Advance planning for incapacity is an unpleasant topic. However, not planning for it can lead to a serious situation for the entire family. This is particularly true, when one parent is in charge of financial matters and refuses to recognize that their decision-making skills have deteriorated.
Forbes’ recent article asks, “What Can You Do When A Stubborn Aging Parent Refuses To Give Up Control?” The article explains what it took one family to get an aging parent out of the position as trustee and to permit the successor, the adult daughter, to take over.
The family saw signs of dementia and a family member’s financial abuse.
The trust provided that the parent could be removed as trustee, if two physicians declared him to be incapacitated for handling his own finances. In that case, a judge’s decision wasn’t required. The doctors verified that the elderly parent was incapacitated to safely handle his money. However, all this takes time and there is no guarantee that the doctors will find someone “legally incapacitated”.
A parent’s failure to listen to reason and stubborn refusal to resign as trustee when asked, can cost his children dearly. In that situation, a family may have to engage an attorney to resolve the problem. Our firm adopts a more client and family centered approach for families that are close and who have family members that can be trusted. The trust may contain a provision that allows a “disability panel” to determine when a client “can no longer effectively handle” his or her financial affairs. This will trigger the removal of the parent who no longer can handle financial affairs as trustee and the appointment of a successor trustee without court intervention or a doctor’s determination. Note that each client’s family and situation is different and an estate planning attorney should be consulted.
Remember that even if your aging parents are fine, there’s no time like the present to ask them to review their estate planning documents with you. Look at the terms that define what happens in the event of “incapacity.” Be sure that all of you understand what would happen, if impaired parents are unwilling to give up financial control and you have to institute the proscribed process to remove control from them.
Those who are named in a trust as the “successor trustee,” must know what that means and how much responsibility is involved. The family needs to recognize that financial elder abuse is a huge problem in our country, and family members are frequently the abusers. If you see abuse, and your elderly parent can’t resist the pressure to give money to any dishonest person, an elder law attorney will be able to give you worthwhile advice on the best approach, as well as the law.
For a family with an aging parent who never created an estate plan, speak with an experienced estate planning attorney. They have very likely helped families in your exact same situation and will have suggestions as to how to motivate your parent to put an estate plan in place.
Reference: Forbes (May 7, 2019) “What Can You Do When A Stubborn Aging Parent Refuses To Give Up Control?”