Durable Power of Attorney: Implementation Report

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Longruninvestor
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Durable Power of Attorney: Implementation Report

Post by Longruninvestor » Sat Aug 04, 2018 4:04 pm

My parents are in poor health and recently asked me to assist with finances: paying the regular bills, shifting cash around as needed, ensuring their RMDs work properly, and doing their annual taxes. No worries for me because my parents are uber-organized and I had a durable POA at the ready. 95% of their cash is at Ally but they bill pay from a checking account at Wells Fargo reasoning that a local branch would offer unsurpassed customer service. That assumption is going to be put to the test. Investments are at Schwab (after tax) and Fidelity (IRAs). I have accounts at all four institutions and I was optimistic that the POA process would go smoothly. Two months ago I contacted all 4 and here's my report card on how they did:

Ally Bank: A+++ Per instructions from an Ally customer service rep I emailed a scanned copy of the durable POA to Ally's legal document review department. I got a phone call from a live person the next day and we did a back and forth Q and A for a few minutes and traded some emails. My Ally account and going through their verification process was enough to convince them that I was who I said I was. The POA was effective in 3 days from the start of the process. I interacted with three people from Ally during this process: a phone rep, a staffer from their legal review department and a supervisor in that department. All three were friendly, professional and helpful. All three expressed concern for my situation, followed up promptly on emails and phone calls and did what they said they were going to do.

Wells Fargo: F--- Doing anything with WF over the phone is apparently out of the question. I eventually decide to bite the bullet and stand in line one day at a my local Wells Fargo branch. I wait in queue for two hours for a banker that is said to know something about POAs. My number is finally called and we spend 2 and a half hours together filling out forms. Then WF corporate legal gets on the phone with us for 30 minutes to chat about my POA. WF legal has an indeterminate gripe with the POA but they refuse to say what that is; the banker mutes the phone and urges me to be quiet. The banker and attorney agree that a "technical exemption" is required. She prints something out and I sign it. She makes a copy of the POA and electronically loads it into a WF system. WF legal calls her back and asks her if the POA is the original. It is . She notarizes all of my signatures on many documents. Despite the fact that I've been a Wells Fargo customer for 30 years and am frequently in this particular branch the banker insists on taking copies of my drivers license and my ATM card. They have been in and out of my wallet numerous times during this ordeal. More notary stamping business. I leave the branch exhausted. I log into WF a couple of days later but no POA account shows up. I call and am told to be patient and let the review system work it's magic. I call back a week later. Same story. I call the 800 customer once per week. Nothing. I occasionally call the branch. The story is always the same. Be patient. This takes time. I give up.

Fidelity: F I file the electronic paperwork and include some text indicating that my parent's estate plan and all associated documents were prepared by a competent attorney. An email from Fidelity comes a few days later indicating that while they appreciate good estate planning that Fidelity considers account security to be paramount and I need to have my parents fill out their POA. My stamina is gone. I punt.

Charles Schwab: F. I called the Charles Schwab customer service line and after several long periods on hold with consult from several experts the rep concludes the path forward is to fill out a Charles Schwab POA and instructs me to have my parents sign it and get it notarized. That's tough to to do when my pops is in the hospital but the reps suggests I visit a Charles Schwab office for help. I don't know why this step would be helpful. Ironically my dad and I met his lawyer at a Charles Schwab estate planning seminar several years back. The rep from the local CS office said he was one of the best and encouraged attendees to consider him if we needed an attorney. Several members of my extended family did use him, and in fact, I was the personal representative for an estate that went through probate several years back. There were no issues. The POA worked fine. I punt again.

I pay my folk's bills using Ally with no issues. After my dad passes (likely soon) I will work with my mom to consolidate all of her investment assets at Vanguard --we will do in kind transfers of all of her after tax investments and doing a 3 fund portfolio for her IRA and the IRA she inherits from my dad. BTW, my parents had professional money management at both Fidelity and CS and there's quite a laundry list of funds and ETFs. Hardly Boglehead worthy. I will fix the retirement portion of the portfolio And if I can convince her, we will find another brick and mortar bank. I'm not a profane person but I can no longer say the Wells Fargo name without placing a profanity in front of it.

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FIREchief
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Re: Durable Power of Attorney: Implementation Report

Post by FIREchief » Sat Aug 04, 2018 4:17 pm

How close is the closest Fidelity Brick and Mortar to you? You may wish to try setting up an appointment with an actual person.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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celia
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Re: Durable Power of Attorney: Implementation Report

Post by celia » Sat Aug 04, 2018 5:00 pm

Thank you for your report. Your results were what I would have expected, assuming 1) you used generic POA forms (instead of a POA/Agent Authorization form from each custodian) and 2) each of your parents prepared a signed/dated statement asking that you be given authority to transact on their accounts. (That was likely WF's "technical exemption" as your parents didn't use their form, but the generic one was likely close enough.) The same thing would happen at Vanguard, although you now will obviously use an Agent Authorization form to authorize you to transact on all their accounts. But you may still have problems getting the old custodians to release their assets to Vanguard. Think about it. That will look more questionable than if you transacted on accounts at the current custodians.

The easier way for this to have happened was if your parents had a trust prepared (with you as successor trustee) and put all their (non-retirement account) assets in the trust.

Where I found the generic POA form accepted was when I inquired of health insurance benefits, credit card questions, and retiree benefits, because these places are used to working with the elderly and their agents. The IRS will likely accept it too.

To have your dad sign a custodian's POA while in the hospital (assuming he is mentally and physically able to do it) is to request if the hospital has a notary who can come to his room to witness his signature. He will likely still need a photo ID. Or find a notary who travels (for an extra fee).

RetiredAL
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Re: Durable Power of Attorney: Implementation Report

Post by RetiredAL » Sat Aug 04, 2018 5:15 pm

This seems to to me to be one more confirmation that when dealing with Financial Institutions, it is best to use their POA forms so that some remote lawyer does not get an uncomfortable wad trying to decide about a pre-existing general POA.

I recently updated our Fidelity POA's due to adding new accounts. Filled out new Fido Forms for DW and I, then we took them to a local Fido office where they notarized ( no charge ) and submitted by them. I noticed the next evening, to my surprise, that the new POA's were in effect.

Of note, if we had mailed them in, they required a notarized witness in additional to the notarization for our signatures. Fido did have a second person present in addition to Notary Person, but that person did not sign our forms as a witness. The total effort to do this with the forms already filled out: 10 minute drive to their office, 15 minutes at their office.

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PalmQueen
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Re: Durable Power of Attorney: Implementation Report

Post by PalmQueen » Sat Aug 04, 2018 6:15 pm

Longruninvestor wrote:
Sat Aug 04, 2018 4:04 pm
And if I can convince her, we will find another brick and mortar bank. I'm not a profane person but I can no longer say the Wells Fargo name without placing a profanity in front of it.
We've had accounts with WF and Fidelity for years and years. Recently when I needed to do something out of the normal scheme of things, they both earned a grade of "F". Details are irrelevant but involved multiple calls and in-person visits and getting inaccurate information. (Based on information given to me by not one, but three Fidelity reps, stocks were transferred to the wrong account. They said I was "lucky" because the account number they used wasn't assigned to anyone so they didn't have to unravel that.)

I'm chiming in to share that I took my business to US Bank. They did everything we needed with great efficiency, accuracy and outstanding client service. One requirement of mine that WF said was impossible was accomplished seamlessly by US Bank. And it was all done with a smile. :D

afan
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Re: Durable Power of Attorney: Implementation Report

Post by afan » Sat Aug 04, 2018 7:19 pm

The OP had better luck with a DPOA than I did.

I was in a similar situation, handling affairs for an elderly person. I did not find a single financial institution that would accept the POA. Not one.

The solution was to transfer assets out of the recalcitrant companies into one account set up in the name of the person's trust. I was trustee. That was a breeze.

If your parents really need to have accounts at multiple places they could either complete each company's POA forms, or go the trust route.

If I were you I would consider consolidating all accounts at one company. Fidelity or Schwab would be fine. I would not deal with Wells Fargo for obvious reasons. If Ally bank works for you that is great, but I would otherwise put everything in one place. Even if you skip the trust and just use POA, having to deal with only one, or at most two, institutions will make life much easier.

You can have a bank account with Fidelity or Schwab.
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fourwheelcycle
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Re: Durable Power of Attorney: Implementation Report

Post by fourwheelcycle » Sat Aug 04, 2018 9:10 pm

From my own experience, with my aunt some years ago and with my father more recently:

Bank of America - A
Walked into my local branch with my aunt, aged 90 at the time. No advance appointment. Waited ten minutes and we were able to meet with an officer. We had the executed POA prepared by my aunt's attorney. BoA accepted her POA, helped us complete and sign a few more forms, and we were done in under and hour. I never had any trouble conducting business on her account, paying her bills, transferring money to Vanguard, etc.

Republic Bank - A
Walked into my father's local branch with my father, aged 94 at the time. He had called in advance and told an officer what he wanted to accomplish. We had the executed POA prepared by my father's attorney. His bank had us sign a few forms they had already mostly filled-in for us and that was it. We were out in less than fifteen minutes. I have never had any problems conducting business on his account. He pays his own bills and I keep his balance replenished with transfers of his money from Vanguard.

Vanguard - A
Hard to walk into the Vanguard office since it is over 300 miles away. However, my Vanguard reps, one when I was caring for my aunt and another more recently when I began managing my father's finances, guided us through all the necessary steps and set up new accounts in my aunt's name and later in my father's name, with me having full account transaction authority. My recollection is that in both cases we had to fill out Vanguard's forms and attach the executed POAs, but I am not sure on all the details. In any event, I consolidated the bulk of both my aunt's and my father's savings at Vanguard, with their accounts as part of my family of accounts.

There has only been one instance where my wife and I tried to do the same thing at Vanguard and Fidelity. When we did our joint revocable trust our attorney prepared detailed supplemental beneficiary forms for our retirement accounts to provide guidance if one or both of our sons happened to die close in time to us, leaving minor children. Vanguard accepted our attorney's special beneficiary forms and Fidelity said no. I have already transferred my employer-based retirement accounts from Fidelity to Vanguard, since I retired some years ago, and my wife will be transferring hers as soon as she retires.

increment
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Re: Durable Power of Attorney: Implementation Report

Post by increment » Sat Aug 04, 2018 11:01 pm

I don't know that using a trust makes things hassle-free. Maybe it forces you to take care of more issues at the beginning, when the trust's accounts are established in the first place.

Adding a PoA is like adding/removing/changing trustees of a trust. When you do so, each institution probably expects you to submit their own specific paperwork, signed and perhaps notarized. Notifying institutions of changes in trustees would not be optional, but rather be required by the terms of the trust accounts. This might mean having each trustee fill out his or her own new account application, and submitting another copy of the trust for the enjoyment of the legal department, whether or not any of the actual terms had changed. (When he added a co-trustee, my aging father did not enjoy having to give all this information yet again, including all the nosy "know your customer"-type questions about everything else in his financial life.)

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celia
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Re: Durable Power of Attorney: Implementation Report

Post by celia » Sun Aug 05, 2018 12:39 am

increment wrote:
Sat Aug 04, 2018 11:01 pm
Adding a PoA is like adding/removing/changing trustees of a trust.
I think of them as being more like opposites. When you title an account as being owned by a trust, you are saying that the person who can do transactions will change over time, especially after the grantor(s) have died. You give them copies of key pages of the trust up front. So when a new trustee takes effect, the bank might compare the same key pages to the copy that the new trustee brings in.

With a POA, it is likely being submitted years after the account has been open. If that POA was executed more than a week earlier (give or take), how confident will the custodian be that that is the grantor's current wish? Institutions usually want to see signed forms in a timely manner, not years later.
When you do so, each institution probably expects you to submit their own specific paperwork, signed and perhaps notarized.
When the trustee changes, of course, some paperwork needs to be signed for the institution, so that the new trustee signature will be honored by them. Depending on the terms of the trust for when a new trustee takes over, usually a death certificate, doctor's letter, or grantors letter will trigger the start of a new trustee.
Notifying institutions of changes in trustees would not be optional, but rather be required by the terms of the trust accounts. This might mean having each trustee fill out his or her own new account application, ...
The trustee does not need to open a new account, unless the trust becomes irrevocable (on death of the last grantor). And even if a new account number is needed (to help separate the year-end tax forms for the revocable trust and the irrevocable trust), I have never filled out all the paperwork for a new account. They will just roll the assets over to another account with a slightly different "owner" (<grantor(s) as trustee(s) for revocable trust> becomes <new trustee as trustee for irrevocable trust>).


As an aside, I am surprised that no Bogleheads have yet said they would just use the same login credentials that the original owner used. But, maybe we have now discussed this enough that most Bogleheads know to use an "Agent Authorization" form specific to the custodian. Once the custodian finds out that the grantor died, if they see logins after the date of death, they will know that the security of the account has been compromised. It's hard to say what they would then do when the POA or new trustee didn't inform them properly.

If we expect the custodians to maintain security on our accounts, we need to do our part in not sharing passwords.

Rob1
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Re: Durable Power of Attorney: Implementation Report

Post by Rob1 » Sun Aug 05, 2018 1:10 am

@Longruninvestor

I’m unfortunately a few steps ahead of you in a very similar situation. A couple of things I’ve learned that may help:

Well Fargo
Consider becoming a secondary signer on your parents’ account(s). That has worked better vs PofA. Also, if you don’t have an account with Wells, at least have them help you register an online account, which will link to, and give you easy access to, your parents’ account(s).

Vanguard
Complete the form “Full Agent Authorization” (full, not just agent authorization). Again, works better than a PofA. Also be prepared that your dad’s account will be completly locked upon his passing, until the somewhat time consuming process of transferring assets to your mom (or other beneficiaries) is completed.

Sorry to hear that your parents are struggling.

daveydoo
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Re: Durable Power of Attorney: Implementation Report

Post by daveydoo » Sun Aug 05, 2018 2:52 am

This is important and sobering. Thank you for sharing your experience.

A sib had POA as my last parent was terminally ill but we never needed to invoke it for all but a checking account to pay a few bills.
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carolinaman
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Re: Durable Power of Attorney: Implementation Report

Post by carolinaman » Sun Aug 05, 2018 7:06 am

WF is our primary bank. They are usually a pain to deal with on anything out of the ordinary. We have DPOA and a trust but have not put accounts in trust yet. It sounds as if we need to do that. Also do same for Vanguard.

I was POA and executor for my mother. She lived in a small town 3 hours from me. She banked at BOA whom I have never banked with although their headquarters are local. I was surprised at how easy it was for me to conduct business with them on behalf of my mother, both in her town and locally in Charlotte. +1 for BOA, at least this one time. In fact, I was surprised at how well accepted the POA was with all the companies mother conducted business with, especially since I was from out of town.

bac
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Re: Durable Power of Attorney: Implementation Report

Post by bac » Sun Aug 05, 2018 7:27 am

Rob1 wrote:
Sun Aug 05, 2018 1:10 am
@Longruninvestor
Well Fargo
Consider becoming a secondary signer on your parents’ account(s). That has worked better vs PofA. Also, if you don’t have an account with Wells, at least have them help you register an online account, which will link to, and give you easy access to, your parents’ account(s).
Be careful doing this. I was a signer on my sister's checking account, and she on mine, both in New Jersey. When she died two years ago and I asked my bank to take her name off my account, my bank froze half of the date-of-death balance in my account, because she was considered a co-owner. The freeze was motivated by New Jersey's since-repealed estate tax.

To get a tax waiver, my checking account was included in my sister's estate tax return, with the explanation that she was on the account for convenience only. Because she had her own checking account, this was not a problem.

The bank inadvertently unfroze the money (circa $12,000) some months later in the process of dealing with an unauthorized debit. But even with an estate tax waiver in hand, I had to see a branch manager to get my sister's name off the account. In 20/20 hindsight, I shouldn't have told my bank she had died.

increment
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Re: Durable Power of Attorney: Implementation Report

Post by increment » Sun Aug 05, 2018 10:41 am

The trustee does not need to open a new account, unless the trust becomes irrevocable (on death of the last grantor). And even if a new account number is needed (to help separate the year-end tax forms for the revocable trust and the irrevocable trust), I have never filled out all the paperwork for a new account. They will just roll the assets over to another account
In the case of my father and me, twice we were told to fill out new-account paperwork, even though there was no actual new account (or account number). This made what seems like should be a ten-minute task into a hundred-minute task. The second time I just transferred the account elsewhere.

If part of the advantage of using a trust is that you are required to do the bureaucratic tasks as soon as the paperwork is valid, you could choose to do so with your Power of Attorney as well. But it seems that often people aren't warned that waiting may cause extra hassle and delay, and at a stressful time too.

afan
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Re: Durable Power of Attorney: Implementation Report

Post by afan » Sun Aug 05, 2018 11:38 am

I have added trustees to multiple accounts. It was as simple as notifying the financial company. They might have asked for a letter. There was no notary involved. I did not have to fill out a new account application.

Note that I have filled out account applications when opening new accounts for myself or a trust. I managed to survive the experience. Ten minutes would overstate the amount of time involved. But I have never been asked to do a new account application just to add a trustee.

When the beneficiary of a revocable trust of which I was trustee died I notified the financial company. I think they asked for a copy of the death certificate. They handled everything else. No other paperwork for me.

increment,

Can you describe the circumstances under which you had to do all that? I have never gone through anything approaching that. Did you create a new trust? New beneficiaries? New terms? I have revised my trust along with periodic estate planning, but never had to open new accounts. It was the same trust...
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

afan
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Re: Durable Power of Attorney: Implementation Report

Post by afan » Sun Aug 05, 2018 11:42 am

increment wrote:
Sun Aug 05, 2018 10:41 am


If part of the advantage of using a trust is that you are required to do the bureaucratic tasks as soon as the paperwork is valid, you could choose to do so with your Power of Attorney as well. But it seems that often people aren't warned that waiting may cause extra hassle and delay, and at a stressful time too.
Again, my experience with multiple different trusts has been much simpler. There was no time pressure. There were lots of things to do when the beneficiary died but there was almost nothing to do with regards to the trust. It still existed, the checks still cleared as I paid final bills. Filed tax returns, sold real estate. Having assets in trust was vastly easier than dealing with the small amounts that had not made it into the trust.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Ged
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Re: Durable Power of Attorney: Implementation Report

Post by Ged » Sun Aug 05, 2018 11:59 am

RetiredAL wrote:
Sat Aug 04, 2018 5:15 pm
This seems to to me to be one more confirmation that when dealing with Financial Institutions, it is best to use their POA forms so that some remote lawyer does not get an uncomfortable wad trying to decide about a pre-existing general POA.
My wife and I registered our pre-existing general DPOAs with Fidelity using their Durable Power of Attorney–Affidavit and Indemnification forms. Our town clerk offers free notary services to residents so the process was simply downloading the Fidelity forms, filling them out, getting them notarized and mailing them in with copies of the DPOAs.

A couple of weeks later the accounts were modified and we received notification of the acceptance of the DPOAs.

However with all the horror stories heard here and in the press I would be sure that the critical accounts had bank acceptance of the powers of attorney of elderly relatives BEFORE they became incapacitated.

increment
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Re: Durable Power of Attorney: Implementation Report

Post by increment » Sun Aug 05, 2018 12:40 pm

Can you describe the circumstances under which you had to do all that? I have never gone through anything approaching that.
It's my father's revocable trust. First he appointed me co-trustee. A few years later, he resigned. (No other terms were changed at those times.)

The trust owned a brokerage account represented at a big bank's local branch. Our hour or two there included the time of waiting to find someone at the branch who knew anything at all about how to add a trustee, waiting for (multiple) calls placed to the legal department, waiting while they hunted for information from the old account application, then going to the trouble of filling out new account forms, one for each of us. (I had to interview my father to fill out his application because he no longer had the eyesight to do this paperwork himself.) Probably it would have been easier or at least quicker if anyone at the branch seemed to have any recollection of what to do, but clearly my father did not take that into consideration fifteen years earlier when he opened the account.

I am still glad that he has the trust, and hope that things work out well when he passes away. But in my experience so far, being recognized as trustee of his trust has been about the same amount of trouble as being recognized as PoA for his personal accounts.

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Re: Durable Power of Attorney: Implementation Report

Post by FBN2014 » Sun Aug 05, 2018 12:53 pm

I have been told by several attorneys that using a POA is very difficult many times for the reasons that others have posted. Much easier if you have a trust to name the child as a co-trustee and have the child sign all the signature cards and other forms required by the financial institutions up front, well before they actually do any transactions. This is how my parents handled it and I never had any problems. I believe the POA document is more suited for other issues that may arise such as having the POA applying for government benefits such as Medicare, Medicaid, VA benefits, etc.
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celia
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Re: Durable Power of Attorney: Implementation Report

Post by celia » Sun Aug 05, 2018 3:22 pm

increment wrote:Our hour or two there included the time of waiting to find someone at the branch who knew anything at all about how to add a trustee, waiting for (multiple) calls placed to the legal department, waiting while they hunted for information from the old account application, then going to the trouble of filling out new account forms, one for each of us.
This sounds like our local bank on Saturday mornings. They can't sharpen a pencil without getting directions from headquarters. When I inquired about Saturday staffing, I found out that the newbies are stuck with the weekends and are often working at a branch other than their "home" branch.

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Re: Durable Power of Attorney: Implementation Report

Post by BigJohn » Mon Aug 06, 2018 3:22 pm

fourwheelcycle wrote:
Sat Aug 04, 2018 9:10 pm
Vanguard - A
Hard to walk into the Vanguard office since it is over 300 miles away. However, my Vanguard reps, one when I was caring for my aunt and another more recently when I began managing my father's finances, guided us through all the necessary steps and set up new accounts in my aunt's name and later in my father's name, with me having full account transaction authority. My recollection is that in both cases we had to fill out Vanguard's forms and attach the executed POAs, but I am not sure on all the details. In any event, I consolidated the bulk of both my aunt's and my father's savings at Vanguard, with their accounts as part of my family of accounts.
I'm surprised by this unless VG has changed their process. When I worked this 2 - 3 years ago for my wife with Alzheimer's, they required a notarized signature on their form. This became an issue as she was incapable of having a signature notarized at that point. Sending them the DPOA was never asked for and when I offered it I was told that I could send but still needed a notarized signature on VG's form.

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Re: Durable Power of Attorney: Implementation Report

Post by fourwheelcycle » Mon Aug 06, 2018 3:38 pm

BigJohn wrote:
Mon Aug 06, 2018 3:22 pm
I'm surprised by [your experience with Vanguard] unless VG has changed their process. When I worked this 2 - 3 years ago for my wife with Alzheimer's, they required a notarized signature on their form.
I am not sure of the details, only that it all worked out fine, with no problems that I recall. As I noted, we did have to fill out some of Vanguard's forms; I can't remember if they needed notarized signatures.

Longruninvestor
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Re: Durable Power of Attorney: Implementation Report

Post by Longruninvestor » Thu Aug 30, 2018 10:08 pm

An update: My dad passed away before Wells Fargo ever implemented the POA. Out of spite I closed the two WF accounts my spouse and I had with WF for 30 years. I know WF could give a rip about losing our business but the account closure was cathartic and I’m optimistic that US bank has a more customer focused business model. My mom still has the WF checking account that I was trying to POA on, and she and I paid a visit to her branch and took my dad off and added me as joint account holder —We had to endure a lecture from the banker on why a POA would be a better solution. :oops:

My mom and I were able to get my dad removed as co-trustee (and me added on) of their large savings and CD deposits at Ally bank in just few days. I can’t say enough good things about Ally.

The trust holdings at Schwab and Fidelity were complicated to deal with because both institutions require a new account when the Social security number on the account changes —trust or no trust. The paperwork took a month to process and required MANY phone calls and emails. And then when the new trust account finally shows up, there’s more paperwork to transfer the assets. Contrast that experience with Ally who just re-registered the existing account to the new SS# —3 days vs. 30.

My mom’s inheritance of my dad’s Fidelity IRA went reasonably well. The Fidelity website did bail out on the electronic form submission and forced us to mail in a signed hard copy form and death certificate. Not a huge deal but the process took a long time and only crossed the finish line when I started making calls.

I had plans to transfer all of the trust assets to Vanguard once the dust settled at Fidelity and Schwab, however, I’ve nixed that plan. Vanguard customer service is absolutely miserable these days. I asked them some preliminary process questions and then submitted a trust account application but the folks VG hires to staff the phones are green as grass. I felt like I was in a Columbo movie every time I sent a form in. VG receives the form and then I get an email saying, “Oh, wait, there’s one more form...” No thanks.

Ben10
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Re: Durable Power of Attorney: Implementation Report

Post by Ben10 » Fri Aug 31, 2018 7:58 am

Lesson: POAs are an important part of an estate plan, but having non-qualified accounts and other assets in trust generally allows much easier handoff of control to fiduciary in the event of one's incapacity, insofar as dealing with financial institutions.

2015
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Re: Durable Power of Attorney: Implementation Report

Post by 2015 » Fri Aug 31, 2018 12:33 pm

I didn't have to go through any of this nonsense. I became joint owner on all accounts, which helped tremendously both during my relative's incapacitation before death but also after death once I became executor. Caveat: it was a small estate with no real property.

c1over8
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Re: Durable Power of Attorney: Implementation Report

Post by c1over8 » Fri Aug 31, 2018 1:05 pm

The uniform power of attorney act has a provision regarding refusal to accept acknowledged power of attorney, see section 120: http://www.uniformlaws.org/shared/docs/ ... 7jan30.pdf

If your state has enacted this provision like mine has, there is a procedure to essentially force acceptance of the power of attorney. If you call this to the banker's attention and they still do not accept the poa after the time periods and procedures under subsection a, then under subsection c you can pursue a court order mandating acceptance and the financial institution will be liable for reasonable attorney's fees and costs for the proceeding.

I also note that (a)(3) provides "a person may not require an additional or different form of power of attorney for authority granted in the power of attorney presented."

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Re: Durable Power of Attorney: Implementation Report

Post by Longruninvestor » Fri Aug 31, 2018 2:44 pm

My parents set up their trust up to make my life easier as the eventual executor of their estate. That didn't go as planned, but I learn from mistakes and try to get better. Here are my lessons learned:

#1 in my personal estate plan I am abandoning any thoughts of doing a trust. Every significant asset I own can transfer via a beneficiary designation which is an efficient and well traveled path. All of the financial firms I deal with know what to do. I am going to move all of my after tax investment accounts to transfer on death registrations and in my state, I can get a transfer on death deed for my house. Retirement accounts already have beneficiaries.

#2 I'm going to start properly valuing customer service when it comes to making decisions on where I put my money. Ally was hands down the best in helping me when it counted. They assigned a case manager from their estate department who knew what he was doing and had excellent communication skills --and he followed through on stuff. On the brokerage side of the house, Fidelity was significantly better than Vanguard or Schwab, who just passed me off from one department to the next.

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Re: Durable Power of Attorney: Implementation Report

Post by FIREchief » Fri Aug 31, 2018 4:57 pm

(deleted)
Last edited by FIREchief on Fri Aug 31, 2018 4:59 pm, edited 1 time in total.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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FIREchief
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Re: Durable Power of Attorney: Implementation Report

Post by FIREchief » Fri Aug 31, 2018 4:59 pm

Longruninvestor wrote:
Fri Aug 31, 2018 2:44 pm
My parents set up their trust up to make my life easier as the eventual executor of their estate. That didn't go as planned, but I learn from mistakes and try to get better. Here are my lessons learned:

#1 in my personal estate plan I am abandoning any thoughts of doing a trust. Every significant asset I own can transfer via a beneficiary designation which is an efficient and well traveled path.
Do you have any concerns about asset protection for your heirs?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: Durable Power of Attorney: Implementation Report

Post by FIREchief » Fri Aug 31, 2018 5:00 pm

2015 wrote:
Fri Aug 31, 2018 12:33 pm
I didn't have to go through any of this nonsense. I became joint owner on all accounts, which helped tremendously both during my relative's incapacitation before death but also after death once I became executor. Caveat: it was a small estate with no real property.
If you had been sued, wouldn't this have put your relative's assets at risk?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: Durable Power of Attorney: Implementation Report

Post by Ben10 » Fri Aug 31, 2018 5:39 pm

FIREchief wrote:
Fri Aug 31, 2018 5:00 pm
2015 wrote:
Fri Aug 31, 2018 12:33 pm
I didn't have to go through any of this nonsense. I became joint owner on all accounts, which helped tremendously both during my relative's incapacitation before death but also after death once I became executor. Caveat: it was a small estate with no real property.
If you had been sued, wouldn't this have put your relative's assets at risk?
I'll answer for 2015, "yes." This is referred to as "poor man's estate planning;" hold assets to avoid probate/guardianship but make them subject to child's potential creditors/divorce, etc. If I represent mom I am suggesting a more robust plan.

2015
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Re: Durable Power of Attorney: Implementation Report

Post by 2015 » Fri Aug 31, 2018 6:28 pm

Ben10 wrote:
Fri Aug 31, 2018 5:39 pm
FIREchief wrote:
Fri Aug 31, 2018 5:00 pm
2015 wrote:
Fri Aug 31, 2018 12:33 pm
I didn't have to go through any of this nonsense. I became joint owner on all accounts, which helped tremendously both during my relative's incapacitation before death but also after death once I became executor. Caveat: it was a small estate with no real property.
If you had been sued, wouldn't this have put your relative's assets at risk?
I'll answer for 2015, "yes." This is referred to as "poor man's estate planning;" hold assets to avoid probate/guardianship but make them subject to child's potential creditors/divorce, etc. If I represent mom I am suggesting a more robust plan.
Thanks for attempting to be my mouthpiece, but your projections are invalid. I recommend engaging in second stage thinking before responding, which would include asking questions to clarify (as FireChief did) versus simply expressing opinions (which happens frequently on this board).

I have no debts (and hence no creditors), am single and hence no divorce or other entanglements of any kind, and have sufficient insurances to insure against deep risk (i.e., litigation). When I engaged in an Emergency Disaster Scenario Planning last year, I analyzed shallow and deep risk and took additional steps to "harden" my life against catastrophe. Consequently, the "risk" of my relative's assets being at risk is quite small.

Finally, my relative's finances were extremely simple without substantial assets so they didn't need a "robust" plan.

Kompass
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Re: Durable Power of Attorney: Implementation Report

Post by Kompass » Fri Aug 31, 2018 8:08 pm

Longruninvestor wrote:
Fri Aug 31, 2018 2:44 pm
My parents set up their trust up to make my life easier as the eventual executor of their estate. That didn't go as planned, but I learn from mistakes and try to get better. Here are my lessons learned:

#1 in my personal estate plan I am abandoning any thoughts of doing a trust. Every significant asset I own can transfer via a beneficiary designation which is an efficient and well traveled path. All of the financial firms I deal with know what to do. I am going to move all of my after tax investment accounts to transfer on death registrations and in my state, I can get a transfer on death deed for my house. Retirement accounts already have beneficiaries.

#2 I'm going to start properly valuing customer service when it comes to making decisions on where I put my money. Ally was hands down the best in helping me when it counted. They assigned a case manager from their estate department who knew what he was doing and had excellent communication skills --and he followed through on stuff. On the brokerage side of the house, Fidelity was significantly better than Vanguard or Schwab, who just passed me off from one department to the next.
+1

Having gone through a similar situation I have reached similar conclusions. With no heirs I have set up a DAF as a place for things to eventually go as well as a tax planning tool.
The large print giveth and the fine print taketh away.

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Re: Durable Power of Attorney: Implementation Report

Post by GreenGrowTheDollars » Fri Aug 31, 2018 8:41 pm

Fidelity was a breeze when DH took over as successor trustee pursuant to the trust documents; Bank of America froze the trust checking account for several months while their legal department played games.

Learned from sad experience with my MIL and my dad: Banks and insurance companies believe that POA's go stale after some period of time (2 years, 3 years, ?) -- I think we need to re-execute POA's every 2 years to be safe.

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Re: Durable Power of Attorney: Implementation Report

Post by afan » Sat Sep 01, 2018 4:51 am

People who have all their assets transfer by POD mechanisms leave their executors with a mess. There is nothing in the estate with which to pay final bills. This makes the executor chase those who got the POD money to return it to the estate so, for example, final income taxes can be paid along with other creditors. Legally the POD does not permit the estate to escape it's responsibilities. But having an empty eatate creates a lot of unnecessary problems. If instead those assets are in trust then the trustee pays the bills and distributes the remaining money according to the terms of the trust.

2015, since you planned so carefully I am sure you understand that "I have ample insurance" does not mean "I cannot be sued." It is at least possible that your insurance would completely cover any settlement or judgement. However, until the case is over, which can take years, all of your assets are at risk and you may have limitations on your ability to spend them. By converting some of your relative's assets to be yours, by way of a joint account, you have exposed them.

If you were to die first, there are always accidents that kill people while they are young, then the relative's assets would now be part of your estate and available to pay your final expenses.

Again, having a trust eliminates these problems.

Our experience with an elderly person paralleld what others are reporting. The simplest situations were with assets that could be transferred to the trust. As time went by and the person declined it became more difficult to identify every account and have the person sign forms to transfer assets. For all those that did get transferred it was easy. There was no need to set up a new trust each time assets came in from somewhere else. Adding a trustee was as easy as could be.

In part, the issues came to dealing with 21st century firms that expected to do business online or, if absolutely necessary, over an 800 number. We got out of the 19th century firms that wanted someone to come in person to the branch where an account had been opened to do anything. Since I was in a different state "just come by the branch" was useless.

My state has adopted the uniform DPOA provisions, as had the state where the elderly person lived. All that did was give a lawyer something to work with if we had wanted to pay them to fight with each company to get them to comply. It was far easier to transfer the money and close the accounts. That solution cost nothing, as opposed to racking up legal bills at hundreds of dollars an hour.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Re: Durable Power of Attorney: Implementation Report

Post by Ben10 » Sat Sep 01, 2018 10:13 am

2015 wrote:
Fri Aug 31, 2018 6:28 pm
Ben10 wrote:
Fri Aug 31, 2018 5:39 pm
FIREchief wrote:
Fri Aug 31, 2018 5:00 pm
2015 wrote:
Fri Aug 31, 2018 12:33 pm
I didn't have to go through any of this nonsense. I became joint owner on all accounts, which helped tremendously both during my relative's incapacitation before death but also after death once I became executor. Caveat: it was a small estate with no real property.
If you had been sued, wouldn't this have put your relative's assets at risk?
I'll answer for 2015, "yes." This is referred to as "poor man's estate planning;" hold assets to avoid probate/guardianship but make them subject to child's potential creditors/divorce, etc. If I represent mom I am suggesting a more robust plan.
Thanks for attempting to be my mouthpiece, but your projections are invalid. I recommend engaging in second stage thinking before responding, which would include asking questions to clarify (as FireChief did) versus simply expressing opinions (which happens frequently on this board).

I have no debts (and hence no creditors), am single and hence no divorce or other entanglements of any kind, and have sufficient insurances to insure against deep risk (i.e., litigation). When I engaged in an Emergency Disaster Scenario Planning last year, I analyzed shallow and deep risk and took additional steps to "harden" my life against catastrophe. Consequently, the "risk" of my relative's assets being at risk is quite small.

Finally, my relative's finances were extremely simple without substantial assets so they didn't need a "robust" plan.
You may want to check yourself before responding, your response to my comment comes across as a bit angry. And btw, forums are for expressing thoughts and opinions. If you don't want to hear other's thoughts or opinions, then don't post on the forum or don't read the responses.

I was merely responding to FireChief's question regarding the protection (or lack thereof) of joint accounts. While I said I was answering for you (because the question was posed to you), I was actually answering for myself. Perhaps your relatives situation worked out well for you, but there are many others reading this forum, and someone else following your planning could get burned.

afan
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Re: Durable Power of Attorney: Implementation Report

Post by afan » Sat Sep 01, 2018 11:01 am

It is not easy to have no creditors.
Never use a credit card? That is possible but awkward in today's economy.

Have no rent due? No problem if you own your home.

Own a home with no codo fees? Sure, buy a house.

Own your home with no mortgage? Sure, just pay it off

Own your home with no real estate taxes? Maybe such places exist. Insisting on living in such an area does cut down on your choices.

Own a home with no repair bills or utilities? Live off the grid and do all your own work.

Have no income taxes? Possible if you live off the grid and practice a hunter gatherer lifestyle. No earned income and no investment income.

But if someone decides to sue you now you have a potential creditor. You may say "who would sue me? I have no money, no income, no assets and I live off the grid." Ah, but you own that cabin...
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

Longruninvestor
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Re: Durable Power of Attorney: Implementation Report

Post by Longruninvestor » Sat Sep 01, 2018 12:42 pm

afan wrote:
Sat Sep 01, 2018 4:51 am
People who have all their assets transfer by POD mechanisms leave their executors with a mess. There is nothing in the estate with which to pay final bills. This makes the executor chase those who got the POD money to return it to the estate so, for example, final income taxes can be paid along with other creditors. Legally the POD does not permit the estate to escape it's responsibilities. But having an empty eatate creates a lot of unnecessary problems. If instead those assets are in trust then the trustee pays the bills and distributes the remaining money according to the terms of the trust.
That's a really good point. So perhaps the thing to do is to configure the after tax investment accounts as transfer on death, but leave the bank accounts in a standard registration. I would have one checking account registered with the kid chosen to be executor as joint owner. There'd be enough cash in this account to cover funeral expenses and any outstanding bills. The surplus left in that checking account could simply be payment for services rendered. My wife and i have a standard will and the house and bank accounts would pass through probate while the balance of our estate, which I estimate as 80% would pass through beneficiary designations.

The kid with joint account ownership is equipped to step in and help his parents pay bills at any time no matter the circumstance with no trips to the bank and no lawyers required. At the appropriate stage, I would also assign them agency privileges on all the investment accounts, retirement and after tax. It's worth noting that Vanguard doesn't let you put agency privileges on accounts with trust registrations; that's what co-trustees are for I guess. My wife and I have no debt and we trust our children. This minimalistic estate plan wouldn't necessarily work well if we didn't enjoy these advantages.

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Re: Durable Power of Attorney: Implementation Report

Post by afan » Sat Sep 01, 2018 12:56 pm

A better maneuver would be to give your kid the power to write checks for you, without making them a joint owner. Having them as joint owner opens up problems that you have no need to create. The paperwork to give them this ability is not going to be more than making them a joint owner.

This approach would also requires you to figure out how much money might be needed to cover all final expenses, and keeping that amount in a checking account, hopefully for years. If you had the money either in your probate estate or in a trust, then it would not have to be kept in the one checking account to which your child/executor had access.

Do you know how much all your final bills, income taxes, any federal or state estate taxes and so forth will cost? With your plan, you will need a good idea of that. If you underestimate, then you are right back to the problem outlined above.

Do you own a house? Someone will have to maintain it, pay utilities and taxes, keep it in good repair, pay homeowner's insurance and otherwise keep it in condition to sell. That could take a while, with money going out the door while all that takes place.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Re: Durable Power of Attorney: Implementation Report

Post by FIREchief » Sat Sep 01, 2018 1:23 pm

Ben10 wrote:
Sat Sep 01, 2018 10:13 am
Perhaps your relatives situation worked out well for you, but there are many others reading this forum, and someone else following your planning could get burned.
This is exactly why I asked my original (rhetorical) question. It's good to hear that 2015 understands the risks and has somewhat addressed them. There are just too many situations that can't be anticipated. What if a person has a sudden health crisis and winds up in a hospital for months or years? We see too many reports where despite current insurance protections, that person still incurs tremendous medical debt, and the creditors will not be far behind.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: Durable Power of Attorney: Implementation Report

Post by whistle1 » Sat Sep 01, 2018 3:37 pm

If they are in poor health, it is maybe time to use their investments in providing the best medical treatment and the best nursing care that could be possibly provided to them. As their son, you do not need a durable or a medical power of attorney as you automatically would possess the right to make the same decision, and take the same actions as if you would have been acting under either one in the unfortunate event your parents become incapacitated. This would only be assessed by a medical doctor, and you would be the first to know, and only one informed, if no other siblings. You will be in charge of all aspects of their lives. There are formalities, and documents to fill-out, of course, that are provided directly by the hospital staff.
Last edited by whistle1 on Sat Sep 01, 2018 3:51 pm, edited 2 times in total.

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Re: Durable Power of Attorney: Implementation Report

Post by Hockey10 » Sat Sep 01, 2018 3:40 pm

afan wrote:
Sat Sep 01, 2018 12:56 pm
A better maneuver would be to give your kid the power to write checks for you, without making them a joint owner.
That is what my Dad did as he was starting to decline. He lived for almost 10 years after that and I paid all of his bills during those years with his checking account. This arrangement worked well as he still saw his checking account statement each month and all of his bills were paid on time.

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Re: Durable Power of Attorney: Implementation Report

Post by afan » Sat Sep 01, 2018 3:43 pm

whistle1 wrote:
Sat Sep 01, 2018 3:37 pm
If they are in poor health, they should request a medical power of attorney instead of being worried to find someone they can trust enough to deal with the financial aspect of their lives. Luckily, as their son, you do not need either one of this legal documents, as you possess the rights to make the same decision and take same actions you would have made under both powers of attorney, in the unfortunate event your parents become incapacitated. This would only be assessed by a medical doctor and you would be the first to know, and only one informed, if no other siblings. You will be in charge of all aspects of their lives. There are formalities, and documents to fill-out of course that are provided directly by the hospital staff.

This is definitely not true in my state. For a child to function as the health care proxy they would need a document executed by the parents, or be appointed by a court.

Having a health care proxy in no way substitutes for having someone who can manage finances. They need not be the same person and the health care proxy form only deals with health decisions, someone's financial life. Again, in my state, being a child does not give you the ability to bypass a DPOA either.

If there are states where a child automatically has these abilities, it would be interesting to know which ones.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Re: Durable Power of Attorney: Implementation Report

Post by whistle1 » Sat Sep 01, 2018 3:54 pm

afan wrote:
Sat Sep 01, 2018 3:43 pm
whistle1 wrote:
Sat Sep 01, 2018 3:37 pm
If they are in poor health, they should request a medical power of attorney instead of being worried to find someone they can trust enough to deal with the financial aspect of their lives. Luckily, as their son, you do not need either one of this legal documents, as you possess the rights to make the same decision and take same actions you would have made under both powers of attorney, in the unfortunate event your parents become incapacitated. This would only be assessed by a medical doctor and you would be the first to know, and only one informed, if no other siblings. You will be in charge of all aspects of their lives. There are formalities, and documents to fill-out of course that are provided directly by the hospital staff.

This is definitely not true in my state. For a child to function as the health care proxy they would need a document executed by the parents, or be appointed by a court.

Having a health care proxy in no way substitutes for having someone who can manage finances. They need not be the same person and the health care proxy form only deals with health decisions, someone's financial life. Again, in my state, being a child does not give you the ability to bypass a DPOA either.

If there are states where a child automatically has these abilities, it would be interesting to know which ones.
I have edited my post.

2015
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Re: Durable Power of Attorney: Implementation Report

Post by 2015 » Sat Sep 01, 2018 6:12 pm

Ben10 wrote:
Sat Sep 01, 2018 10:13 am
2015 wrote:
Fri Aug 31, 2018 6:28 pm
Ben10 wrote:
Fri Aug 31, 2018 5:39 pm
FIREchief wrote:
Fri Aug 31, 2018 5:00 pm
2015 wrote:
Fri Aug 31, 2018 12:33 pm
I'll answer for 2015, "yes." This is referred to as "poor man's estate planning;" hold assets to avoid probate/guardianship but make them subject to child's potential creditors/divorce, etc. If I represent mom I am suggesting a more robust plan.
Thanks for attempting to be my mouthpiece, but your projections are invalid. I recommend engaging in second stage thinking before responding, which would include asking questions to clarify (as FireChief did) versus simply expressing opinions (which happens frequently on this board).

I have no debts (and hence no creditors), am single and hence no divorce or other entanglements of any kind, and have sufficient insurances to insure against deep risk (i.e., litigation). When I engaged in an Emergency Disaster Scenario Planning last year, I analyzed shallow and deep risk and took additional steps to "harden" my life against catastrophe. Consequently, the "risk" of my relative's assets being at risk is quite small.

Finally, my relative's finances were extremely simple without substantial assets so they didn't need a "robust" plan.
You may want to check yourself before responding, your response to my comment comes across as a bit angry. And btw, forums are for expressing thoughts and opinions. If you don't want to hear other's thoughts or opinions, then don't post on the forum or don't read the responses.

I was merely responding to FireChief's question regarding the protection (or lack thereof) of joint accounts. While I said I was answering for you (because the question was posed to you), I was actually answering for myself. Perhaps your relatives situation worked out well for you, but there are many others reading this forum, and someone else following your planning could get burned.
Well the projection of anger is invalid. I was simply responding to a number of opinions and assumptions you made. I was also making what I believe to be a constructive recommendation to use a deeper, second stage thinking approach in posting by asking questions for clarification before expressing mere opinions. My precise point was that opinions and assumptions do not equal fact. The more I study the frailties of human reasoning and decision-making the more convinced I am that attempting to craft the most clever strategy at the expense of knowing our own minds is one of the most dangerous things we can do.

I do agree with you that the course of action I took may not be applicable to some others. I also agree this can be one of the greatest weaknesses in a forum like BH, as we may find ourselves following strategies used by others who are playing a different metagame than we are. This applies especially to investing. I also appreciate your contribution.

Longruninvestor
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Re: Durable Power of Attorney: Implementation Report

Post by Longruninvestor » Sat Sep 01, 2018 9:03 pm

afan wrote:
Sat Sep 01, 2018 12:56 pm
A better maneuver would be to give your kid the power to write checks for you, without making them a joint owner. Having them as joint owner opens up problems that you have no need to create. The paperwork to give them this ability is not going to be more than making them a joint owner.

This approach would also requires you to figure out how much money might be needed to cover all final expenses, and keeping that amount in a checking account, hopefully for years. If you had the money either in your probate estate or in a trust, then it would not have to be kept in the one checking account to which your child/executor had access.

Do you know how much all your final bills, income taxes, any federal or state estate taxes and so forth will cost? With your plan, you will need a good idea of that. If you underestimate, then you are right back to the problem outlined above.

Do you own a house? Someone will have to maintain it, pay utilities and taxes, keep it in good repair, pay homeowner's insurance and otherwise keep it in condition to sell. That could take a while, with money going out the door while all that takes place.
My chosen executor will be a joint account holder on just one of my checking accounts, which will have enough money in it to pay funeral expenses and a few other immediate term bills; the rest of my cash will be probated along with my house. Retirement accounts and after tax Investments will be transferred on death via beneficiary rules to all of my kids. The "better maneuver" you're referring to of giving permission to write checks on the account is, I presume, a POA. A POA only works when the account holder is alive, while the joint ownership will endure and provide my executor with immediate control and access to a limited amount of cash. My objective in all of this is to make his life easier when the time arrives. My dad had the same objective for me and he listened attentively when an attorney he met an estate planning seminar extolled the virtues of a trust. And my dad spent good money on that trust, but the trust made my task harder and I'm going to take a different path. I understand there's some risk involved with a joint registration with my son or daughter, however, I believe the benefits outweigh the risks. My dad's trust has given me a massive amount of work: I got to fill out forms by the dozen and send envelops through the mail to my mom so she could sign stuff and mail it to other places. And this trust gave me the opportunity to spend hours in banks waiting for bankers to notarize signatures and apply medallion guarantee stamps. I've spent hours on the hold waiting for estate representatives at fidelity and Schwab. This trust that was supposed to make my life so easy has, in the end, only benefitted the attorney that got paid for creating it. There's a better way and I'm taking it.

Ben10
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Re: Durable Power of Attorney: Implementation Report

Post by Ben10 » Sun Sep 02, 2018 8:42 am

2015 wrote:
Sat Sep 01, 2018 6:12 pm
Ben10 wrote:
Sat Sep 01, 2018 10:13 am
2015 wrote:
Fri Aug 31, 2018 6:28 pm
Ben10 wrote:
Fri Aug 31, 2018 5:39 pm
FIREchief wrote:
Fri Aug 31, 2018 5:00 pm


I'll answer for 2015, "yes." This is referred to as "poor man's estate planning;" hold assets to avoid probate/guardianship but make them subject to child's potential creditors/divorce, etc. If I represent mom I am suggesting a more robust plan.
Thanks for attempting to be my mouthpiece, but your projections are invalid. I recommend engaging in second stage thinking before responding, which would include asking questions to clarify (as FireChief did) versus simply expressing opinions (which happens frequently on this board).

I have no debts (and hence no creditors), am single and hence no divorce or other entanglements of any kind, and have sufficient insurances to insure against deep risk (i.e., litigation). When I engaged in an Emergency Disaster Scenario Planning last year, I analyzed shallow and deep risk and took additional steps to "harden" my life against catastrophe. Consequently, the "risk" of my relative's assets being at risk is quite small.

Finally, my relative's finances were extremely simple without substantial assets so they didn't need a "robust" plan.
You may want to check yourself before responding, your response to my comment comes across as a bit angry. And btw, forums are for expressing thoughts and opinions. If you don't want to hear other's thoughts or opinions, then don't post on the forum or don't read the responses.

I was merely responding to FireChief's question regarding the protection (or lack thereof) of joint accounts. While I said I was answering for you (because the question was posed to you), I was actually answering for myself. Perhaps your relatives situation worked out well for you, but there are many others reading this forum, and someone else following your planning could get burned.
Well the projection of anger is invalid. I was simply responding to a number of opinions and assumptions you made. I was also making what I believe to be a constructive recommendation to use a deeper, second stage thinking approach in posting by asking questions for clarification before expressing mere opinions. My precise point was that opinions and assumptions do not equal fact. The more I study the frailties of human reasoning and decision-making the more convinced I am that attempting to craft the most clever strategy at the expense of knowing our own minds is one of the most dangerous things we can do.

I do agree with you that the course of action I took may not be applicable to some others. I also agree this can be one of the greatest weaknesses in a forum like BH, as we may find ourselves following strategies used by others who are playing a different metagame than we are. This applies especially to investing. I also appreciate your contribution.
I appreciate your post. I read your original post and the response very quickly, didn't give it too much thought, and added my 2 cents. Hope we can all learn from each other's posts.

2015
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Re: Durable Power of Attorney: Implementation Report

Post by 2015 » Sun Sep 02, 2018 11:09 am

Here's an excellent demonstration of what I was attempting to point out. This is germane to DPOA discussions as one person's strategy may be another's error:

https://fs.blog/2018/08/power-of-anecdotes/
So next time you hear the words “the polls say,” “studies show,” or “you should buy this,” ask questions before you take action. Think about the population that is actually being represented before you start modifying your understanding. Accept the limits of small sample sizes from large populations. And don’t give power to anecdotes.

Madbull
Posts: 66
Joined: Thu Sep 26, 2013 11:01 am

Re: Durable Power of Attorney: Implementation Report

Post by Madbull » Sun Sep 02, 2018 11:47 am

I just saw this thread. Just to toss in my experience in the slim chance it helps anyone in their/their parents future planning....

4 years ago, while my then 64yo mother was in the process of being diagnosed with MCI/Alzheimer’s, she had an elder-care attorney draw up a Will, DPOA, Healthcare POA, Disposition of Remains, HIPAA Release, etc, the whole package.

Her pension plan here in Texas accepted her DPOA no questions asked. (It was submitted at same time as retiring early due to her diagnosis, and in person. I’m also an active member in this same pension system, so that might have helped?)

Her pension plan in California is a headache. DPOA was submitted 2 years ago. Currently going through “We have no records of this” with them. New copies submitted, and have been awaiting their legal to review for a couple weeks now. They wanted their in-house DPOA form used, but that’s kind of hard considering she doesn’t understand what she’s signing anymore. Yet, they can’t seem to grasp that concept?

Her most-recent former employee accepted with no issues. She has her healthcare supplement plan through them, and this is the third year I’ve handled her Open Enrollment & her tax withholding selections with no problems. (I work for this employer as well, so again, possibly helps?)

Her credit union accepted with no issues. I am also joint on her account, and pay all her bills.

I’ve been lucky that the only ‘drama’ has been with her out of state pension. Which is kind of funny, as she selected the option when she left there of all payments cease upon her passing, no changes allowed, and I’m named to get a very small burial benefit that ‘might’ cover the flower spread at her service, lol. Yet I’m getting road blocked trying to adjust her tax withholding, the one thing I am supposed to be able to do.

If she had assets, I can only imagine the issues I’d be running into. Lucky for me, she lived a simple life and has nothing really being left to deal with when this disease eventually takes her. If she did, I don’t think the DPOA would be the way to have gone.

afan
Posts: 3759
Joined: Sun Jul 25, 2010 4:01 pm

Re: Durable Power of Attorney: Implementation Report

Post by afan » Sun Sep 02, 2018 11:58 am

Longruninvestor wrote:
Sat Sep 01, 2018 9:03 pm

My chosen executor will be a joint account holder on just one of my checking accounts, which will have enough money in it to pay funeral expenses and a few other immediate term bills; the rest of my cash will be probated along with my house. Retirement accounts and after tax Investments will be transferred on death via beneficiary rules to all of my kids. The "better maneuver" you're referring to of giving permission to write checks on the account is, I presume, a POA. A POA only works when the account holder is alive, while the joint ownership will endure and provide my executor with immediate control and access to a limited amount of cash. My objective in all of this is to make his life easier when the time arrives. My dad had the same objective for me and he listened attentively when an attorney he met an estate planning seminar extolled the virtues of a trust. And my dad spent good money on that trust, but the trust made my task harder and I'm going to take a different path. I understand there's some risk involved with a joint registration with my son or daughter, however, I believe the benefits outweigh the risks. My dad's trust has given me a massive amount of work: I got to fill out forms by the dozen and send envelops through the mail to my mom so she could sign stuff and mail it to other places. And this trust gave me the opportunity to spend hours in banks waiting for bankers to notarize signatures and apply medallion guarantee stamps. I've spent hours on the hold waiting for estate representatives at fidelity and Schwab. This trust that was supposed to make my life so easy has, in the end, only benefitted the attorney that got paid for creating it. There's a better way and I'm taking it.
Sound like there were major problems with the trust itself. I have managed a trust for an elderly person, before and after death, with no hassles at all. The trust was a revocable living trust, so already established and funded before death. In the waning years I helped the person transfer assets to the living trust. No signature guarantees required. After death the only hassles were for things that had not made it into the trust.

I found that, although I had handled the finances for years before passing, I had no idea what the costs would be after death. We had to get the house emptied out, repaired and prepared for sale, and pay final state and federal taxes. The state estate tax was entirely new to me. If I had been forced to guess what the total would be I would have been in trouble. The final amount was much more than I would have thought. But since all the assets were in the trust, it did not matter. As trustee I could pay the bills using the total amount the decedent had.

I should be clear that, except for the house, which was in trust as well, everything that was in the trust was in a single trust account at one broker. After death there was no need to move money around.

The checking account was also a trust account and I was trustee, so there was no POA involved. A DPOA would have expired at death. My status as trustee did not change.

In your plan I gather there will some cash in a joint account and more cash that will go through probate. The assumption is that the cash in the joint account will be enough for short term bills, the rest of the cash will be available once the executor is named? And the assumption is that these two sources of cash will be enough to pay all final bills and taxes? Based on that, everything else will bypass the estate and, if all goes well, there will be no need to get any of that money back. Is that the plan?

I suppose it might work, but it places a lot of importance on the accuracy of the projected final costs. If expenses mount late in life, as often happens, then the amount of cash might not be enough. Plus it requires holding this money in cash to cover those expenses.

I don't see how that is better than having all the money available. If you are planning to send some of your assets through probate as it is, what is gained by having some of it pass outside probate?
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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