Category: Family Relationships (Page 5 of 6)

Addressing the 800lb gorilla: Most financial scammers of the elderly are family.

October 24, 2019 / drussellcfp

A recent Barron’s article discusses ways in which adult children can protect their parents from financial fraud. Elder Financial Abuse is estimated to defraud older Americans of somewhere between the disparate estimates of $3Billion to $35Billion a year. The large disparity is due to the number of data sources, and estimations of unreported abuse, but suffice it to say, it is a problem.

While the elaborate means scammers take to defraud our aging parents of their resources are popular to write about, focusing on these threats ignores where 85-90% of defrauding takes place – within the immediate family of the victim. According to a report by the National Committee on Aging,

Over 90% of all reported elder abuse is committed by an older person’s own family members, most often their adult children, followed by grandchildren, nieces and nephews, and others.
Source: National Committee on Aging

My friend and colleague, Cynthia Healy, has years of experience investigating elder financial abuse, and she produced this short segment on family theft. Other resources can be found on her website gogrey.com.

The best way to address this 800 lb gorilla is to teach the virtue of honor in our family systems, and specifically how honor shapes the attitudes or actions that we take towards our elderly parents and/or their resources. Much of the familial elder financial abuse is subtle and occurs out of a sense of entitlement, the perpetrator justifying his actions under the guise of “mom won’t miss this.”

Still for those adult children who do honor their parents and their parents’ possessions, these articles offer practical and relational advice.

To help aging parents protect themselves, their grown children must tactfully broach the subject of their vulnerability. The key is to adopt an attitude of empathy and non-judgment, says Amy Nofziger, director of fraud victim support at AARP, an advocacy organization for older Americans. “Always start the conversation with empathy and compassion, and don’t be paternalistic,” she advises.
Source: Advisors Offer Precautions on Keeping Financial Scammers Away. – Barron’s

Daughter of woman whose partner predeceased her mother by 12 days, in court fight over inheritance.

September 26, 2019 / drussellcfp

A woman fighting for her multi-million dollar inheritance might have to forfeit the entire fortune to charity thanks to a poorly-written will — a case that has raised questions about the rights of unmarried gay couples and their children.

Jill Morris, died of breast cancer in 2016 at age 84 and left a multi-million dollar estate to her long-time partner, Joan Anderson, with whom she had an 18 year relationship. Anderson died of a stroke just 12 days after Morris, and, according to Morris’ last will and testament, her estate was to be divided among three charities if Anderson did not survive her by thirty days.

A Manhattan Surrogate Court Judge has ruled that the estate belongs to the charities. Emlie Anderson, Joan Anderson’s daughter claims the judge should have known that Morris would not have included such “harsh wording in her will.”

It’s upsetting to me. It’s like they’re trying to negate my mother and her relationship with Jill, she told the Daily News. That’s what they’re saying, that their relationship wasn’t important.

Source: Woman fighting for late mother’s inheritance plans to appeal after Manhattan judge decides multi-million dollar fortune should go to charity – New York Daily News

What is your honor code?

September 18, 2019 / drussellcfp

Sometimes hearing a familiar principle from a different cultural context makes it seem more interesting, less banal; the same way that eating pizza prepared by a street vendor in Rome would taste better than my local delivery pizza simply because it was made in Rome. Most westerners are familiar with the fifth commandment in the Bible:

Honor your father and your mother, as the LORD your God has commanded you, so that your days may be long and that it may go well with you in the land the LORD your God is giving you.
Deuteronomy 5:16

However, other cultures and traditions also incorporate the concept of honoring elders into their belief systems as well.

Take also the concept of Filial Piety – one of the eight virtues of Confucianism. Scholars attribute the Eight Virtues to a line in the Sage Emperor Guan’s Book of Enlightenment:

“It is through Filial Piety, Sibling Harmony, Dedication, Trustworthiness, Propriety, Sacrifice, Honour, and Sense of Shame that we become fully human.”

Filial Piety means to be good to one’s parents; to take care of one’s parents; to engage in good conduct not just towards parents but also outside the home so as to bring a good name to one’s parents and ancestors. The Fung Loy Kok Institute of Taoism expounds on this general definition:

What is filial piety? There are many aspects of filial piety. The most important of them is to honor your father and mother and attend to their needs.
By “honor” it is meant that you should maintain good conduct and never do things which will shame your parents or make them unhappy.
You should be hard working in family affairs.
You should be frugal in spending and not waste family resources.
Siblings should live in harmony.
In your interactions with other people you should be honest and sincere. Do not be deceitful. In all your actions be humble, be courteous and considerate of others, be proprietous and refrain from shameful thoughts and actions.
You should also attend to your parents’ well-being. There are three basic needs you must provide for your parents. First, you should provide for their food and clothing. Second, when they are ill, you must take responsibility for nursing them back to health. Third, when they die, you must provide them with proper burial and care for their graves.
As a son or daughter, whether you are rich or poor, whatever profession you are engaged in, whether you are married or not, whether you have children or not, if you can perform these three deeds with sincerity and dedication, your parents will be happy while they are alive and rest in peace when they are deceased. Your parents cared for you without selfish interests. Your mother carried you in her womb for ten lunar months and nursed you for three years. Your parents constantly tended to your needs while you were growing up. You should show your gratitude to them by fulfilling the virtue of filial piety. Filial piety has many aspects. As long as each is performed with all your heart, this virtue is fulfilled. Whatever you do for your parents, do it with goodwill and sincerity.

I think we can all agree that the world could use a little more Filial Piety.

Estate Planning Pitfalls for Older Couples Living Together.

September 16, 2019 / drussellcfp

An increasing number of Americans ages 50 and older are in cohabiting relationships, according to a new Pew Research Center analysis of the Current Population Survey. In fact, cohabiters ages 50 and older represented about a quarter (23%) of all cohabiting adults in 2016. One reason could be the adult children’s rejection to their older parent’s marriage, especially if the relationship formed soon after the death of the other parent. Approximately 23% of cohabiters over age 65 are widowed.

However, as with many things in life, what seems simple — living together — is often quite complex. Unmarried couples, of all sexual orientations, can face a variety of problematic and emotionally difficult issues because estate planning laws are written to favor married couples.

Unmarried partners need to consider the following issues related to estate planning and living together:

Medical incapacity: In the absence of a durable power of attorney for healthcare, non-married individuals may be treated as “legal strangers” and unable to make healthcare decisions on behalf of their partner.
Living arrangements: If the wealthier partner dies or becomes incapacitated with no provision for the other partner to remain in the home (by a will or title) the other partner can be forced from the home by blood kin.
Dying without a will: Intestacy laws (state laws that determine where a deceased’s property goes when there is no will) are not favorable to unmarried partners.
Employer Retirement Plans: Plans like 401k’s, profit sharing, and pension plans, as well as group life insurance plans are governed by a federal law known as ERISA. This law requires that a spouse be the beneficiary of these plans in the event of the employee’s death unless waived by the spouse. No such protection is afforded unmarried partners unless the partner is listed on the Plan’s beneficiary form.

For more, see Brad Wiewel, The Legal Dangers of Living Together, Next Avenue, August 28, 2019.

I’m Trustee For My Parents’ Trust – Now What?

September 9, 2019 / drussellcfp

So, your parents have a trust, and you’ve just found out that you are the trustee. Do you thank them or did they reward you with the booby prize? A trustee is held to a high standard of accountability and must act in accordance with an established standard of care as outlined below. To fail in one or more of these – called a breach of fiduciary duty – is to invite litigation and sometimes results in broken family relationships where a family member is also the trustee. Professional trustees, like banks with trust departments, or corporate trustees will be given very little leeway if they fail in any of these duties, but untrained family members or individuals who find themselves in this unenviable position are often not excused for lack of knowledge either.

Duty of loyalty. A trustee has a fundamental duty to administer a trust solely in the interests of the beneficiaries. A trustee must not engage in acts of self‐dealing.
Duty of administration. The trustee must administer the trust in accordance with its terms, purposes, and the interests of the beneficiaries. A trustee must act prudently in the administration of a trust and exercise reasonable care, skill, and caution, as well as properly account for receipts and disbursements between principal and income.
Duty to control and protect trust property. The trustee must take reasonable steps to take control of and protect the trust property.
Duty to keep property separate and maintain adequate records. A trustee must keep trust property separate from the trustee’s property and keep and render clear and accurate records with respect to the administration of the trust.
Duty of impartiality. If a trust has two or more beneficiaries, the trustee must act impartially in investing, managing, and distributing the trust property, giving due regard to the beneficiaries’ respective interests.
Duty to enforce and defend claims. A trustee must take reasonable steps to enforce claims of the trust and to defend claims against the trust.
Duly to inform and report. A trustee must keep qualified trust beneficiaries reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests.
Duty of prudent investment. A trustee who invests and manages trust property has a duty to “invest and manage trust property as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust.

Much like the position of Executor, the role of Trustee is not to be accepted lightly and can often be a lifetime of responsibility. If you are not comfortable serving in this capacity, discuss this with your parents now so that alternate plans can be made.

Trusts are excellent vehicles for protecting an estate from creditors, transfer taxes, or misbehaving heirs. Their operation may be simple or complex, but it is incumbent upon you to talk to your parents about their trusts, and especially who the parties are if you are in the role of financial caregiver.

Source: American Bankers’ Association.

Why Aren’t More Women Working? They’re Caring for Parents

September 5, 2019 / drussellcfp

A recent New York Times article profiles the lives of women who have no other option than to drop out of the work-force to care for an aging parent, at significant cost to the economy.

The burden of care for aging relatives is reshaping the lives of millions of others. About 15 percent of women and 13 percent of men 25 to 54 years old spend time caring for an older relative, according to the Labor Department. Among those 55 to 64, the share rises to one in five Americans. And 20 percent of these caregivers also have children at home.

Yes Virginia…This is a Holiday Inn

September 4, 2019 / drussellcfp

According to a study released by the U.S. Census Bureau, more Millennials are living with their parents more than in any other living arrangement, with one in three 18-34-year-olds living at home. Add to this the fact that according to The National Alliance for Caregiving, about 34.2 million Americans have provided unpaid care to an adult age 50 or older in the last 12 months, and you have the classic description of the sandwich generation.

Among the findings from the Census Bureau study:

In the 1970s, 8 in 10 people married by the time they turned 30. Today, not until the age of 45 have 8 in 10 people married.
In 2005, the majority of young adults lived independently in their own household, which was the predominant living arrangement in 35 states. A decade later, by 2015, the number of states where the majority of young people lived independently fell to just six.
More young men are falling to the bottom of the income ladder. In 1975, only 25 percent of men, aged 25 to 34, had incomes of less than $30,000 per year. By 2016, that share rose to 41 percent of young men. (Incomes for both years are in 2015 dollars.)
Between 1975 and 2016, the share of young women who were homemakers fell from 43 percent to 14 percent of all women aged 25 to 34.

And the one that really sticks out to me…

Of young people living in their parents’ home, 1 in 4 are idle, that is they neither go to school nor work. This figure represents about 2.2 million 25- to 34-year-olds.

Reminds me of this classic commercial.

Brady Bunch Estate Planning: Balancing the Duty of Loyalty

September 3, 2019 / drussellcfp

It is a well established principle of trust law that trustees are fiduciaries who owe specific duties to the beneficiaries of a trust. These duties can be grouped into duties of loyalty and duties of care.

But what if a trust has beneficiaries with adverse interests to one another? It is not uncommon for a trust to have two kinds of beneficiaries – a current beneficiary as well as a remainder beneficiary. That is, the current beneficiary may have rights to the income from the trust, and perhaps even discretionary rights to the trust’s assets (also known as the trust principal or corpus); whereas the remainder beneficiary may have rights or equitable interest in what is left in the trust (the remainder) after a period of years or upon the death of the current beneficiary. These adverse interests can test the mettle of most individual or family trustees as both beneficiaries are owed duties of loyalty and care.

Suppose Mike Brady created a trust to take effect at his death. His trust includes the following (summarized) instructions:

At my death, my trustee shall pay to my surviving spouse the net income from my trust for as long as my spouse shall live.
In addition to the net income, my trustee may also pay to my surviving spouse from the trust’s principal, as much as my trustee shall deem necessary to maintain my spouse in [her] accustomed standard of living.
Upon my spouse’s death, my trustee shall distribute my trust to my surviving children (Greg Brady, Peter Brady, and Bobby Brady) in equal shares.

Now supposed that when Mike Brady dies, Carol Brady is appointed to serve as trustee of Mike’s trust. Or, perhaps Mike’s oldest son, Greg, is appointed as trustee. This is not only permitted but done frequently, presumably to avoid paying a professional trustee. The conflicts to the Duty of Loyalty are obvious.

For example, if Carol Brady is trustee, it stands to reason that she would want to maximize current income from the trust while minimizing principal growth. Likewise, if Greg is trustee, he would want to maximize his ultimate share of the trust by investing for growth rather than income. In addition, asking either party to objectively define “accustomed standard of living” puts them both in awkward, if not conflicting positions. Should Alice’s services as a live-in housekeeper continue to be paid after everyone has moved on? Carol could certainly argue that the expense met the accustomed standard of living test, but would Greg require Carol to pay for it herself, or would he deny it saying it wasn’t necessary any longer?

Perhaps when Mike and Carol were in the attorney’s office, their response to these hypothetical situations was typical. “Oh our kids would never argue over this.”

It is possible to be loyal to both beneficiaries even if there are adverse interests. However, doing so requires a great deal of objectivity, scrutiny, and immunity to emotional persuasion. A wise trustee will establish clear expectations and open communication early in the relationship to avoid favoring one beneficiary over the other and risk breaching the duty of loyalty.

Caregiver Burnout

August 28, 2019 / drussellcfp

What is caregiver burnout?

Caregiver burnout is a state of physical, emotional and mental exhaustion. It may be accompanied by a change in attitude, from positive and caring to negative and unconcerned. Burnout can occur when caregivers don’t get the help they need, or if they try to do more than they are able, physically or financially. Many caregivers also feel guilty if they spend time on themselves rather than on their ill or elderly loved ones. Caregivers who are “burned out” may experience fatigue, stress, anxiety and depression.

What causes caregiver burnout?

Caregivers often are so busy caring for others that they tend to neglect their own emotional, physical and spiritual health. The demands on a caregiver’s body, mind and emotions can easily seem overwhelming, leading to fatigue, hopelessness and ultimately burnout. Other factors that can lead to caregiver burnout include:

Role confusion: Many people are confused when thrust into the role of caregiver. It can be difficult for a person to separate her role as caregiver from her role as spouse, lover, child, friend or another close relationship.
Unrealistic expectations: Many caregivers expect their involvement to have a positive effect on the health and happiness of the patient. This may be unrealistic for patients suffering from a progressive disease, such as Parkinson’s or Alzheimer’s.
Lack of control: Many caregivers become frustrated by a lack of money, resources and skills to effectively plan, manage and organize their loved one’s care.
Unreasonable demands: Some caregivers place unreasonable burdens upon themselves, in part because they see providing care as their exclusive responsibility. Some family members such as siblings, adult children or the patient himself/herself may place unreasonable demands on the caregiver. They also may disregard their own responsibilities and place burdens on the person identified as primary caregiver.
Other factors: Many caregivers cannot recognize when they are suffering burnout and eventually get to the point where they cannot function effectively. They may even become sick themselves.

What are the symptoms of caregiver burnout?

The symptoms of caregiver burnout are similar to the symptoms of stress and depression. They include:

Withdrawal from friends, family and other loved ones
Loss of interest in activities previously enjoyed
Feeling blue, irritable, hopeless and helpless
Changes in appetite, weight or both
Changes in sleep patterns
Getting sick more often
Feelings of wanting to hurt yourself or the person for whom you are caring
Emotional and physical exhaustion
Irritability

Source: Caregiver Burnout | Cleveland Clinic

Another Case of Sibling Rivalry

August 22, 2019 / drussellcfp

An Indiana Court of Appeals opinion underscores the importance of accountings in trust administration, but also raises questions about why families place siblings in adversarial positions to begin with.

According to an article posted by the Indianapolis law firm of Faebre Baker Daniels, the original case involved three siblings, Scott, Jeff and Stacey – and arose after Scott and Jeff began to question some of Stacey’s actions as trustee of their respective trusts – specifically, her handling of the trusts’ joint ownership of multiple parcels of real property. Shortly after the siblings executed a mediated settlement agreement and partitioned the properties, Scott sued Stacey, as trustee of his trust, alleging she failed to provide an accounting and had misused trust assets. Scott also alleged misappropriation of $107,000 of trust assets, which were characterized as trust expenses – which were in fact legal fees Stacey had incurred “years before the most recent trust-related litigation,” apparently with other family members.

One of the duties of a trustee (known as fiduciary duties) is to keep trust property separate and to maintain – and make available to trust beneficiaries – adequate records, which Stacey admitted she had failed to do. Unfortunately for Scott, he did not bring his complaint until after the two-year statute of limitations had expired, and the trial court found Stacey did not commit a breach of trust as to the accountings.

Scott also demanded reimbursement for his attorney’s fees for bringing the complaint against Stacey, which after being denied by the trial court was reversed by the Indiana Court of Appeals and Stacey was ordered to pay Scott’s legal fees.

While the crux of the case deals with a trustee’s responsibility to maintain adequate records and provide them to a trust’s beneficiaries, the real story in this case is the human one – that of a family of siblings now divided – at least partly – because one was put into an adversarial position with the others. I wonder if the trustee fee savings was worth it?

Source: Indiana Court of Appeals Opinion Upholds the Importance of Accountings in Trust Administration | Publications | Insights | Faegre Baker Daniels