Wealthy Aging Dad Did Not Do Any Estate Planning

Adult son of a real estate investor began to notice that his father, Wealthy Dad (WD), was slipping. WD was becoming forgetful. He had purchased a lot of real estate in his younger days, and owned eight single family houses in one of the most expensive markets in the U.S. He gradually lost the ability to manage his rental homes and other investments. Adult son (AS) who was a successful professional, began to feel a sense of panic. Those houses were falling apart, he knew, but he did not realize how bad things had gotten. AS knew that the burden could fall heavily on him as WD’s health declined. AS didn’t even know where WD kept the records of his rental properties, much less how to track whether they were rented and any income from them.

A mental health professional’s help

AS was seeing a psychologist to address his anxiety about WD among other issues unrelated to his father. He began to discuss the situation of his father’s decline with the doctor. The psychologist is connected to AgingParents.com, and he had a broad perspective of aging and how cognitive decline rapidly affects financial management. He began to work with AS on getting information about WD’s real estate. WD assured his son that “everything’s taken care of” and that AS didn’t need to worry. WD told his son that all the important papers were in a safety deposit box at the bank. He said all his estate planning papers and real estate records were there.

AS’s psychologist warned AS that WD might not be clear about what was in that box, due to memory loss and what AS described as his father’s habit of just plain stubbornness. With guidance from the doctor about how to approach his Dad, AS persuaded his father to let him have access to the safety deposit box. It took repeated tries. When he got access, he saw a terrifying thing: there was no will, no trust, no income records. He did have the addresses of all the rental homes. He took the time from his own heavy work responsibilities to visit them personally.

AS felt as if he were witnessing a nightmare. Every one of the otherwise valuable houses was vacant. Most were visibly falling into ruin. He had no idea how long they had been empty. He felt a sense of dread about the matter. He knew that his father was in frail physical health, besides probably having early dementia. He had to move fast to fix the mess. AS did not have legal authority to act on his dad’s behalf.

No will or trust

WD initially refused to discuss getting a will and trust, for the best legal protection he could get. Tax issues, repairs, and many other factors would have fallen on AS if he did not scramble to get WD to a lawyer. He was referred to a CPA-Attorney in WD’s county. WD reluctantly agreed to go with AS to see the attorney. WD and the lawyer met several times. Fortunately, WD did still have the capacity to make decisions about creating a will and a trust. All the houses were eventually put into a trust and that alone saved countless dollars. Where WD lived, the gift of the property held in trust to the heirs did not have to go to court. Probate, the court proceeding that proves a will or what to do with assets when there is no will, is very expensive for this kind of estate. The trust the lawyer created for WD eliminated the need for probate, which would have forced AS to pay a lawyer to go to court after WD passed.

Fixing the houses

WD had sufficient assets to allow AS to undertake repairs and begin to rent out the houses in the desirable market where they all were. It was a major task, but a much better option than WD leaving a huge, unattended mess. AS experienced a huge sense of relief when all the legal documents were finally in place. Now WD’s legacy of wealth would not be destroyed by his own neglect and cognitive decline.

WD’s passing

Things were firmly in place a few months later. WD passed suddenly shortly thereafter. AS was deeply grateful for the guidance he got from his psychologist, who repeatedly urged him not to give up in seeking his father’s cooperation. WD’s stubborn resistance was very hard on AS, but he succeeded. It came just in time.

The Takeaways:

1. WD is not the only elder who tells offspring “everything’s taken care of” when asked about estate planning. In this matter, exactly nothing was taken care of. If this line about what is taken care of sounds familiar to you, do not take it at face value. Ask to see the paperwork.
2. Stubborn aging parents with even slight cognitive decline may not remember accurately what is “taken care of”. They may say everything’s fine to cover their own embarrassment and fear that they don’t remember.
3. Adult children with aging parents who used to manage complex investments in a younger day may slip gradually into incapacity to manage those investments. This can cause huge losses of value in things the elder wanted to gift to the offspring.
4. If the elder resists talking about it, persist. Keep asking. Deal with their resistance. If you don’t, you may be in for a nasty surprise, as AS was when he finally got into WD’s safety deposit box.
5. Get legal advice from an elder law attorney who understands cognitive impairment. Plenty of lawyers are very vague about this. Typically, dealing with dementia is not taught in law school. But competent legal help is out there. It can save you aggravation and can save the estate a lot of money.