“Mind Your Own Business”

“Mind your own business”. How often we have said that to our children or other heirs. That statement does not help those trying to help you when you can no longer handle your affairs on your own.

It is very important that you make the caregivers, or power of attorney aware of what resources you might have.

Case in point: Friends recently lost their elderly mother. She went from sassy, sharp and capable to nursing home and finally to hospice in under 2 months. In this time the eldest son was caring for her and handling her finances, only to find out that mom had a Certificate of Deposit and a small annuity that she had not mentioned. This is now creating problems as he waits for access to these funds to pay the funeral home and other bills related to her care.

If mom had been forthcoming, the son could have been named as a Transfer on Death on the Certificate of Deposit, bypassing probate and making those funds immediately available upon presenting a death certificate. Or mom could have established a Revocable Trust naming the sons as beneficiaries of the estate, thus bypassing the problems and the wait for funds they are facing now.

The annuity has been annuitized, so mom has been getting payments, with a remainder to heirs after her death. It is very possible that mom could have accessed the funds from the annuity in a different manner, and not annuitized it. This may have made it easier for the son to have access to it to now. As it stands, the family will have to wait about a year, receiving small payments, instead of receiving the remainder in a lump sum.

Nobody could have predicted how this would turn out, who needs access to funds, and how. However, by letting the people who will have to take over know where the money is, and how it can be accessed can make things much easier for them. When the probate court does not allow immediate access to funds, family will have to dig into their own pockets, hoping to be reimbursed later.

One more piece that was missing in this non-existent long term care planning: Mom did not put aside any money for a Funeral Trust. This is important as her funeral could have been paid for and the sons would not be in the position of having to jump through hoops and coming up with funds out of their pockets. An irrevocable burial trust pays about the same interest as a CD at your bank, but is immediately accessible to pay the funeral bill completely – even before the death certificate has been produced.

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