Do we need a trust? (MIL to keep extended family away from assets)

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sunny_socal
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Do we need a trust? (MIL to keep extended family away from assets)

Post by sunny_socal » Wed Oct 23, 2019 2:20 pm

So my MIL has two daughters and three grandchildren. They are mentioned in her will.

Her husband (FIL) suffers from Alzheimers and is generally very frail, has moments of lucidity but most of the time is either sleeping or in a stupor (cannot converse, isn't really sleeping or awake.) MIL is very concerned that someone in the extended family will soon attempt some dirty tricks to take over their savings and property based on past experience with other family members:
- Wait until there's an emergency
- Go to FIL with a modified will and have him sign it
- Ransack the house or move in as squatters

Sounds like Jerry Springer? Yes it does but it has actually happened on two occasions on my wife's side. And some of the newcomers (by marriage) have already been walking around the MIL's house picking out furniture and have openly said they're waiting until the grandparents pass so they can move into their house.

Anything that can be done to add some legal protection? Would a trust be helpful in this situation? My MIL is interested in seeing her desires carried out as currently prescribed without risk of alteration.

clip651
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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by clip651 » Wed Oct 23, 2019 2:31 pm

I have no advice to share. It's unfortunate that circumstances seem to dictate worrying about this.

But just to clarify for those that do have advice - do MIL and/or FIL still live in the house in question? Or are they in assisted living or some other living arrangement? Do they have trusted relatives coming and going? Do they have paid helpers coming and going?

best wishes,
cj

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by sunny_socal » Wed Oct 23, 2019 2:33 pm

clip651 wrote:
Wed Oct 23, 2019 2:31 pm
I have no advice to share. It's unfortunate that circumstances seem to dictate worrying about this.

But just to clarify for those that do have advice - do MIL and/or FIL still live in the house in question? Or are they in assisted living or some other living arrangement? Do they have trusted relatives coming and going? Do they have paid helpers coming and going?

best wishes,
cj
They still live in the house and refuse to even consider assisted living or paid help. No one consistently comes to visit, my wife flies out there every few months. (Some of the gold-diggers will occasionally stop by when they need a car redeemed from the impound lot!)

HomeStretch
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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by HomeStretch » Wed Oct 23, 2019 2:47 pm

Sorry to hear as it sounds like your MIL feels unsafe in her own home. Are MIL’s concerns valid? If so, what are the daughters doing to protect their parents from family opportunists? ETA: If MIL/FIL are really being preyed on, moving them to a location near you is probably the best (not easiest) solution.

On a practical note, with MIL’s agreement, I would change the house locks, install a safe for small valuables/wills/ checkbooks/ATM cards, go paperless for statements, change ATM PINs/account passwords if necessary, and add whatever alerts possible to their bank/brokerage statements.

Then I would have a one-on-one with each of the opportunists...
Last edited by HomeStretch on Wed Oct 23, 2019 2:50 pm, edited 2 times in total.

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by Doom&Gloom » Wed Oct 23, 2019 2:47 pm

I have no advice to share either, but my MIL had a similar situation. One of her more distant relatives even told her a few years ago that the next time she came to visit she wanted "to put my name on" the items she wanted. In addition, MIL's three children really don't have much trust in each other. Some of MIL's grandchildren added another layer of complexity as some would periodically ask MIL for cash that she didn't want to give them.

Primarily for unrelated reasons MIL set up a trust a few years ago. Since that time all of her anxieties and many of her frustrations have disappeared. Just an anecdotal report FYI. I'm sure others will chime about whether a trust is appropriate for your MIL's situation.

Good luck. These family situations are tough to watch unfold right in front of your eyes.

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by sunny_socal » Wed Oct 23, 2019 3:14 pm

HomeStretch wrote:
Wed Oct 23, 2019 2:47 pm
Sorry to hear as it sounds like your MIL feels unsafe in her own home. Are MIL’s concerns valid? If so, what are the daughters doing to protect their parents from family opportunists? ETA: If MIL/FIL are really being preyed on, moving them to a location near you is probably the best (not easiest) solution.
Have discussed a move many times. They could sell their house and buy a home near us with cash. But they don't want to move ("We like our grocery store, we like our current doctor...")
On a practical note, with MIL’s agreement, I would change the house locks, install a safe for small valuables/wills/ checkbooks/ATM cards, go paperless for statements, change ATM PINs/account passwords if necessary, and add whatever alerts possible to their bank/brokerage statements.

Then I would have a one-on-one with each of the opportunists...
The MIL has mentioned changing locks but then never followed through. ("I didn't want to upset anyone")

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by RickBoglehead » Wed Oct 23, 2019 3:23 pm

If the FIL has Alzheimer's, do you have a formal declaration of incompetency? Is there a POA, and if so who is it?

Normally, either a doctor or doctors would write letters stating incompetency, and the POA would take effect. Or, you get a court to declare him incompetent. Then, the person with POA takes over his affairs. He can therefore sign nothing.

You could have the doors rekeyed and hand your MIL the new keys.

You can meet with an attorney, and be declared guardian of your MIL.

You can meet with an attorney, and move all the assets including the home into a revocable trust, with your wife as the trustee. However, MIL could still revoke the trust.

Seems like meeting with an attorney should be high on the list.
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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by Tamarind » Wed Oct 23, 2019 3:56 pm

This is tricky because it sounds like MIL is anxious, perhaps with very good reason, while not being willing yet to make the kinds of changes that would actually protect her from the outcomes she fears.

You cannot stop a relative who has a key from coming in unless you change the locks, cannot protect your husband's property without taking legal action, etc.

For your wife to "just change the locks" as someone above suggested would not really help, IMO, because the thing MIL fears is loss of control. It's likely she would be angry if her daughter did that without consent even if she wants the walk-throughs to end.

I think your wife could help her mother make a list of what's needed, and offer to come out and help implement when MIL is ready. That might include:

*Ensure MIL has access to and legal control of FIL's assets. Guardianship or other declaration of incompetence if necessary.
*Transfer FIL assets to trust, with documents properly filed with state
*Change locks, change phone numbers, secure windows and garage if applicable
*Update statement delivery to reduce chance of identity theft
*Alert local police to presence of a vulnerable elder being targeted
*Connect MIL with elder lawyer or other advisors for ongoing support
*Ensure MIL has necessary estate planning documents, including will and PoA.

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by bubbadog » Wed Oct 23, 2019 4:11 pm

We set up a trust for my mother about 8 years ago after my father died. We had the same concerns about friends/relatives as the OP. My father's relatives knew he was fairly well off and my mother welcomed the idea of putting her assets into an irrevocable trust.

Now her standard response is that she doesn't have anything to give as all of it is handled by her children. I have yet to get that call asking for money. Most of her major monthly expenses are paid for through the trust. I think she prefers the simplicity of not having to keep track of her monthly bills.

If she needs a larger bolus of funds for trips/christmas/etc., we transfer the funds to her checking account. So far it has worked out well for us with no real issues.

I will mention that this is an irrevocable trust. It requires a huge leap of faith on the parent. A lot of older adults probably wouldn't be comfortable with an irrevocable trust.

Best of luck with your situation sunny_socal

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by smackboy1 » Thu Oct 24, 2019 9:55 am

sunny_socal wrote:
Wed Oct 23, 2019 2:20 pm
Anything that can be done to add some legal protection? Would a trust be helpful in this situation? My MIL is interested in seeing her desires carried out as currently prescribed without risk of alteration.
The answer to this question is beyond the scope of this forum because so much depends on details and facts:

My advice is to seek out an experienced elder law lawyer immediately.

It's possible that transferring all MIL and FIL's assets to an irrevocable trust with a professional trustee as trustee could be a solution. An institution can be absolutely objective about the best interests of the beneficiaries, and free from family pressure and influence. That way MIL and FIL and both daughters can sleep better at night.

Did MIL and FIL execute durable POAs as part of their existing estate plan? A durable POA does not require incompetency of the principle to have effect.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by CAsage » Thu Oct 24, 2019 7:27 pm

My neighbor is dealing with a similar issue = except her Mother's caregiver is eyeing her house! Definitely suggest documenting (via a Dr or two) that FIL is no longer mentally competent to sign anything, setting up a trust for the assets, or finding a way to have someone you really do trust (or both daughters?) empowered to manage the money and cross check each other. Of course, then you can tell everyone that it's in an irrevocable trust (whether that's true or no.... tell them!), that FIL cannot sign anything anymore that would survive legal challenge, and your MIL can truthfully say that so-and-so manages the cash and she no longer worries about all that. My brother managed my Mom's Vanguard account, and just transferred whatever she needed monthly to her checking account, and we all slept better. I would hope a lawyer could sort this out, I ain't one.
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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by an_asker » Thu Oct 24, 2019 8:55 pm

sunny_socal wrote:
Wed Oct 23, 2019 2:33 pm
[...]They still live in the house and refuse to even consider assisted living or paid help.[...]
Story of everyone's life I think!!

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by rterickson » Fri Oct 25, 2019 3:50 pm

Has anyone actually spoken to the offending relatives and told them that they're not getting anything?

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by bsteiner » Fri Oct 25, 2019 4:01 pm

If FIL is competent but concerned about being preyed upon, he could create a trust for his own benefit that he can only amend or revoke with the consent of some trusted person(s).

MIL's Will should provide for FIL in trust rather than outright.

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by oldcomputerguy » Sat Oct 26, 2019 4:34 am

This topic is now in the Personal Finance forum (legal issues that have a financial component).
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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by michaeljc70 » Sat Oct 26, 2019 12:47 pm

I heard a similar story from a friend just weeks ago. His mother had passed away and a daughter moved into the house and wouldn't leave. She had to be evicted. In the end, she destroyed the house on her way out rendering it almost worthless.

I agree that the FIL should be declared not competent and that seems like it will eliminate some of the problems (family members getting him to sign things). Beyond that, I am not sure a revocable trust would help as it can be changed just like a will. I would consult a lawyer specializing in estate planning. Another thing they can do, depending on the assets and state, is do POD. I have no will but just about everything of value has a POD. Obviously this doesn't cover personal property like furniture, clothing, pots and pans, etc. It can cover (at least in my state) bank accounts, investment accounts (including IRA), a home, etc. Since that covers 95% of my net worth, I am not worried about who gets my pots and pans. As I understand it POD supersedes a will.

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by afan » Sat Oct 26, 2019 2:33 pm

The most important steps would be seeing an attorney and protecting the physical assets of the house and contents.
Attorney should design the legal protection plan. This would include blocking relatives from somehow getting FIL's name on a will. It might include putting the assets in a trust with either the trusted children as trustees or a professional trustee. The family members not included as beneficiaries of the trust would get nowhere with a bank or trust company, which would simply follow the terms of the trust.

If MIL or the children do not have FIL's DPOA, then it may be too late for him to give it to anyone. The attorney would have to determine how to move FIL's assets out of reach.

Changing locks sends a message but if the couple does not move, the freeloaders can still drop by and if let in, can take things. May want to move any truly valuable articles out of the house. Safe deposit box or homes of the daughters.
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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by CedarWaxWing » Sat Oct 26, 2019 3:32 pm

There are some resources on elder abuse that all folks with at risk elders in the family may want to read through:

https://ncea.acl.gov/

https://www.elderabusecenter.org/

https://www.cdc.gov/violenceprevention/ ... urces.html

Police departments may not be of much help unless there is physical abuse and injury risk. They tend to be pretty busy with other crimes, and frankly, the police departments do not prioritize the kind of elder abuse that your MIL and FIL seem to be at risk based on your description.

As already stated, you do need an elder abuse attorney and it will be very difficult to protect your MIL from people in her locality if she is not able to understand her situation. Sooner or later it is likely that some "threshold event" will occur that will make it necessary to accelerate protective action unless you can get your MIL to help you take less urgent steps at this time.

If your MIL has two trusted offspring that can work together on this it will be much easier to keep checks and standards on each other so the untrustworthy family members cannot cause problems due to their distrust of the situation.

My MIL has had a similar problem... except the abuse was from a "friend". MIL lived about 130 miles from us, and her only close offspring was not able or willing to keep tabs on things so we did move MIL up to our town (in an appartment with assisted living).

We already had had her funds and accounts placed into a trust, and my spouse and one of her brothers managed her financial affairs together, including reviewing and paying all of her monthly bills, making sure all her retirement incomes went directly to her bank accounts, etc.

My spouse also visited her for at least one weekend per month to help with house cleaning, grocery shopping, keeping tabs on her ability to do her own personal care tasks ("ADLs" = Activities of Daily Living), etc.

When someone who was supposedly helping her started charging things on her CC for his personal use we called the police and had her moved up here with us. My spouse and her brother co manage her finances, and have POA for all her affairs between the two of them. Other siblings get quarterly reports and communications in regards to any significant changes in MIL's status, medical/financial/social for concurrence on plans to deal with these issues as they arise.

It is common for an elder to not fully understand their risks for abuse, financial or otherwise... so it may be difficult, but necessary to start consulting an attorney at this time so the MIL can allow someone worthy of her trust to get POA of all her affairs while she is still legally competent to sign off on these things.

It was necessary for her to also update her will while she was able to do... because she sold her house and a lot of unneeded accumulated "stuff"... and put all of her funds "sold" asset dollars into her portfolio, managed by the brother. Thereafter she never had to give a thought to her own safety, and she is much easier to take care of here in town. With age most of her real long term friends had passed away, and someone in the family sees her every day.

Good luck... I am sorry she and you are having to go through these things... She is lucky to have you folks.

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by bsteiner » Sat Oct 26, 2019 4:13 pm

michaeljc70 wrote:
Sat Oct 26, 2019 12:47 pm
... the FIL should be declared not competent ...
Guardianships are cumbersome so they should only be used as a last resort.
michaeljc70 wrote:
Sat Oct 26, 2019 12:47 pm
... I am not sure a revocable trust would help as it can be changed just like a will. ...
The solution is a trust that he can only revoke with the consent of one or more highly trusted person(s).
michaeljc70 wrote:
Sat Oct 26, 2019 12:47 pm
.... Another thing they can do, depending on the assets and state, is do POD. ... As I understand it POD supersedes a will.
That's the problem with TOD and POD. They can easily destroy the estate plan. Also, in this case, the wrongdoer can persuade him to change the beneficiary designations.

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by michaeljc70 » Sat Oct 26, 2019 6:41 pm

bsteiner wrote:
Sat Oct 26, 2019 4:13 pm
michaeljc70 wrote:
Sat Oct 26, 2019 12:47 pm
... the FIL should be declared not competent ...
Guardianships are cumbersome so they should only be used as a last resort.
michaeljc70 wrote:
Sat Oct 26, 2019 12:47 pm
... I am not sure a revocable trust would help as it can be changed just like a will. ...
The solution is a trust that he can only revoke with the consent of one or more highly trusted person(s).
michaeljc70 wrote:
Sat Oct 26, 2019 12:47 pm
.... Another thing they can do, depending on the assets and state, is do POD. ... As I understand it POD supersedes a will.
That's the problem with TOD and POD. They can easily destroy the estate plan. Also, in this case, the wrongdoer can persuade him to change the beneficiary designations.
POD can be part of the estate plan thereby not destroying it.

The FIL does seem incompetent. The relatives could have him co-sign for a loan or any number of other things. How are you going to prevent that? The relatives seem devious. Putting the assets in a revocable trust won't prevent potential claims against it say from creditors.

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Re: Do we need a trust? (MIL to keep extended family away from assets)

Post by Nowizard » Sun Oct 27, 2019 10:21 am

This sounds like a situation where planning and pragmatics play a role. On one level, though the specifics are different, this is an issue of dealing with aging parents or relatives, along with the common occurrence where one or more are resistant to the perceived need by others for change. In this case, one spouse is apparently incompetent legally, the other legitimately concerned and legitimately worried about being taken advantage of based on family history. It should be remembered that the wife is also older, dealing with substantial day-to-day stress caring for herself and her spouse. She may be mildly compromised herself due to stress and age.
A consult with an elder-focused attorney might be wise. Are there trusted relatives who could be involved in convincing the competent spouse of the need for change? How quickly is her spouse declining? Would a visit to his physician aid in planning for a move? A pragmatic solution could involve a move to a facility with independent, assisted, nursing and memory care options, combined with a Trust and selling the house. Though more information and much convincing would be required to validate this possible option, the most obvious fact is that there are competing elements and the most aggressively focused responses will likely determine the outcome. Good luck with a very delicate situation. Unfortunately, it is fairly common, but that also means there is information and experienced people to aid if assertive.

Tim

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