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by Carol Abaya, M.A.
GOOD INTENTIONS CAN EQUAL
DISASTER
1st of 2 Parts
Elderly women, especially widows, often create legal and
financial “monsters” and potentially disastrous
situations for themselves and their children.
They (both the elder and the sandwich generationer) think they are
taking positive steps to protect assets and to make things easier for the
sandwich generationer. But just the
opposite occurs. Additionally, certain
financial arrangements cause unrepairable rifts between siblings.
I am
not a lawyer. By using specific
examples, I can only point out weakness and potential problems.
Two
cases have come to my attention, which I want to share because of the possible
very severe negative repercussions. The
first is an 80-year-old woman, who has a lot of money and a daughter and
son. She is closest to her daughter, who
most closely shares her life values. The
mother has a major hearing problem, but is otherwise healthy and mentally
astute. The second is an 86-year-old
woman, who has limited assets and a son and a daughter. The elder is closest to her son. She has major health problems. Both women live a distance from their
children and have no nearby family support system. Both women did not want to “hurt the
feelings” of one child over the other.
So, while their intentions were to “do the right thing,” what was done
legally can explode in relation to family dynamics.
While I
have discussed the potential problems that could occur, neither has changed
what she had done. So, I want to share
with you all the complications that might develop in spite of good intentions.
Case
#1: In order to have her daughter help
her reconcile her monthly bank statements, the mother put her daughter’s name
as joint owner on several bank accounts holding several hundred thousand
dollars. In addition, both children
jointly have power of attorney.
These
actions mean that:
1. When the mother dies, the daughter gets all
of the money in these joint accounts and the son gets nothing even though the
Will states both children are to share everything 50/50. Ownership supersedes a Will. All the son has would be a possible lawsuit
against his sister.
2. If the daughter wants to “do the right thing”
and share the money with her brother, a number of tax issues arise. First, a person can only gift $11,000 a year
to someone else tax free. If more is
given, the giver (the daughter) would have to file a gift tax form with the
federal government. The “gift” negatively impacts the daughter’s future estate
as the amount “gifted” would reduce the amount she could Will
tax free.
3. The joint ownership might trigger major
problems for the mother. If the daughter
is involved in a nasty divorce situation or has creditor problems, those bank
accounts could be attacked. The mother
would have to find all the old bank records to show that the money was hers and
not the daughter’s. The mother would have
to testify, possibly in open court. This
could be an emotional disaster for the mother.
To be continued next week
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.
* * *
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,
mail direct to her at
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 = 577 words; other material = 160 words
We would appreciate it if you would include the "Globe Syndicate" bug at the end of the column.