Author Topic: passing of my father  (Read 1603 times)

ericbonabike

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passing of my father
« on: February 07, 2020, 10:21:51 AM »
My dad died last week, rather suddenly.  He was 70.  He had spent 23 years in the army and retired 20+ years ago, basically the FIRE dream along with my mom. 
Around thanksgiving of last year, we were visiting with him, and he pulled me aside:  "I want you to manage mom's finances if something happens".
Within about 72 hours of his death, my mom reiterated this request.

My sisters and I kinda circled the wagons, and we basically figured out that mom is set financially.  She's entitled to:
~45k a year from an annuity my dad bought into via the military (called SBP).
~15k a year in SSN.
She has medical coverage for life via tricare.

Additionally, she had ~250k in retirement IRAs.
My dad had ~250k in retirement IRAs (these are being rolled over to her name)
And my dad had life insurance with payouts approaching ~250k.
They own a farm worth ~400-500k, which they owe about 200k on.  And my mom has said she wants to sell it (she can't live alone there).
And my mom has about 80k sitting in cash. 

So, adding all of that up,
My mom has or will shortly have:
60k a year in guaranteed income
500k in traditional IRAs.
330k in cash.  (80k +250k in life insurance).
And another  200k  to 300k in proceeds from farm if/when she sells.


My plan is to convert all of her managed accounts to unmanaged accounts and put her into a 30%/70% stock to bond portfolio, as I'm mostly worried about getting her through the next 5-15 years.    That'll either be VTI or BND.
I also plan to begin converting a lot of her traditional IRAs to roth iras before RMDs kick in. 

So please chime in if you see anything you see above which doesn't make sense financially (AA allocation, conversions, etc).


I have another potential problem also:  On the spectrum of spendypants to uber MMM, i'm about an 8 or 9.  And I realize to rest of world this seems weird.  One of  my sisters is 6, and we agree on the course of action.  But my other sister is a 2.   I'm an ant.  She's a grasshopper.  That's how it's been since I can remember.  I want to stretch my mom's money out so she can comfortably live for the next 5, 10, or 15 years.  Hell, she's only 70, so what if she lives till she's 90????
I don't know how long she'll live, and neither does my sister.  But my sister is acting like mom is gonna pass within the next 5 years.  So, from her perspective mom can and should be spending 200k a year.

I'm very afraid that she will start milking my mom out of money.  Sis is living paycheck to paycheck presently, and began talking about buying a larger home and a larger car so that mom can be more comfortable while she is staying with sis.  (Note:  We've agreed that mom will spend 3-4  months at each of kids houses.)
I've tried to be diplomatic, but I keep running into an emotional response which ends in arguing.  Yes, we are all grieving.  Yes, mom has a lot of money.  No, it's not yours to spend.  Period.

But I worry worry worry about my mom being "preyed" on.  (I'm not sure "preying" is the right word here, because I don't think my sis is being malicious).  She might just think mom deserves to comfortable while she's living at sis's house, and sis doesn't have enough money to buy that comfort herself.  It seems like a dangerous path to go down, and I have no frickin' clue to manage it.





Lady SA

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Re: passing of my father
« Reply #1 on: February 07, 2020, 11:42:03 AM »
first, my condolences about losing your father. He sounds like a great man.

It sounds as though both your parents wanted you, and only you, to be in charge of your mom's finances. Somehow the sisters got involved, but it sounds like your parent's intention was for just you to make decisions about the finances. Is that correct?

You have to remember that neither you or your spendypants sister is right. The only person whose opinion really matters is your mom's. How much does SHE want to spend per year? What does SHE want her life to look like now? And then, and only then, can you step in to arrange her finances to support her vision.

So first, I would probably talk with your mom, one-on-one. check your assumption that they want just you to make financial arrangements and not jointly with your sisters. I would also ask your mom what her thoughts are on what she wants her life to look like, how much does she envision spending per year? And you can hint or explicitly talk about your worries about "scope creep" with regards to your spendy pants sister. Maybe your mom is aware of your sister's spendypants tendency and already has a plan for that. Maybe your mom doesn't care. Maybe your mom has never considered it and will appreciate you bringing it to her attention. But regardless, you need to get your mom's viewpoint on how to handle HER MONEY (and therefore her life) instead of you and your sisters fighting about it without really consulting her.

Second, if you are correct and their intention was for you (and only you) to arrange her finances, then once you understand her vision for her life, then go ahead and craft a strategy that both gives your mom a comfortable life and also protects her assets from your sister's whims. And if this assumption is correct, you don't need your sister's permission or anything. I don't have any particular advice for this, but in my head is the vague idea of you set a reasonable yearly/monthly stipend to her bank account, and otherwise have the bulk of her money protected/shielded from view with your plan that you outlined above.
I would just say to anyone who asks (and they will!), that you talked with your mom about what she wanted her life to look like, and you set up her finances in such a way to support that. and then don't argue/justify further. Just tell people what they essentially need to know: that your mom will be taken care of financially and they don't need to worry about it.

Getting involved in another person's finances comes with a lot of emotional baggage. Good luck navigating it!
« Last Edit: February 07, 2020, 11:49:15 AM by Lady SA »

Queen Frugal

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Re: passing of my father
« Reply #2 on: February 07, 2020, 12:05:47 PM »
I am sorry about your dad.

My suggestion is at the very least to make sure your mom has a good, solid financial power of attorney in place. Take her to a good elder law attorney in your area to get one if she does not have one already. That could be tremendously useful if she loses capacity at some point and it will be useful now if she wants you to just "take over" her finances. She should have all of her other estate planning reviewed as well, but given your concerns, the financial power of attorney is very important.


Dicey

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Re: passing of my father
« Reply #3 on: February 07, 2020, 12:16:15 PM »
(Note:  We've agreed that mom will spend 3-4  months at each of kids houses.)
First, sorry for the loss of your dad. Second, it's good that your mom has you to help her through this process.

Who is "we" in the snippet quoted above? Your mom's vote should count the most.

A friend did this. Sold her house and lived 1/3 of each year with three of her four kids. After a couple of cycles, she wasn't happy. One kid had a nice MIL set-up and the most compatible household personalities. About a decade ago, she decided to stop the merry-go-round and put down roots there. By all accounts, it's been a happy arrangement.

I saw her last at the funeral of her fourth child. The one who was already taking care of a disabled husband and living on a limited income. When the mom made the decision to sell her house, she also chose not to add to this daughter's burden. Instead, she traveled with the daughter when the daughter was available (paying her expenses), or made shorter visits, staying at a nearby hotels. It was unconventional and "unequal", but it worked well for everyone.

If your sister is going to use this as permission to spend mom's money, she should simply be taken off of the rotation list. However, it sounds like your mom is going to have lots of options. Giving her a little time and space to decide what she wants (without the interference of the sister you're concerned about) could be the best gift of all.

Best wishes to all of you at this most difficult time.

Capsu78

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Re: passing of my father
« Reply #4 on: February 07, 2020, 12:17:30 PM »
Sorry for your loss.
If you want to hear about what can go wrong with end of life decisions, here is 40 pages worth that have pretty much helped me settle my mind on what we are going to do with our plans.
https://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/inheritance-drama-you-got-any-stories-wanted/

ericbonabike

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Re: passing of my father
« Reply #5 on: February 07, 2020, 01:06:38 PM »
(Note:  We've agreed that mom will spend 3-4  months at each of kids houses.)
First, sorry for the loss of your dad. Second, it's good that your mom has you to help her through this process.

Who is "we" in the snippet quoted above? Your mom's vote should count the most.

A friend did this. Sold her house and lived 1/3 of each year with three of her four kids. After a couple of cycles, she wasn't happy. One kid had a nice MIL set-up and the most compatible household personalities. About a decade ago, she decided to stop the merry-go-round and put down roots there. By all accounts, it's been a happy arrangement.

I saw her last at the funeral of her fourth child. The one who was already taking care of a disabled husband and living on a limited income. When the mom made the decision to sell her house, she also chose not to add to this daughter's burden. Instead, she traveled with the daughter when the daughter was available (paying her expenses), or made shorter visits, staying at a nearby hotels. It was unconventional and "unequal", but it worked well for everyone.

If your sister is going to use this as permission to spend mom's money, she should simply be taken off of the rotation list. However, it sounds like your mom is going to have lots of options. Giving her a little time and space to decide what she wants (without the interference of the sister you're concerned about) could be the best gift of all.

Best wishes to all of you at this most difficult time.

"We" is:  Mom, Sis #1, Sis#2, And me. 

This is the statement I sent my mother and my sisters:


This series of reports is intended to create a record of my actions on behalf of my mom, following the death of my father (her husband).  I have a powerful desire to protect my mom and insulate her from any and all financial stress as my father personally asked me to do this about 6 months ago.  I would like to swear a fiduciary oath to her, which basically means, I will always put her interests ahead of mine.  I would also like to clarify, that, while Mom is able, she will be the decision maker regarding her financial status.  I will, at times, strongly recommend a certain solution or path that I think she needs to follow, and I will endeavor to convince her of the veracity of my position.  But if she absolutely refuses to heed my advice, I will obey her directives. 


Mom has already agreed to a financial power of attorney and my lawyer is drafting that as we speak. 

I've outlined to mom that I think she has decision making authority multiple times.  I've told her that I believe she has adequate revenue to pay for a house in whichever locale she'd like (within reason).  If she changes her mind with the rotations, I'll be there to help her buy/finance whatever new residence she's inclined to buy. 
My guess is that after a year or two of this impermanent arrangement, she might decide she needs something more permanent.  I live in a LCOL, spendypants sis lives in MCOL, and sis#2 lives in HCOL.  Pretty much spread out over the entire USA. 


Rosy

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Re: passing of my father
« Reply #6 on: February 07, 2020, 02:07:16 PM »
I am sorry for the loss of your father. I'm your mom's age and yes, thanks to your father's service time, she is set for life.

1. Consider holding off on making any changes that do not need to be made right now.
You are grieving and it is hard to be level headed during such a trying time.

2. I assume it will take a while to find a buyer for the farm, this will give your mom a bit of time to say good-bye to the place, (and give her something to do) time to pack up and/or let go of her memories and treasures.
Just because she is willing to sell the place and knows she couldn't deal with it on her own doesn't make it any easier leaving behind her life as she knew it.

3. Children have good intentions but as long as she is of sound mind and body, she should have the final say in how and where she lives. She may change her mind in a year - why not? Once she's out of mourning and has made the rounds with the kids, she may decide a nice little condo of her own would suit her better.
Privacy and having control over your own life is freedom, she already has security - all you need to do is be there for her when she needs you or make new, different arrangements when the time comes and she can't live on her own.

My family is long-lived - so I decided it was OK to spend $5K on improvements in the garden because I'll still have a minimum of 10 years to enjoy it. By 80-90 I'll just sit out there with a cup of coffee in my hand enjoying the butterflies or watching the birds and the squirrels. It will probably do me good to putter about a bit, but I already planned for low maintenance and a nice little gazebo area where I can just tend a couple of flowerpots instead of a vast garden.
... and in the event that I do die earlier, I will have enjoyed the pleasure of one more project that made me happy.

Do take the time and really listen and consider your mom's wishes. Have several conversations with her over the next year and let her know she can always change her mind. She may be happy to have you handle her monetary affairs and be too overwhelmed to make any decisions on her own at present, but at 70 she will have definite ideas on how she wants to continue living her life.
Living three months with each of her children may be fine for right now but down the line, she may feel differently or choose to live on her own, with a friend in a retirement community or permanently with one of her children.

4. The sister who is already planning on a larger car and house may be a problem. If she is someone who truly cares for your mom despite her spendy ways and immediate tendency to try to take advantage of the situation - well then, if she is close to your Mom and Mom would be happy there, it could be a future solution, but would require your financial (strict) supervision).
However, this could just as easily spiral out of control and turn into elder abuse by a greedy tyrant who is only looking out for herself. Mom is probably unlikely to die in five years and just that statement or perhaps expectation alone is truly worrying.
If she lived there with her with no one else to see what really goes on then it is entirely possible that your mom may give in to pressure mainly because she is currently at her most vulnerable and in a more fragile state of mind.

If you think there is a possibility that your mom may need to be shielded and protected I'd strike this sister off the rotation list, period.

5. You didn't mention whether your mom is financially savvy or not, can she handle her own expenditures, bills and so forth? 
It would help if you set a monthly/annual budget together with her to have available to draw from each month. It will give her a better idea of what she has and how much she can comfortably spend each month - whether she actually spends it or not is not the issue. She needs to know she is secure, no matter what.
Besides that establish a separate account for vacation, extras - frivolous things and emergencies. She needs to know she can safely draw on X and enjoy her life without any money worries.

Even frugal people spend money and it is entirely possible that there is a thing or two she'd like to do that she hasn't ever done or not done in a long time, because she was busy with your dad or he didn't have an interest in it.
Could be anything from seeing a long lost cousin your Dad didn't care for or buying something crazy or just seeing a broadway show or an expensive exhibit - just sayin'.

Her life is not over, just very painful right now.
Give her a bit of time to rediscover herself and deal with the grief of losing her husband and her home.

6. Eventually, she will have different expenditures and expectations in her new life - so this is not the time to set budgets in stone or force decisions that might not be ideal in a year from now.
You may have to be on the alert about sis wanting money for a new expensive lifestyle that she could never afford on her own.
Keep the lines of communication open.

7. Ditto on the power of attorney and everything else you need to set up ahead of time so if something happens you can step in and make decisions - solo.
Your dad had enough confidence in you to entrust your mom's finances to you, better yet, so does she.
Honor it by keeping her best interests at heart, letting her make her own decisions and protecting her from anyone who thinks mom's money is a free for all or a license to live well above one's means.

I will not address the investments since I have no experience, but I happened across this post this morning which discussed a strategy you may find helpful in your decision-making process.
The discussion as such includes considerations and a pragmatic approach to what course of action to take.
 https://forum.mrmoneymustache.com/ask-a-mustachian/92-year-old-investor-recommendations-needed/

I think that Laura 33's answer would be helpful in arriving at and handling annual expenses/budget in a simple way so that your mom always knows what annual funds she has available.

Again, my condolences and my best wishes for the future. 







Catbert

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Re: passing of my father
« Reply #7 on: February 07, 2020, 02:56:21 PM »
So sorry for your and your family's loss.  My comments come from the perspective of someone about your mother's age (assuming she is a few years younger than your dad).

I think you've gotten good advice already.  I agree that at her (our) age  rotating among 3 different cities and children is likely not a long term solution.  Selling the farm now and rotating for awhile seems a good interim solution.  Spending money to upgrade the house and lifestyle of one child seems ill advised at this point.  Maybe she'll find that one of her children is a better fit overall and will stay full-time.  Or some of the spouses may not want to have an MIL living 33% of the time with them.  (Certainly I would not have wanted my perfectly nice but very different than me MIL spending longer than 2 weeks a year.)  Or once the initial grief is over your mom may want to  move into a senior community and live alone. 

Let me tell you one story.  A woman I knew had some health issues and wanted to move in with her daughter and family.  Most thought the mother was a difficult person, but daughter had made up with her after a rocky child and early adulthood.  Daughter's house was  too small to add MIL so they bought a large house together using the proceeds of each of their homes.  Situation started out okay, but deteriorated over the years.  However they were all stuck in the house.  Unfortunately, they bought at the height of the housing market back in the 90s so they were stuck.  Mother eventually died.  So...Encourage your mother not to "invest" in larger home for sister #2 unless and until she's gone through at least a couple of rotations of living there and knows that's where she wants to stay.

The good news is that your mom has plenty of money for a comfortable retirement.  Since she has the means I suggest that she contribute something monitarily to each household while she's living there.  That could be utilities, food, additional streaming services and/or whatever.  She'll be a member of the family, not a short term guest.  (If she didn't have the means I would have different opinion.)

If you're 70/30 split means 70% stock and 30% bonds that sounds about right.  If you meant the reverse I think that's too conservative.

Thanks for trying to get your mom well set up.

Cassie

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Re: passing of my father
« Reply #8 on: February 07, 2020, 03:05:39 PM »
I am close to your momís age and she needs her own space. I would buy a condo or rent a apartment. I am so sorry for your loss. Your mom could easily live 20 more years.

mlipps

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Re: passing of my father
« Reply #9 on: February 07, 2020, 03:17:36 PM »
My deepest condolences for your loss. I think there are lot of really great and compassionate ideas in this thread. I lost my best friend suddenly in Apr 2018 and my dad less suddenly in Oct 2019, so I have some perspective to offer perhaps. There is a common adage in financial planning/life wisdom etc to not make any decisions for a year after a loss. I think that some of this stuff is so obvious it's fine, like rolling over the IRA and maybe adjusting the investments. The bigger stuff, take a deep breath. I literally don't even remember what I did for the 3 months after my best friend died. It's a black hole. It may feel like you are rational and making good decisions, but everyone around you may not be. Give it some time and sit on the decisions before Mom sells the farm and moves in with any of you. This is just so much to process in a short amount of time.

Take care.

DaMa

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Re: passing of my father
« Reply #10 on: February 07, 2020, 03:47:57 PM »
Sorry for your loss.  I think you are in good shape.  Considering you are spread around the country, I think that the plan to spend 1/3 of the year in rotation is a good one.  I could see myself doing this in her shoes.  I could see it getting old after a few years, though.  You should make sure your mother knows she is free to settle where ever she likes whenever she is ready.  Also, I'd make sure she knows she could do a rental in each location if she prefers that to living in her child's home.  (i'm assuming vacation rentals are available.)

For me, though, I have a great network of girlfriends.  They are a bigger part of my day-to-day life.  I would rather live close to them and visit my children regularly, if I had to choose.   Just food for thought.

moneypitfeeder

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Re: passing of my father
« Reply #11 on: February 07, 2020, 05:42:36 PM »
I am so sorry for your loss. My father passed several years ago, unexpectedly, and left my mom in a similar situation; pension, annuities, 401ks, money markets. Do you have any knowledge of your ancestry? I.e., my mom and I know that women in our family typically live to 92-98, so we factor for a minimum of 100 (I'd pull my own plug after that, lol). That info could help with planning. Also, I hope that you are able to protect her assets from spendypants, and keep her secure. I'd also mention, to look after her mental state of being, my mom was married to 1 man since adulthood, and they did not have "friends." She is now effectively alone since me and my sibs don't live in her state. I check-in by phone regularly because I might be the only human she speaks to in a day. I hope your mom has more of a support network locally. My mom does still have living siblings that live nearby that check-in and make her get out of the house every so often, I just can't count on that as daily human interaction.

ericbonabike

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Re: passing of my father
« Reply #12 on: February 13, 2020, 06:52:09 AM »
Well, my mother has a few health scares but her mom (my grandma) lived into her mid 80's.


I got my dad's IRA rolled over into my mom's IRA.  He was invested at USAA and was using an "actively managed" account.  When I moved his assets over, we got them to move them into mom's unmanaged IRA account.

Yesterday, I liquidated all of his holdings, and USAA had said they wouldn't charge us any fees for that.  But, it looks like they had him in 17 different mutual funds.  And although the "Fee" for selling was zero.  They charged a $45 commission when they were sold.  Holy crap.  45 * 17 = $765.  In some cases, they had him in mutual funds with total balances of less than 3000.  What a scam.

The more I learn about the financial industry, the more irritated I get.  When my wife and I got married, I looked through her accounts, and same deal.  A very mysterious blend of high expense mutual funds.  And for the uneducated, it makes it seem like the financial adviser is cooking some exotic and proprietary recipe which will help you get to financial security sooner.  But in the end, they're just baking in fee after fee after fee.

disgusting.




historienne

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Re: passing of my father
« Reply #13 on: February 13, 2020, 02:44:39 PM »
Just a note on the rotating-house plan: when/if your mother needs regular medical attention, this is going to result in serious continuity-of-care issues.  I would encourage you to have her pick a home base for medical care purposes, even if she spends months at a time elsewhere.  She needs to have 'her' doctors and specialists, not be seeing a new endocrinologist every time she goes in.

Ideally, her home base would be a location that offers good retirement/nursing home options for the very probable situation that she ends up needing a higher level of care than any of you can provide in your own houses.  That will also enable continuity of care if she makes that transition.

Finally, I would think seriously about her mood and mental health.  Moving away from her current social network and experiencing the loss of a spouse are both significant risk factors for depression.  Close family relationships may help alleviate this, but it would still be a serious concern for me.  I'd worry a lot that the rotating house plan sets her up to not be able to build a sustaining social network in any location; and that, no matter how close her relationships with her children and their families are, it will strain those relationships if they are expected to serve as her only meaningful source of social contact.  Again, you know her situation and personality better than I do, but I would advocate for her to have a permanent home base (either in one her children's homes, or nearby), and to engage in regular visits to her other children.

ender

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Re: passing of my father
« Reply #14 on: February 13, 2020, 04:36:41 PM »
For spending there's no reason to do anything drastic for 6 months.

Everyone will be grieving.