There are plenty of aging parents out there making life difficult for their adult children, as we see from our experience working with elders’ families at AgingParents.com. A common problem for families happens when the one in charge of finances, typically the patriarch, develops cognitive impairment and can no longer safely manage the family trust and his own spending. Things can get financially dangerous.
In this fact situation from a real case, we observed what it took to get the patriarch out of the position as trustee and to permit the successor, the adult daughter, to step in. The dad, whom we’ll call Gene, had been developing dementia for at least two years prior to our involvement. During that time his three children repeatedly urged him to stop giving money away to a predatory family member. He felt obligated to her and was totally powerless to resist the demands she made on him for money. He just kept writing checks, draining his own resources. It was clearly a case of financial abuse.
His children were worried that he would run out of funds right about the time he himself and his wife would need care. Their concerns were justified. We were involved in meetings with Gene in efforts to persuade him to allow what his family trust provided: to have his daughter, Jennie, become the successor trustee. He agreed, then reneged. He accepted the logical reasons and then ignored them, doing this for months. The kids had no choice but to use the law to take over control. Their father was too obstinate to resign as trustee when asked, even with the entire family presenting a united front, asking and respectfully begging.
Gene’s trust required that he go to two doctors willing to assess him and put their observations in writing that he no longer had the capacity to manage money. That was a challenge that took months to accomplish. Meanwhile he kept writing checks on demand to the predator.
When the doctors’ letters were obtained and the legal change of trustees had finally been certified by an estate planning attorney for the adult children, it was time to meet with Gene to deliver the news. He had been removed as trustee. His daughter was now in charge of his finances as successor trustee. We were present with all his children and his wife for an in-person meeting.
He was out, like it or not. He was angry. But it was too late to change that. The heavy responsibility of stopping the financial abuse now rested on Jennie’s shoulders. She cut off access and the predator was done.
Gene’s failure to listen to reason, and refusal to resign as trustee when asked cost his children dearly. They had to hire consultants (AgingParents.com), have meetings, hire an estate planning attorney, and get him to doctors to get the job done. Their time (8 months), energy and thousands of dollars were expended to prevent an even worse outcome. Had they not stopped Gene and the abuser, they could have been left to support both of their aging parents. The predator was having a fine time manipulating a man with seriously impaired judgment. The only way to stop the abuser was to stop Gene’s access to funds.
- Even if your aging parents are fine, now is a good time to ask them to review their estate planning documents, particularly the family trust with you. Look for the section which addresses what happens in the event of “incapacity”. It can happen to anyone, particularly as people live longer than ever. Make sure you and they understand what it could take if impaired parents are unwilling to give up financial control, to remove control from them.
- Be sure that anyone who is named in a trust as the “successor trustee” knows what that means and how much responsibility is involved. It can be a huge and burdensome job. When financial abuse is a factor, confronting the abuser will be inevitable. Get help if this intimidates you as a potential successor trustee.
Related: Son Gets Dad, 85, To Give Up Secrecy About Finances