Jessica L. Gibbs, CFP® [00:00:52] Hi, everyone. This is Jessica. And I’m back with another episode of Off the Wall, the podcast aimed at helping founders, executives and high net worth investors build wealth with purpose. Today, we’ve got a two part episode focused on estate planning for aging parents, getting ahead of the little details that can lead to big headaches when you’re closing someone’s estate. And advice for those in the sandwich generation, which is a term used to describe adults who are simultaneously caring for their aging parents and their own children. This episode is really a continuation of a conversation we had last year on Off the Wall about caring for aging parents. In that episode we addressed a lot of the big blocking and tackling adult children can help their parents with. From financials and estate documents to long term care considerations and senior move management. I really encourage you to listen to the episode we released in August 2023 and we’ll link to that in the show notes. And if you’re looking for a written reference, we have a PDF Guide to Caring for Aging Parents, which we’ll also link to in the show notes. As I said, today’s episode will be in two parts. In part one Monument co-founder Dean Catino and I will talk with Catherine Schott Murray, Trust and Estate attorney at Odin Feldman Pittleman in Reston, Virginia. And in part two, I will talk with Monument’s Client Experience Team, Cecilia Gilliam and Cathleen Phelps, both of whom have firsthand experience helping Monument clients with their aging parents and helping their own parents. Lots of good insights in this episode, but here’s my general takeaway. Being part of the sandwich generation comes with a lot of anxiety and overwhelm. Having a team in place to help you: a wealth advisor, an attorney, an accountant can do so much to guide you through the process of caring for aging parents and reduce anxiety of the unknown. So with that, let’s dive into the episode.
Jessica L. Gibbs, CFP® [00:02:37] I’m here with Monument co-founder Dean Catino. Hi, Dean.
Dean J. Catino, CFP®, CPWA® [00:02:41] Hi.
Jessica L. Gibbs, CFP® [00:02:41] I and our guest, Catherine Schott Murray. Hi, Catherine.
Catherine F. Schott Murray [00:02:44] Hello.
Jessica L. Gibbs, CFP® [00:02:45] Catherine is a trust and estate attorney with Odin Feldman Pittleman. In addition to advising clients on the creation and implementation of simple and complex estate plans, incapacity planning and health care decision making, Catherine also focuses her practice on elder law and has been an active member of the National Academy of Elder Law Attorneys. She is also a member of the Sandwich Generation herself. So lots of expertise here to share with us all. So let’s dive into our first question.
Dean J. Catino, CFP®, CPWA® [00:03:15] So I’d like to jump off with a question, and it requires a little bit of framing, because every family situation, as we know, is unique. How often there are many shared foundational scenarios. It’s sort of a big question, and it’s one that I think many adult children struggle with. So here it goes. Let’s assume your parents are in relatively good health. They are financially stable. Cognitively stable as well. What is your recommendation on how adult children can start the conversation with their parents around not just their estate plan, but their assets and using them for long term care, end of life wishes, funeral wishes, tangible items that they want to leave to their heirs. I mean, the list is probably exhaustive, but I know you’ve got a lot of expertise. Help us with this.
Catherine F. Schott Murray [00:04:01] Thanks so much for that question because it is typically how I frame the beginning of an estate planning process, because it is a process that we’re on a timeline here. And you’ve started at the beginning of the timeline. Mom and dad are healthy. They’re well, they’re in their homes, they’re financially stable, but they’re aging. And everybody around them sees that they’re aging. And maybe there’s been a little misstep here and there. So I come at it from the perspective of if I have adult children coming to me and asking the question, well, how do I ask this question, mom and dad? It’s a goals and objectives question. Mom and Dad, what are your goals and objectives here? Do you want to stay in your home? Are you looking for assistance? How do you feel? How are things going? And beyond the goals and objectives, it becomes a thought about, well, who’s in charge? Very often, from the adult children’s perspective, there’s that one person who mom and dad maybe relied most upon. Maybe it’s one of the kids. Maybe it’s part of the team of advisors. I do have mom and dad who will say, Well, I’m just going to tell my kids they need to call Dean or they need to call Jessica if something happens to us. That’s a key person in the entire plan because perhaps and hopefully that key person has the ability to say, okay, I’m going to go from this phone call with mom and dad to everyone else. I know who to call next. I know to call the estate planning attorney. I know to call the CPA. Maybe I know to call the adult child.
Jessica L. Gibbs, CFP® [00:05:29] Knowing who to call, I think that’s also is a really good, important first step. But I think some of these things that Dean was listing off. I’m thinking in particular about using money that you’ve saved up for long term care or what you want for end of life wishes or your funeral. It’s a very emotional conversation. Do you have advice on how adult children can approach that in a very empathetic way with their parents if it’s a conversation that, it’s just tough to have for both parties.
Catherine F. Schott Murray [00:05:56] It goes back to the goals and objectives because people don’t want to talk about their mortality, quite frankly. But that is the one certain thing we have in life. The old joke of death and taxes. Those are the two things. But we have to back up a step and not just talk about death. Let’s talk about the fact that we’re living longer, but we’re not necessarily living well longer. We are aging. There is the possibility of diminished capacity. Sometimes the questions from adult children have to be very frank with mom or dad because the relationship they have. Sometimes it has to be a little more subtle. A lot of times, mom or dad, there might be some controlled circumstances where mom and dad have been mom and dad for so long and child is child. And there’s the family dynamics at work here where there’s a flip, where children have become somewhat the parent role in some circumstances, and perhaps parents have become somewhat the children. And that’s not diminishing mom or dad. It’s just the reality as one gets older that they may need more help. And they’ve been on their own, they’ve been independent. And so I do feel that you have to sit down as either a family or bring in that trusted advisor to help. If there’s any family dynamics at work, help mediate those conversations and try to start the conversation. I like this phrase. It’s called Begin to Begin. I have a blog beginning to begin, and it’s once you begin, you’re closer to the end than had you not begun at all. And so I took that blog and that saying it’s from eighth grade English class. But I took that saying because there’s a hurdle that people have to overcome to start these conversations. But once you start the conversation, it tends to be amazing how much people will be open about it. Or maybe mom or dad are hesitant to talk about the kids because they don’t, common phrase, I don’t want to be a burden to my kids and so they want to be the independent. They want to have the control. But I don’t want to be that burden to my kids. On the other side, the kids want to know. They want to be involved in a lot of circumstances.
Dean J. Catino, CFP®, CPWA® [00:07:54] I love that phrase begin to begin was that it?
Catherine F. Schott Murray [00:07:56] Begin the begin.
Dean J. Catino, CFP®, CPWA® [00:07:57] Fantastic. And I wanted to phrase this question like we’re getting to this earlier, and I know that’s not always the case. Sometimes the adult children are getting to these questions much later. Mom and dad have already maybe started to fail, and maybe that introduces additional complex scenarios. I’m assuming it does.
Catherine F. Schott Murray [00:08:18] It certainly does, because there is the question of do we even have legal documents in place? And hopefully we do because we were proactive at some point, at some earlier point when mom and dad were clearer, but maybe we were not. And so there is a level of diminished capacity. And from the legal perspective, this is a topic that’s coming up more and more now in all the conferences I’m attending in the continuing legal education classes that we have to attend, and it’s about how we represent clients with diminished capacity. And we’re obligated to and we’re obligated to treat them as they would normally be treated. That’s our ethical responsibility. And I feel it’s important to have my client, who may be diminishing but still has clear wishes in their mind at the table. But then, is it possible to invite a family member with my client’s permission to the table and advisor to the table and then talk about what documents do we have in place? Do we have at least a financial power of attorney? Do we have an advanced medical directive? Have we talked about end of life? Who’s going to be in charge in all of those roles? Because that gets back to the original question of how to start the conversation and why one of the key questions is, well, who’s in charge? Who do I turn to? Because they’re going to have the legal authority to make the decisions for mom or dad or to be there with mom and dad.
Jessica L. Gibbs, CFP® [00:09:34] I want to pick up more on this. Are there safeguards in your mind that you should be thinking about putting in place before decision making becomes completely impaired?
Catherine F. Schott Murray [00:09:43] Certainly from a legal perspective, there’s those set of legal documents that would at least help us stay out of the court system, avoid guardianship and the conservatorship of adult incapacitated individuals. That’s the financial power of attorney. That’s the advanced medical directives. But do we look at a revokable living trust? The key with having a revokable living trust is we have to actually put assets into the trust. It’s a two step process. It’s not just I’ve created my trust. Great. I’m done at this point. I always tell my clients, we’ve got step one, let’s create it, structure it, sign it. Step two, You have to fill it. You have to fund it. And when you fund it, then we have the succession planning in place of, well, who steps in if you become incapacitated? Who steps in at your death? Maybe it’s a question and it’s a conversation with mom or dad that if we have mom and dad, they both created it. And a lot of times this is very common with a couple where we’re going to manage it together and then one of those spouses will begin to fail. The caretaker spouse is managing it, which is fine so long as it’s not exhausting to the caretaker spouse because as we age, it can become exhausting. And so there tends to be a need for some support for the caretaker spouse, and then one spouse will pass away. And at that point, the remaining spouse, the surviving spouse may want to consider, do I elevate one of my successor trustees to a co trusteeship? And that way somebody is right there and we don’t have to go through doctors letters or anything else to have that person pay my bills, have that person be at the doctor’s appointments with me.
Jessica L. Gibbs, CFP® [00:11:19] Is there any implications for if someone did decide, I think I do want to become co trustee with my parent on their trust. Is there any implication as far as taxes inheriting those assets? Things like that to think about.
Catherine F. Schott Murray [00:11:31] Not from the perspective of if you’re a co trustee or a fiduciary, which means you’re obligated to follow the terms and conditions of the trust for the benefit of whoever the beneficiary is, which is going to be mom or dad. That it’s very clear that that’s what your role is. Now, sometimes you get co trustees that are in a position of conflict because they’re also a future beneficiary. Mom or dad, when they’re making the decisions, going back to who’s in charge, they have to think and make sure who’s going to follow my wishes, who’s going to make sure that the conversations we’ve had regarding my goals and objectives, they stand by and they’re willing to potentially go to battle for me, whether it’s in the medical system, whether it’s in the legal system, whether it’s in the family, who’s going to defend me when I can’t defend myself?
Jessica L. Gibbs, CFP® [00:12:15] I want to narrow in on the house because houses are a very significant portion of a person’s net worth. So I think it’s natural that you would want to help your parents protect that asset. I’m thinking in particular, we’ll talk more about this in a minute from any sort of scam or financial exploitation, what are your thoughts on let’s spitball some ideas here. You can tell me yes no. Adding yourself to the title of your parent’s house, putting the house in a trust.
Catherine F. Schott Murray [00:12:43] I get the question a lot about, well, I’m just going to be added to the title of the house, or I want to add my child to the title of the house. And there’s a couple of factors. First of all, you’re making a gift. What’s the fair market value of that house? You’re now adding this person who didn’t pay into this house. You’ve made a gift. And above $18,000 this year, we’re now filing a gift tax return. And we have to get an appraisal that usually is a stopping point at that point. I hadn’t considered that that’s a gift. Second, now you’re exposing your house to the creditors of your child, quite frankly, because it’s become an asset of theirs. That is the next stopping point of, I hadn’t considered the fact that my children may have some creditors. They may get sued in the future. Maybe they’re fine now, but they may get sued in the future. And people are going to look at this property where they have title as a potential asset to pay off a judgment. Usually I’m able to dissuade clients from the perspective of adding somebody to the title of the house if they are unwilling to look at a revokable living trust, which is usually my first. Let’s look at putting it into a trust. Because then going back to we could have a co trustee, they’re able to if you need to refinance, if you need to sell the house, they can take those actions on your behalf at the house and the proceeds from the sale thereof are still yours. We haven’t opened it up to any liability exposure. But you also for those clients you say I don’t want to trust. And they’re very firm about not wanting to have a trust. At least in Virginia, there’s transfer on death deeds where it’s effectively a beneficiary designation on the title of the house at that point so we don’t have to probate the property or probate the will in order to pass the property to whoever is supposed to receive it. So there are ways to get the property to the next generation or however mom or dad want to pass it without adding a child on title.
Jessica L. Gibbs, CFP® [00:14:25] And I have to imagine that if your parent does decide to keep the house until they passed away and it’s a house that they bought in 1970, let’s just say hypothetically. And it is significantly appreciated to you also that as an heir, someone who’s going to inherit that house, you get the benefit of a step up in basis on that house value.
Catherine F. Schott Murray [00:14:43] Absolutely. So if you’ve given away a portion of it by adding somebody to the title, they’re deemed to own 50% and now you pass away and you’re only going to get a step up in basis on 50% of that house because you gifted the other portion to your child. So if it stays in mom or dad’s name or in the name of their revokable living trust, we can get 100% step up on basis.
Dean J. Catino, CFP®, CPWA® [00:15:05] Could you actually use a tenants in common arrangement? In other words, give somebody 1% of the house so they would still have ownership in 1% of the house? And I don’t know if that achieves their ultimate goal. But you also kind of mentioned, well, sometimes people don’t want to address after I hear this laid out by you, why wouldn’t you ever want to do the trust as a possible answer, a solution?
Catherine F. Schott Murray [00:15:28] There’s two questions there. First, the 1% question about the real estate. You’re still making a gift, so that’s something to consider. And then tenants in common. Now we have two people who own the portion of the house and we potentially have probate from two people who pass away. We still need to do something with the remaining portion, 99% that mom and dad own, whether it’s in a trust or it’s a transfer on death beneficiary designation. Otherwise, we absolutely have probate on that property, which we’re trying to avoid in part. To your second question of why use a trust? And one of the main reasons folks will come in and say, I want to avoid probate. How do I do that? Well, there’s three ways to avoid probate. There’s joint ownership of assets, which for a lot of married couples, that’s what they’re used to. There’s beneficiary designations. So there’s the transfer on death, the payable on death. Your 401K’s, your IRAs. You put beneficiaries on those, your life insurance. Then there’s ownership through a revokable living trust or designating the trust as the beneficiary on assets. Where I usually fall with respect to the probate avoidance is we want to avoid probate because that involves going to the probate clerks, court appearance. Then all probate is overseen by the commissioner of accounts, who’s appointed at the pleasure of the court. So there’s ongoing inventories and accountings, probate tax filing fees. I can go on and on. Usually at this point, people say, stop, I can’t.
Jessica L. Gibbs, CFP® [00:16:50] Avoid probate.
Catherine F. Schott Murray [00:16:51] I know I don’t want probate, but then I back it up and I say, Well, let’s talk about your incapacity, because a revokable living trust, the aspect of a living trust is that it’s created today. You fill it today and it’s for your benefit. And if you become incapacitated, then your successor trustee can step in and manage your assets and take care of you while you’re incapacitated. And we can have very clear direction about what happens during your incapacity. Do you want to stay at home? If you go into assisted living, if you need long term care, clear direction that successor trustee, you’re supposed to spend every last penny on my care, even if that means the contingent beneficiaries receive nothing. And that’s a clear direction by the clients at that point.
Jessica L. Gibbs, CFP® [00:17:34] I’m listening to you and I’m thinking people listening to this. Probably some of them might already have a revokable trust or their parent has a revocable trust. When was the last time you read it? Because what you’re describing seems like a lot of detail as far as distributions from the trust, but also when is a successor trustee able to be added? How does a trustee get removed? I would imagine your trust should have all these types of clauses to account for all these types of contingency scenarios. So I think, one, it’s pulling out your trust and saying, Hey, does my trust have these what if scenarios built into it? And two, is this still in keeping with my wishes or is it super outdated? I mean, do you have thoughts on that? Like if someone wrote a trust 15 years ago?
Catherine F. Schott Murray [00:18:15] Well, I have a lot of those trusts coming through the door. And we’re at a point where not only are we looking at those provisions and the people that the named a successor trustees may not be the same people, but the tax laws have changed so much in your hypothetical 15 years. I’ve lost track of how many different tax bills were on and exemptions going up and exemptions going down, and the concept of portability. A lot of these old trusts may have tax planning provisions in them that aren’t applicable now and that may actually have negative income tax consequences to the future beneficiaries. And so there’s a need to review it. I always tell my clients when we finish this process, listen, let’s plan out for the next 5 to 7, 5 to 10 years, because inevitably there’s going to be some change of circumstance during that time, whether it’s a move, a diagnosis, maybe new grandchildren, maybe a child’s going to marry and divorce in that time period, or somebody’s going to pass away. Or there’s family dynamics that shift and change and we need to pull it out, dust it off and make sure it’s still in keeping with your wishes.
Dean J. Catino, CFP®, CPWA® [00:19:13] A little bit of a change of pace. But you mentioned this before as well. You mentioned advanced medical directives. So what should families consider when they’re assigning health care proxies or powers of attorney? Because I know that’s another dynamic that’s very, very deep and sometimes very complicated.
Catherine F. Schott Murray [00:19:31] It goes back to that original point of goals and objectives because health care is very personal. Folks have a lot of different ways of thinking about health care, having an advanced medical directive, and I break it down into three different documents. You’ve got your advanced medical directive or health care power of attorney that’s naming someone to make all medical decisions, not just end of life. You’re expected to survive, but you have surgery. If something happens and somebody needs to make a decision. The living will is the end of life decision making and guidelines that you’re providing to your health care agent in most cases. What do you want to have happen? What do you not want to have happen at end of life? The legal formality is two doctors have certified that your terminally ill and death is imminent or you’re in a persistent vegetative state and death is imminent. Do you want life prolonging procedures? That’s the terminology withheld, withdrawn at that point. And so you’re providing guidance through your living will, beyond the living will, there are a couple of additional documents, and this is coming up more and more. There’s a durable DNR, Do Not Resuscitate. It’s a medical order that signed by your physician and yourself or your health care agent. And there are these POLST or MOLST, POLST and MOLST. T So it’s a physician’s order regarding life sustaining treatment. Some states call them POLST like Virginia, some states call them MOLST like Maryland. Basically, it is a document that’s signed by the physician and yourself or your health care agent. And it is very clearly saying that you do not want CPR, you do not want to be resuscitated. It’s the document that if you’re in an end stage situation, you’re at home, you post on your refrigerator, your posting above that, you maybe even posting on the door. First responders are looking for these documents. They’re even asking for the DNR because if they’re called say you’re at home and you’re on hospice and somebody panics. And instead of calling the hospice nurse because there’s an event, which is what they’re supposed to do or what they’re told to do, they call 911. Well, first responders are told that they’re to provide standard of care unless they have a document that states otherwise. I have clients who said to me or their parents are aging, you know, I don’t want CPR on my 91 year old mother that’s going to crack a rib. And so people have educated themselves more as to what happens as your body ages and what some of these life prolonging procedures can actually do to your body. And people are making educated decisions about what I do and do not want to have happen.
Dean J. Catino, CFP®, CPWA® [00:22:01] You mentioned people have educated themselves. I think that’s with our society. I don’t know if we do as good a job as we can with this, because everyone, myself included, no one wants to really go there. Although we know it’s going to happen. And again, it gets back to having these initial conversations and how to approach the subject matter, because it is very complicated and it’s very personal. But like you said, begin to begin. I think that’s perfect. You have to kind of take the first step.
Catherine F. Schott Murray [00:22:28] Sometimes the education is not that they write about it. It’s that they’ve had personal family experience. So I do get a lot of clients who come to me who say, I’ve just had an experience where someone in my family was sick or somebody is ill, and I’m watching this process and I don’t want to have that happen, or there was a sudden death and mom or dad were very good in their planning and it made it very smooth transition. And they say, I don’t want to be a burden going back. I don’t want to be a burden. I don’t want to create trouble. So I want to make sure that I have a plan in place. And this is a way that people can control what happens when it comes to a point where they can’t control what happens.
Jessica L. Gibbs, CFP® [00:23:06] Being in our line of work, we see a lot of clients who are aging or people who are helping their aging parents. And I think I observed something of someone all of a sudden had an incapacity event and their spouse didn’t know what their wishes were. And I kind of use that as a ping to think about, I think I know what my parent’s wishes are. I want to double check. I called them up. I said, If you’re in a coma, what is it that you want again? And it was just an opening and it was a very awkward question, but I could kind of explain, Hey, someone in my orbit is dealing with this. I just want to make sure that I know what your wishes are. And then the door was opened for them to be totally transparent about what they wanted if they were in some sort of similar end of life situation.
Catherine F. Schott Murray [00:23:47] Not just your parents, it’s your spouse. It may be a sibling who doesn’t have a spouse. It may be a friend. There are a lot of folks who aren’t getting married or couples who don’t have kids, and then they’re looking to see, well, who’s going to stand in place when my spouse isn’t available? Or if I’m the terminology that it’s been used to, senior orphans, they’re on their own. Who are they turning to? Well they’re turning to the professional advisors in some respects. There are companies out there that will service health care proxy. They will come alongside clients and they will be the care managers while they’re able to make their own decisions and then step in as health care proxy and help advance medical directive and health care power of attorney. In the conversations that I have for those clients, I say that’s a relationship you need to be comfortable with these folks you haven’t known you. You’re just meeting them making these decisions because the financial side can be fairly straightforward. You can get a corporate trustee, you can get a bank who will work with your financial advisors. But the health care side is very personal. And if you want to stay at home and live at home, what does that look like? The cost of care and in-home care is astronomical around here in particular. Other places may be a little different, but if you’re living on the side of a mountain and you have home health aides coming in, are the roads being plowed in the wintertime? If trees go down because we have a major windstorm, who’s cutting those trees? Can people get in and out and first responders come? Those are very real conversations that start with the general. But you do have to get into the details at time.
Dean J. Catino, CFP®, CPWA® [00:25:15] I know that you have to have this initial conversation with your parents. And let’s say they haven’t really done anything at this point. This is great. We’re going to call up Catherine and we’re going to start this process. Give us an idea of how long it takes from start to finish. And it’s a tough question because I know sometimes people don’t pick up the ball and run with it. But let’s just say people are generally being very proactive and they’re working with you. How long does it take for you to take someone through this from A to Z?
Catherine F. Schott Murray [00:25:44] I’ll start with a very typical lawyer answer was, it depends. First and foremost from an ethical perspective. If I get a child who calls up and is asking a question from mom or dad. I have to make it very clear to that child, well, mom or dad are going to be my client and I need to speak with them and I need to speak with them on their own. I need to ensure what their wishes are. While I appreciate you calling on their behalf and starting the ball rolling, begin the begin. I need to speak with them. Are we able to set up a meeting and we set up a video conference, things along those lines. From that point, so long as I can meet with mom or dad and we start the process. I would say on average is a 3 to 4 month process if everybody stays on track. On my side, we can control what we can control, which is the follow up and the drafts. But once the drafts go out, sometimes they disappear into ether and we’re trying to follow up and get folks to come back on board. Sometimes life just happens and I have a lot of that. And advisors such as yourselves. You’re having your annual meetings or your biannual meetings, and I know it’s on your checklist and that’s very helpful because I can always tell when folks have had their meetings with their advisors because they then follow up with me like, I know we started this process a year ago and I just was meeting with Dean or I was just talking with Jessica, and I need to restart the process. And so that’s why I say on average it can be 3 to 4 months.
Dean J. Catino, CFP®, CPWA® [00:27:00] That’s for everything. That’s for wills, trusts, advanced medical directives.
Catherine F. Schott Murray [00:27:04] Start to finish from the perspective of the structure of the plan and the signing. And if you have a trust, we got to fill the trust. So after that, there are steps to take. Usually I’m turning back to you, Dean, or you Jessica, and saying, All right, trust is in place. Can you help clients? And you all are great at helping clients make sure they get their trust funded.
Jessica L. Gibbs, CFP® [00:27:23] So I want to wrap up with one final question. We kind of touched on it a little bit before, but I’m hoping you can expand on it. So aging people are unfortunately a target of financial exploitation and scams. Are there any actions that you can take to protect your parents from being the victims of fraud?
Catherine F. Schott Murray [00:27:38] Part of it is being involved, knowing what’s happening with mom and dad so that you know when they’re starting to decline. Beyond that, there are a number of apps and services that one could get to say, for example, certain generation only has a landline. They don’t use cell phones. And so there are applications where you can white list numbers and block everything else. Because if folks are aging, they get lonely, they pick up the phone, they’re used to picking up the phone and having a conversation, and they’re not understanding and they’re talking to an automated computer. A.I. has created an issue here where even on your cell phones, people still pick up the phone. They say it’s a spam risk, but they’ll still pick up the phone and they’re saying hello. And then people are asking questions and their voices are being recorded. And I will have the conversation. It’s just within our family of don’t say yes, don’t give information, ask them questions. And then if you have capacity, you’re able to discern that this person is not real and they’re just trying to scam you, but somebody who is diminished and this person’s very friendly, that’s where you do have to sort of monitor what’s going on. It’s hard. It really is. Everything is digital. Setting up two factor authentication, requiring two factor authentication on all your digital accounts and digital assets. Recent circumstance where not only is it a two factor authentication, but it was very clear that somehow the phone had been effectively hijacked. And so even with resetting everything, it was all being filtered off to the scammers. And so now I need to have a password and I need to have a physical key. There are these keys that you can use or it’s a thumbprint or it’s something else that’s physical that the scammer can’t have. It’s hard though. It really is, because they’re moving at the speed of light and we’re trying to come up behind them because they keep shifting. But the more that someone is involved and understands what’s going on, I know from your perspective you’ve created the trusted contact type concept where if you get a phone call from one of your clients and it’s a strange request or it’s not usual.
Jessica L. Gibbs, CFP® [00:29:43] If someone called up and said, I need to make an unusually large distribution or I need to add this person as someone related to my accounts, it gives us the ability to say, That’s a little suspicious. Why don’t I reach out to this person that the client has designated as someone I can talk to and ask them, Hey, we got kind of a suspicious call from your mom or dad. Is everything okay with them?
Catherine F. Schott Murray [00:30:20] That’s wonderful because it’s just another check and balance. And I know some might consider it a bit Big Brother, but I look at it from the perspective of you may not know that you’re diminishing, that you’re declining, and so you think it’s a reasonable request because that’s what your mind is telling you. But it’s not it’s not in keeping. And you’ve been hoodwinked. Going back to the senior orphans, they’re lonely and they connect with somebody online and then they want to send money to this person. These stories happen. I hear this all the time with the Virginia Academy of Elder Law Attorneys. The attorneys are swapping stories about what’s happening with their clients and trying to protect their clients and trying to get them out of hot water with their finances. So the more that we can partner and team both as advisors and with the family, I think it’s also protective of our clients.
Jessica L. Gibbs, CFP® [00:31:04] So ask your parents if they have an advisor. Hey, do you have a trusted contact for. Can I be added to as a trusted contact?
Catherine F. Schott Murray [00:31:09] Exactly.
Dean J. Catino, CFP®, CPWA® [00:31:10] We see it so often too, that when we meet with clients and we start understanding their financial assets and there are so many different pots of assets. Various banks. Various financial institutions. After a while, people start to realize that I could manage this easily when I was 45, 50. All of a sudden you’re getting on in years and now it becomes much more difficult. So consolidation to make life a little bit easier and you don’t give up anything, by the way, when you do that. That’s one of our goals, too. We never act on voicemails. We don’t act on emails. We actually have to speak to people, which scares me. And this has been reported a few times with artificial intelligence. You can really scam people that are really sophisticated. So we’re on guard about this as well. It’s a big issue.
Catherine F. Schott Murray [00:31:59] That’s why if you’re going to pick up your phone and you don’t recognize the phone number, they’re not in your contact list. You need to be very careful with what you say and don’t say yes and don’t give your name and try to say as little as possible or just don’t even pick up the phone if it’s not spams. Leave me a voicemail. They’re going to contact you some other way. Most people text these days. Nobody leaves voicemails.
Jessica L. Gibbs, CFP® [00:32:19] Well, this has been great. Thank you so much, Catherine, for sharing your expertise. We look forward to having you back. For those who don’t know, Catherine was on our podcast a few years ago, so we look forward to having you back again, hopefully soon.
Catherine F. Schott Murray [00:32:30] Thanks so much. It’s been wonderful.
Dean J. Catino, CFP®, CPWA® [00:32:32] Great seeing you here.
Jessica L. Gibbs, CFP® [00:33:16] Okay. This is part two of our episode about taking care of aging parents. And this half, we’re going to focus on minimizing some of the little headaches that can add up after your parents has passed away, as well as advice for those in the sandwich generation. I am delighted to have back on the podcast Monument’s amazing Client Experience team, Cathleen Phelps.
Cathleen Phelps [00:33:36] Hello.
Jessica L. Gibbs, CFP® [00:33:37] And Cecilia Gilliam.
Cecilia Gilliam [00:33:38] Hello.
Jessica L. Gibbs, CFP® [00:33:39] It’s very easy to think about the big assets when you’re trying to think about helping your parents. You think about how do you think about the investment accounts? But from your perspectives, what is it top of mind for people helping their aging parents that can lead to big headaches down the line?
Cecilia Gilliam [00:33:56] For starters, I would say bank accounts. Make sure they’re titled in a trust or jointly that gives their survivor access to the bank accounts or final expenses like taxes. And in the event that you have to go to probate and have to get a court order for the probate. All those require fees and you want to be able to pay them from a bank account that you have access to.
Cathleen Phelps [00:34:19] You also want to make sure that the surviving spouse has a credit card of their own or one where they are the primary account holder. A lot of times people have what they think are joint credit cards, but in reality, one person’s primary account holder and the other one’s just an authorized user and the authorized users are going to be cut off if the primary account holder dies. So it’s kind of nice to have that organized before anything happens to anybody.
Cecilia Gilliam [00:34:47] Another item to think about with the family and while you’re still alive is your end of life decisions such as funeral arrangements, your grave, plot headstone. You can prepay for all of those items and then put your final instructions in writing. It’s fewer decisions for those who are grieving your death to just be able to be like, okay, mom and dad or my spouse took care of this. Here it is, and it’s already paid for. And then also another opportunity for the family is to perhaps write up an obituary that the spouse and the parents have the chance to discuss with their loved ones while they’re alive.
Cathleen Phelps [00:35:28] We did that in my dad’s last months. It was very important to him to know that my mom was not going to have to deal with the administrative hassle of figuring out funeral arrangements and everything. So he did a lot of that. And my sister drafted this great obituary, which she was not in a frame of mind to appreciate, unfortunately, But it was really nice to have that time with him and hear what she wanted included.
Jessica L. Gibbs, CFP® [00:35:56] And to reflect, I think, on his life, I would imagine. What else is on your guys minds?
Cathleen Phelps [00:36:02] Passwords. Make sure that you can log into your parents critical account. It is really hard if you can’t even log in and a password manager. The best thing I keep coming back to that in suggestions and it’s just a hard hurdle for people to get over some time. If you don’t have the password manager maybe sharing some of those passwords before you’re in a crisis situation. My dad’s been gone four years and there are still a couple of things that my mom cannot log into such as his email, and it’s just very, very difficult. She has a list of passwords. My dad had a physical list of passwords, but so many places want you to update them regularly and sometimes the list doesn’t get updated. So we’ve never figured that out. That’s a big one for everyone, even for yourself, not just your parents.
Cecilia Gilliam [00:36:55] We have said this multiple times and we’ll say it as often as we need to, and that is review and confirm that all of your assets are titled correctly to avoid probate. My husband’s mother passed and lo and behold, one of her partnerships was never titled in her trust, and the accountant could have caught it on the K-1. And it wasn’t until after she passed that the partnership when the trust documents were presented there like, Nope. So it’s just important to make sure that when you are reviewing all your assets on an annual basis with your financial advisor, your CPA, make sure it’s title correctly, especially if you put in the effort of establishing a trust.
Jessica L. Gibbs, CFP® [00:37:36] I think that’s one of the most common misconceptions we see as people put in the work, as you said, to write a trust and then they never take the step to title it into the trust. Or in your example of your mother in law, there’s that one lingering asset that never got transferred. And then whereas you think, okay, everything’s good and buttoned up, all of a sudden now you have a prolonged probate experience to go through because of one lingering complex asset potentially out there. If your parent has unfortunately passed away, what should you be doing?
Cathleen Phelps [00:38:05] One thing you’re going to want to start doing is closing the financial accounts of the person who has passed their bank accounts, investment accounts, credit card. But the credit cards where the deceased is, the primary account holder and the survivor is just an authorized user. Consider sending that final payment first. It will just make things simpler because once the credit card company knows that their account holder has passed, that account is frozen and the authorized user is no longer authorized. Get that final payment in and know that any credit card benefits might only be accruing to the account holder and not to the authorized user. So if you have Costco points or airline points, you’ll want to read the fine print to really understand expectations that you should have there.
Cecilia Gilliam [00:38:56] Agreed. And then another point after a loved one has passed a parent. Don’t be too quick to close the estate once you feel like all your ducks in a row, especially if you have a complex estate, if your spouse or loved one had partnerships that required filings in multiple states, sometimes they will come back with inaccuracies. If you have a complex estate, you will go into multiple tax ID numbers and so it can get a little hard to follow the various steps. So keep in mind that estates can stay open a little longer than you are anticipating, So don’t be too quick to close it because you want to make sure everything has transferred according to the trust to the will and the way the beneficiaries are listed. And sometimes that does take a little longer than it should. Particularly going back to the taxes, if you have partnerships in a nonresident state, that can get a little tricky with the nonresident state and actually closing those estate documents. So be patient with the process. And it does take time. It will eventually get done, but be mindful of the fact that there will be a fair bit of time before all of this settles.
Jessica L. Gibbs, CFP® [00:40:10] Then another instance where potentially you’re in multiple states. If, for example, the deceased had property, so maybe you have your primary residence in one state, but you have a rental property or a vacation property in another state. That would be an instance, another instance where you’re going to have probate in multiple states. I think it’s good advice, Cecelia because there’s obviously for an executor, such an intense administrative burden to want to get it over as quickly as possible. But that’s a good piece of advice to really make sure all your ducks are in a row before it’s closed.
Cathleen Phelps [00:40:40] Another thing I can think of is if your spouse or parent was receiving Social Security, they are not entitled to their Social Security payment in the month that they pass away, even if they die on the very last day of the month, their security administration is going to want that entire payment back and they will claw it back. There’s no pro rating of payments, so that can be an unpleasant surprise at a time when you’re having to pay for funeral expenses and all kinds of unexpected expenses. I believe that the Social Security Administration will work with you to spread that pay back over couple of months if needed, if it’s going to be a hardship to pay it all at once. But be prepared for that.
Jessica L. Gibbs, CFP® [00:41:31] Do they like take it automatically from your bank account or do you have to do something as a family member of the deceased?
Cathleen Phelps [00:41:40] They are going to find out about the death even if you don’t report it. The funeral home will let them know. Okay. So I believe they will just they will just take it back. Really, the safest thing to do is just let them know and instruct your bank or financial institution to reverse that.
Jessica L. Gibbs, CFP® [00:41:58] Something just at least to be aware of. If you saw a payment made into the bank account and then a reverse of that, you know, okay, that’s just something that’s going.
Cathleen Phelps [00:42:08] To go away one way or the other. If they happen to send you a check, then you are responsible for writing a check.
Jessica L. Gibbs, CFP® [00:42:15] Writing a check back to them.
Cathleen Phelps [00:42:16] Because they have no way to take it back.
Jessica L. Gibbs, CFP® [00:42:18] So if you’ve been receiving Social Security payments by check, you do have to send a check back.
Cathleen Phelps [00:42:23] Yes.
Jessica L. Gibbs, CFP® [00:42:23] Good to know. Changing gears a little bit. I know you both have shared with me that you are part of this sandwich generation, that you have firsthand experience being in a position where you’re raising kids and also taking care of aging parents. What advice do each of you have for others out there going through this experience?
Cecilia Gilliam [00:42:44] Immediately, what comes to mind is just acknowledge it. It’s happening. You can’t deny it. There’s no way around it. Once you acknowledge that you are being sandwiched, that’s one thing. Once you acknowledge it and then you can start moving on with the plan thereafter. But keep in mind that both you and your parents need support during this time. And it can be frustrating, then exhausting, that everyone’s being pulled in different directions. And typically it does happen rather suddenly. I mean, we plan. We plan. Plan. But a life event can happen overnight.
Cathleen Phelps [00:43:19] Try to maintain some sense of flexibility because you cannot plan. If you have children, you know that you cannot make a plan even if you only have pets. You cannot make a plan. And if you are worried about it, can care of your parents. At the same time, you just have to know that you need to be flexible and ready to pivot. So by the trip insurance, it is worth it. I help my parents get some money back. When they had to cancel a trip the last minute and I had never really considered buying travel insurance before, but I buy it all the time now.
Cecilia Gilliam [00:43:55] I talked about acknowledging what’s happening to you currently, but I think after you acknowledge that it’s happening, some other emotions and feelings that have to kick into place would be patience. Patience. It’s not easy. Frustration and anger. All the negative feelings can kind of surface immediately. But if you just take a deep breath and are patient with it. Another reason I wanted to show off this patience with my own parents when they were in nursing facilities is the role is going to be flipped one day. I would carry my kids with me to visit my parents in the facility they were in, didn’t have laundry, and they would see me getting mom and dad’s laundry and taking it back clean. So there is an example to be had here to show the next generation. This is kind of how it not necessarily has to be done, but it can be done this way.
Cathleen Phelps [00:44:44] Your commitment to family. It’s always good to model that.
Jessica L. Gibbs, CFP® [00:44:47] What about working with your siblings? Because I feel like on the one hand, if you’re an only child and you’re helping your aging parents, that comes with a lot of complications. It’s kind of all on you. But I think if you have siblings, that’s also a completely different dynamic. On the one hand, yes, maybe there is someone to help shoulder the load, but also you’re navigating a relationship with a sibling. You’re having to come to consensus with and make decisions. And I would imagine when it comes to end of life decisions, you have to work with your siblings to make sure everyone’s okay with, okay, we’re letting our parent go. Do you guys have advice on how to minimize conflict or share responsibilities? Because I know each of you have siblings. That’s why I’m asking this.
Cathleen Phelps [00:45:29] I only have two siblings and I am fortunate that I have a really good relationship with them. We’re all close. And when my dad was so ill trying to support him and my mom through that process and then my mom downsizing after he passed, we were pretty able to delineate clear areas of responsibility about who was going to do what. And I’m the local one. So the immediate day to day stuff fell to me. My brothers owns a real estate company, so he helped with the sale of the house. My sister flew in and helped significantly with the clean out. There were just some clear lines that were kind of easy to draw that everybody was pretty happy with because it fit their location and their expertise. And if anyone needed help, we would make a change. And I’m fortunate that we had that relationship. So as much as you can be clear about who’s responsible for what, so nobody feels like they’re being taken advantage of or overloaded. We never had an issue with feeling like somebody didn’t care. And I’m very thankful for that.
Cecilia Gilliam [00:46:34] I agree. I have eight siblings. And to your point, Cathleen, there are those who are near mom and dad and the burden does fall on them to carry a fair bit. But then to your point, when they do pass, it’s amazing. All of my siblings loved our parents dearly, mom and dad. And yes, the ones who were here locally carried the burden. But when the other ones would come in from out of town, they’d be like, This is your weekend off. I want you to go get your nails done. Go have a good time. I got this. And then I had a brother who helped with the taxes. I never had to work on the taxes. I would just send all of that stuff to my brother and he took care of it. There is a sharing of responsibilities. And again, it just goes back to if you can share the responsibility and recognize who’s doing what and at what capacity, and if you can come in and help out, It’s tremendous. It’s a tremendous sense of support that I think your parents and loved ones, if they were alive, they would love to see that camaraderie.
Cathleen Phelps [00:47:34] Having them be your support and not a hindrance is really critical. And again, I’m thankful that I have a relationship with my siblings that we could have that any kind of support that you can have for yourself during this time, even outside of family, somebody who’s not so involved in it, friends, book club, writing club, whatever it is you have for yourself, church going to be really helpful to you and your parents need their support system to outside of you.
Jessica L. Gibbs, CFP® [00:48:07] That’s great advice and perspective. Thank you so much. Cathleen and Cecilia.
Cecilia Gilliam [00:48:11] Thank you.
Cecilia Gilliam [00:48:11] Thanks for having us.
