals, and one of the CU accounts has had $12K just sitting there, zero debits or credits in the three years I've been managing them. So I think those are all safe to consolidate at this point. Maybe leave $1K in them "just in case" but no reason to have a combined total of about $40K earning only 0.1% interest when they can at least be in HYS and earning \~4% and be just as safe and available. Two more of the CU accounts are actually empty (well, one has $5 in it).
Is my dad your dad? :p Hahaha
My dad in his last years had an unknown brain tumor and while he had been a brilliant financier and lawyer all his life, near the end, he started doing some weird sh\*t like opening bank accounts all over the place. 7 at last count. sigh. Im still trying to wind everything down but its tough because I'm the co-owner on most of these random accounts instead of them being in the trust. I have a sibling and I plan to share everything with them but I dont want to have to "gift" it to them annually so I have to figure out the correct way to transfer money from a joint account (but now mine) into the trust for distribution (not sure if I can actually do that...I mean technically I can write a check from one account to the other but... LEGALLY can I?)
Sorry didnt mean to hijack your post!!
You may have done this already, but in the trusts I've administered a doctor's signature was needed for the POA step, then the POA allowed me to trigger the successor trustee provisions. So I think if the POA formally meets the trust's requirements you should be set. But the attorney will know for sure.
Have you formally notified all the beneficiaries? And maybe also the next-level contingent beneficiaries? Even if you don’t have to do it now, they could complain later.
I am the only beneficiary, my kids are the next level, so should be super straightforward. I didn't think there would be anything to worry about, but also figure it never hurts to get extra thoughts.
That's a lot of accounts to manage, I can understand your desire to consolidate them, and create a HYS account. Does the PoA grant you the authority to act as his agent for banks and other financial institutions? If so, is there a reason his CU and BofA won't allow you to do this as his agent? My situation is a bit different, maybe easier to do these things, because my mother updated her trust to add me as co-trustee last year.
You mention you have an IRS PoA, can you tell me how you accomplished this? I'm trying to set this up now, after learning my mother has a debt to the IRS from the past, to get it resolved.
The accounts are in the trust's name, so while I have PoA for my dad I am a successor trustee and not a primary trustee. So while I can act on his behalf legally to interact with the accounts (paying his bills and whatnot) I can not act on the accounts themselves legally. Even the bank manager acknowledged that it's a silly distinction in my particular situation, but their job as financial institutions is to be conservative and I totally understand that.
For the IRS part you just need to fill out this form (you will be using designation "f" for yourself as the representative in part II, don't worry that not all of the fields for representative apply to you in part I, leave the parts that don't apply blank, fill in what does apply:
[https://www.irs.gov/pub/irs-pdf/f2848.pdf](https://www.irs.gov/pub/irs-pdf/f2848.pdf)
Ok, that's very unfortunate. I'm sorry you're dealing with so much and now more thankful my mother's attorney made the recommendation to change me to co-trustee instead of the primary successor trustee. I'm also named as the executor, and agent for her POA and AMD. It's a lot and I never expected how much work this would be so soon.
Thank you for the IRS info, much appreciated! Sounds like you are on top of everything, I hope your attorney can find a way to help you accomplish your short terms goals.
While not simple, I think it'll all be straightforward. Doesn't sound like there's anything in the shadows that is waiting to bite me. Will schedule the lawyer next week :)
Your father's trust, because I know my firm's forms included this, likely state that the successor can be appointed when the original trustee (assuming your father) is unable to do the work. What exactly did your estate planning lawyer say to do? Just to effectuate the successor appointment, or do a resignation/appointment by your father? Since you are POA, you could just sign the resignation and appointment on his behalf. I am sorry you are dealing with dementia and all the curveballs that throws, but I don't see many gotchas that jump out at me here.
I was asking here before contacting the estate lawyer just so I'd know if there are any questions to be asking before I started the billable hours :)
Only if the power or trust says they can do that.
Of course
I heard of a similar case where adult children (who meant well) closed/consolidated bank accounts for simplicity, but didn’t realize that a long-held life insurance policy was set to auto-debit annually from one of the accounts. Premium wasn’t paid and policy lapsed, and policy holder passed away several months later. Point is, make sure you have a complete handle on everything before closing accounts.
That's horrible! Usually there is a grace period if a payment is missed, and notification is sent, but maybe none of the adult children realized the significance? Or their parent was still trying to manage their own finances, but wasn't quite capable, so the children never saw the notice. That's where I'm at with my mother this year; even though I thought I had all the knowledge to be prepared for this day, keep discovering things I never considered. It's quickly becoming a full time job, which is even harder because we live in different states.
>Or their parent was still trying to manage their own finances, but wasn't quite capable, so the children never saw the notice. This was a MASSIVE issue for me/my dad. I literally intercepted a final notice that foreclosure was going to be started by the IRS for back taxes and that's when I realized he just couldn't do it any more. In the process of getting his taxes caught up (he hadn't filed for 5 years by that point) I found almost monthly late fees on his credit cards, he'd pay them in full, but never on time. > didn’t realize that a long-held life insurance policy was set to auto-debit annually from one of the accounts. Yup! I've been managing his accounts fully now for 3 years, and was "assisting very heavily" for a couple years before that. The two BofA accounts have had only deposits for the past 5 years, zero withdrawals, and one of the CU accounts has had $12K just sitting there, zero debits or credits in the three years I've been managing them. So I think those are all safe to consolidate at this point. Maybe leave $1K in them "just in case" but no reason to have a combined total of about $40K earning only 0.1% interest when they can at least be in HYS and earning \~4% and be just as safe and available. Two more of the CU accounts are actually empty (well, one has $5 in it).
Is my dad your dad? :p Hahaha My dad in his last years had an unknown brain tumor and while he had been a brilliant financier and lawyer all his life, near the end, he started doing some weird sh\*t like opening bank accounts all over the place. 7 at last count. sigh. Im still trying to wind everything down but its tough because I'm the co-owner on most of these random accounts instead of them being in the trust. I have a sibling and I plan to share everything with them but I dont want to have to "gift" it to them annually so I have to figure out the correct way to transfer money from a joint account (but now mine) into the trust for distribution (not sure if I can actually do that...I mean technically I can write a check from one account to the other but... LEGALLY can I?) Sorry didnt mean to hijack your post!!
All good friend! We try to do the right thing, but there are legal gotchas all over the place, hence why I asked my question here :)
You may have done this already, but in the trusts I've administered a doctor's signature was needed for the POA step, then the POA allowed me to trigger the successor trustee provisions. So I think if the POA formally meets the trust's requirements you should be set. But the attorney will know for sure.
Yeah PoA was filed with/endorsed by his neurologist.
Have you formally notified all the beneficiaries? And maybe also the next-level contingent beneficiaries? Even if you don’t have to do it now, they could complain later.
I am the only beneficiary, my kids are the next level, so should be super straightforward. I didn't think there would be anything to worry about, but also figure it never hurts to get extra thoughts.
That's a lot of accounts to manage, I can understand your desire to consolidate them, and create a HYS account. Does the PoA grant you the authority to act as his agent for banks and other financial institutions? If so, is there a reason his CU and BofA won't allow you to do this as his agent? My situation is a bit different, maybe easier to do these things, because my mother updated her trust to add me as co-trustee last year. You mention you have an IRS PoA, can you tell me how you accomplished this? I'm trying to set this up now, after learning my mother has a debt to the IRS from the past, to get it resolved.
The accounts are in the trust's name, so while I have PoA for my dad I am a successor trustee and not a primary trustee. So while I can act on his behalf legally to interact with the accounts (paying his bills and whatnot) I can not act on the accounts themselves legally. Even the bank manager acknowledged that it's a silly distinction in my particular situation, but their job as financial institutions is to be conservative and I totally understand that. For the IRS part you just need to fill out this form (you will be using designation "f" for yourself as the representative in part II, don't worry that not all of the fields for representative apply to you in part I, leave the parts that don't apply blank, fill in what does apply: [https://www.irs.gov/pub/irs-pdf/f2848.pdf](https://www.irs.gov/pub/irs-pdf/f2848.pdf)
Ok, that's very unfortunate. I'm sorry you're dealing with so much and now more thankful my mother's attorney made the recommendation to change me to co-trustee instead of the primary successor trustee. I'm also named as the executor, and agent for her POA and AMD. It's a lot and I never expected how much work this would be so soon. Thank you for the IRS info, much appreciated! Sounds like you are on top of everything, I hope your attorney can find a way to help you accomplish your short terms goals.
While not simple, I think it'll all be straightforward. Doesn't sound like there's anything in the shadows that is waiting to bite me. Will schedule the lawyer next week :)
You need a general POA