The Sandwich Generation . . . Helping Your Aging Parents
by Carol Abaya, M.A.
August 13, 1999
Are you juggling doing errands for your aging parents, your children, yourself and working at the same time? Are you tired, stressed out and upset that your once vibrant parent is now frail and needy?
Do you feel alone? Rest assured you are not alone! The Sandwich
Generation is dedicated to the 50 million Americans who may have elder/parent
care concerns and/or responsibilities.
Protect Assets From Taxes
Question: My father, 69, recently sold his business (a retail store) and has a modest amount of cash, plus IRA money, life insurance and $50,000 in stock. He refuses to even discuss, much less do anything in relation to, estate planning. He says it's none of our business, and he knows what he's doing. He's being bombarded by various brokers and financial planners, who advise all kinds of complicated "plans." Guidance please.
Answer: Complicated and costly-to-establish estate plans often achieve little or nothing. With all the information "out there," it's easy to be confused and ill-advised.
Besides wanting to keep financial information to himself, your father may not want to admit he finds these decisions - which can be tough - confusing.
I'm not a lawyer, but here are some simple guidelines for him.
* Put down on paper all assets, the value, and how it is owned (e.g. with or without your mother). Most people have no idea what they really have.
* If total assets are more than $650,000, then some planning is warranted. If under, don't worry about it.
* If over $650,000, look at how assets are owned. It doesn't make any difference when one of your parents dies. But it will when the second does.
* Split asset ownership. Don't have everything in joint tenancy.
* Have a will that sets up a marital trust. That way, the assets of the survivor can be minimized. Yet the survivor will have the income.
* The owner of the insurance policy and the beneficiary should be the same. This takes it out of probate and avoids estate taxes.
* Don't set up a Revocable Living Trust expecting to avoid all taxes. They don't work that way, even though some planners say they will.
* If various properties are owned jointly, change deeds to read tenants-in-common, rather than joint tenancy. The deceased's share should go into the marital trust, with the survivor having life rights and the ability to sell.
By splitting asset ownership and establishing a marital trust by will, heirs can save thousands of dollars. Marital trusts established by a Testamentary Will are only beneficial if a couple's assets are not owned jointly. If all or most of the high valued assets are jointly held, then there will be no assets available to fund a marital trust when the first spouse dies.
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Question: My younger brother, who lives near my parents (82 and 87), has Power of Attorney for them. I live 500 miles away. They refuse to discuss their finances with me or tell me what they have. I have a right to know.
Answer: Sorry! You have no legal right to know if your parents don't want you to. It's their money, and they can do with it what they want as long as they are mentally competent. Your brother is responsible to your parents only and doesn't have to give you any information.
At the same time, you might tell your parents you are concerned. And you would like to know, in general parameter terms, if they will be financially secure in the long term or whether you should put aside some of your money for their eventual care.
If you think large sums of money are being taken by your brother, you can go to court now or after their death and ask for an accounting by your brother.
Do keep in mind that even though your brother may have POA, he may not be "exercising" it. Your parents can continue to handle their own finances and bills. My father handled all his affairs and paid household bills until six months before he died at 94. It was only then that I 'exercised' the POA.
Do you have a question? Send it in. Although letters cannot be answered individually, appropriate letters will be answered in this column whenever possible. Letters may be edited. Send letters to Ms. Carol Abaya, c/o Name\Address of YOUR newspaper or e-mail her at SandwchGen@aol.com.
Carol Abaya is an international-award-winning journalist and creator of the unique magazine The Sandwich Generation: You & Your Aging Parents.
NOTES TO EDITORS: text = 555 words; other material = 160 words
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