Author Topic: Am I being an ungrateful son / mental hack to deal with parent's finances?  (Read 7849 times)

AtlantaBob

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Hi all,

Hoping to get your perspective here. I've got two elderly parents whose financial lives I've currently managing. They're fairly complex, and I'm wondering if it would be reasonable to charge a small fee for managing these issues. I feel like an ass for even asking about it, but before you judge me, let me give you some background.

Me - single, early 30's making north of $125K / year in Atlanta. Have a stressful job that requires more than 50 hours/week and a personal situation (out-of-town girlfriend) that limits time on the weekends. I'm their only son.

Them - mid 70's, net worth of approximately $3.5 million. The biggest issues include (a) managing the significant refurbishment and rental of two properties, (b) documenting some sizable (low $100K's) tax losses for past/future IRS filings (more complex than it might seem as these were private deals), and (c) helping to gather information on 20+ accounts (yes, it's a mess) for tax filings. Their expenses are basically covered by pensions +social security, and their desire is just to maximize the portfolio. Due to family health issues (Dad and Grandma are currently in a long-care term home), I just feel completely stressed out all of the time.

I want to emphasize that my idea is more of a mental hack than anything. I'm not trying to nickel and dime them, but I realize that my personality is such that, if I'm going to be "paid" for something -- say at $250 / month -- it's going to be something that I'm going to stay up late at night to do and do right (even if I dedicate significantly more than 10 hours to it), while, if I'm not, it tends to get put on the back-burner (especially vis-a-vis personal relationship issues, and business development opportunities at work).

Again, I feel like an ass to even suggest this, but I am having a hard time holding myself accountable to doing the work on a volunteer basis, and every month that I don't get this done, they're loosing out.

Thanks for your comments - even if you call me a jerk.

[Apologies if this is posted twice. The form software says that I posted this already, although multiple views on other devices says no].

former player

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You have my sympathies.

If I were you I would be strongly suggesting to your parents that simple is the way to go.  Tell them you would rather that the limited time that you have to spare was spent with them rather than with their money.  So, they should sell the rentals, as is.  They should get an accountant to help with the taxes (you could offer to liaise/oversee).  They should put all their money, including the proceeds of the rental sales, into index funds/bonds.  They should relax in the knowledge that they no longer have to worry and no longer have to burden you with anything but a watching brief.

In short: you are right that this is work that should be charged for, but not that you should be the one doing the charging.  Hand it all over to the professionals.

Choices

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Your feelings are completely understandable, and your parents' financial situation does seem complicated. 20+ accounts is ridiculous. Can they consolidate accounts and sell the rentals?

If they're no longer working, then 1 IRA, 1 taxable account, and 1 checking account per person seems reasonable.

While you'll likely get the money eventually as an inheritance (have they mentioned anything about this? Do they have wills?), it's clearly too much for you to take on right now and is affecting the personal relationship you have with them. If they're not willing to simplify dramatically, you might be able to help them find a good accountant.

okits

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I also get the impression that you're overburdened.  Your parents' affairs seem extensive enough that paying a professional seems reasonable.  Paying you a nominal sum to hack your mental priorities doesn't take all your other stressors off your plate nor give you more time to manage your dad and grandma's health affairs (let alone spend quality time together). 

My sympathies for your difficult family situation.  In this case I'd worry less about financial optimization and more about the quality and quantity of days your family can enjoy together.

dilinger

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Your feelings are completely understandable, and your parents' financial situation does seem complicated. 20+ accounts is ridiculous. Can they consolidate accounts and sell the rentals?

If they're no longer working, then 1 IRA, 1 taxable account, and 1 checking account per person seems reasonable.


Do it now, while they're still alive to answer questions.  It'll be a much bigger pain to clean up finances after they're gone.

Tjat

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I think if you're being tasked to manage their finances, you should be able to enact reasonable modifications to simplify things. 70+ year olds in LTC facilities don't need multiple rentals and a battalion of investment accounts that their kid manages for free

Another Reader

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I disagree with the people that want you to re-make your parents' finances.  They did not ask you to do that and that's not your job.  Foolishly pushing simplification for your benefit would cost far more than them paying you or someone else to do the work.   The tax consequences alone of selling rentals that are likely fully depreciated and carrying large capital gains are huge.

They need two types of help. With regard to the rentals, they need to hire property management.  Finding decent management that can handle renovations is your job here.  It's ok to tell them that you can't do it yourself and offer a fully vetted alternative.  If they do not want to go that route, you can suggest selling the rentals, with their understanding that there will be significant tax costs.

With regard to the losses, perhaps their accountant can suggest a lower priced book keeping person to gather and organize the documents for the accountant's review.  Again, you can't DO the work, but you can find the people that CAN do the work.

You can be the coordinator sitting in your office in Atlanta.  It sounds like your mother is the remaining competent person in the family, and if that's the case, working with and through her would be the way to go.

FIREby35

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Are they just showing you how to run a rental business you are going to inherit? You are the only kid, right? Have you talked with a trust/estate attorney for high net worth people? Sounds to me like some communication about what is going to happen with these assets is absolutely in order.

You are not a jerk for wanting to be paid for your time. However, you might be shortsighted in the extreme.

Fishindude

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I know what you are dealing with, had to handle and clean up my moms financial mess the last ten years or so of her life until death.
Never considered charging anything, but she didn't have all that much anyway.   If you do decide to do something like that, keep it all on the up and up with them, any siblings, etc.

Sounds like the best thing you could do is sell off some assets and simplify their finances.   Since they can live off of their pensions & SS, just put the proceeds in something safe and simple like CD's.
If they've not done so, have them prearrange and prepay funeral matters too, that can be a huge burden on family at a stressful time.

They are lucky to have you taking care of things.

RyanAtTanagra

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You had me at "managing the significant refurbishment and rental of two properties".  The rest just confirms the 'yes, you should be compensated'.  You don't have to charge them market rates for your time, if you're worried about it, maybe 50% what they would pay someone else to do what you do.  You both win an equal amount.  And if they pay you out of the estate you're going to end up with anyway, they're not even really paying you, you're just taking some of it in advance.

Miss Piggy

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I don't think you're a jerk at all for wanting to be paid for your time. But honestly, I think the crux of the issue is that you don't really HAVE any time to devote to this, paid or unpaid. Is this how you want to spend what little free time you have?

catccc

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I vote for helping them simplify things so it isn't such a burden on you or them, and outsourcing the accounting work, w/ you a liaison.

The mental hack is "they spent x years and x dollars raising me, helping them with this is the least I can do.  I don't have a family or children of my own yet, this should be doable."  Set yourself some small goals to get things done.  Lay out your steps.  This is the kind of shit that can seem horribly overwhelming, but just take it one step at a time.  Can't do a step because you don't know something or don't have the info?  Well, finding out or getting it is the next step, then.  Yes, I think you are a jerk to ask to be paid.  I might be the only one, though.


« Last Edit: August 08, 2016, 11:00:31 AM by catccc »

purple monkey

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I would do it for my parents, as I would hope they would do it for me.  Withough birthing you, you would not even be here.

Helping with medical is even more rime consuming.

LOL, posting about how everything is NOT RELATED to money.

Do it for free.

RyanAtTanagra

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Yes, I think you are a jerk to ask to be paid.

How many hours/week should one be willing to work for their parents before compensation is justifiable?  10?  40?  120?  Consider he already has a full time job and a life of his own.  Outsourcing the work is fine, but he could probably save them money by doing it himself for cheaper.  I don't see how paying 2x as much for someone else to do it is a win for the parents, just to keep him from accepting money himself.

nobody123

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I would tell your mother that while you appreciate that they trust you with handling their finances, it's become too much of a burden given the complexities and demands of your full-time job.  You could also say that you're uncomfortable handling sums of money this large without professional assistance, because you don't want to do anything to jeopardize their financial security.  I wouldn't ask for a paycheck for doing it, because it doesn't solve the root cause of it being too time-consuming.  Assuming she understands, the two of you can approach your father and determine the best course of action.

catccc

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Yes, I think you are a jerk to ask to be paid.

How many hours/week should one be willing to work for their parents before compensation is justifiable?  10?  40?  120?  Consider he already has a full time job and a life of his own.  Outsourcing the work is fine, but he could probably save them money by doing it himself for cheaper.  I don't see how paying 2x as much for someone else to do it is a win for the parents, just to keep him from accepting money himself.

It depends on the nature and duration of the work.  If my parents own a business and they want me to work 15 hours a week in it indefinitely w/o compensation, no.  If they have a financial situation and want my help with it, and it will take 10 hours a week for the next month, maybe.  If they are doing a remodel and need 40 hours of my help for two weeks, maybe.

Also, my parents wouldn't ask for assistance if it would have such a significant negative impact on my life.  OP's situation could be one of those where you spend more time worrying about doing it than actually doing it, in which case it is his own fault for procrastinating instead of getting things done.  Not saying that's definitely the case, but it may be.

Paying someone else 2x as much to do it would be a win for the parents and a win for the kid.  The parents would have a financial professional doing it (I believe OP is a legal professional?), the kid wouldn't have to look like an ungrateful kid, just a kid that knows his limits and wants the job done right. 

I mean, if the parents are sitting on 3.5M and wanting to maximize when they are already in their mid-70s, where do you think all that money is going to end up?  They are probably maximizing it for his benefit.  (Or they are super paranoid)  Paying a pro isn't unreasonable with those resources.
« Last Edit: August 08, 2016, 11:02:03 AM by catccc »

SKL-HOU

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I wouldn't see it as being a jerk if the OP said he didn't have the time and he just couldn't do it. But he is being a jerk because apparently he does have the time if he gets paid. Not everything is about money.

Another Reader

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Yes, I think you are a jerk to ask to be paid.

How many hours/week should one be willing to work for their parents before compensation is justifiable?  10?  40?  120?  Consider he already has a full time job and a life of his own.  Outsourcing the work is fine, but he could probably save them money by doing it himself for cheaper.  I don't see how paying 2x as much for someone else to do it is a win for the parents, just to keep him from accepting money himself.

It depends on the nature and duration of the work.  If my parents own a business and they want me to work 15 hours a week in it indefinitely w/o compensation, no.  If they have a financial situation and want my help with it, and it will take 10 hours a week for the next month, maybe.  If they are doing a remodel and need 40 hours of my help for two weeks, maybe.

Also, my parents wouldn't ask for assistance if it would have such a significant negative impact on my life.  OP's situation could be one of those where you spend more time worrying about doing it than actually doing it, in which case it is his own fault for procrastinating instead of getting things done.  Not saying that's definitely the case, but it may be.

Paying someone else 2x as much to do it would be a win for the parents and a win for the kid.  The parents would have a financial professional doing it (I believe OP is a legal professional?), the kid wouldn't have to look like an ungrateful kid, just a kid that knows his limits and wants the job done right. 

I mean, if the parents are sitting on 3.5M and wanting to maximize when they are already in their mid-70s, where do you think all that money is going to end up?  They are probably maximizing it for his benefit.  (Or they are super paranoid)  Paying a pro isn't unreasonable with those resources.

+1000.  You nailed it.

RyanAtTanagra

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Yes, I think you are a jerk to ask to be paid.

How many hours/week should one be willing to work for their parents before compensation is justifiable?  10?  40?  120?  Consider he already has a full time job and a life of his own.  Outsourcing the work is fine, but he could probably save them money by doing it himself for cheaper.  I don't see how paying 2x as much for someone else to do it is a win for the parents, just to keep him from accepting money himself.

It depends on the nature and duration of the work.  If my parents own a business and they want me to work 15 hours a week in it indefinitely w/o compensation, no.

Why is helping with a business different than managing their finances, which includes rental property management?

catccc

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Why is helping with a business different than managing their finances, which includes rental property management?

I actually don't think he should help with the ongoing management of their rental properties, which is why I suggested they simplify their situation (i.e. get rid of rental properties.)  Unless they are somehow trying to pass on the rental business to him and he wants to take it over.

RyanAtTanagra

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Why is helping with a business different than managing their finances, which includes rental property management?

I actually don't think he should help with the ongoing management of their rental properties, which is why I suggested they simplify their situation (i.e. get rid of rental properties.)  Unless they are somehow trying to pass on the rental business to him and he wants to take it over.

Oh ok.  The situation as it sounds is that it's ongoing management, which is why him being a jerk to want to be paid for that didn't make sense.  If you change the situation, then of course the answer changes.

Bicycle_B

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Hi all,

Hoping to get your perspective here. I've got two elderly parents whose financial lives I've currently managing. They're fairly complex, and I'm wondering if it would be reasonable to charge a small fee for managing these issues. I feel like an ass for even asking about it, but before you judge me, let me give you some background.

Me - single, early 30's making north of $125K / year in Atlanta. Have a stressful job that requires more than 50 hours/week and a personal situation (out-of-town girlfriend) that limits time on the weekends. I'm their only son.

Them - mid 70's, net worth of approximately $3.5 million. The biggest issues include (a) managing the significant refurbishment and rental of two properties, (b) documenting some sizable (low $100K's) tax losses for past/future IRS filings (more complex than it might seem as these were private deals), and (c) helping to gather information on 20+ accounts (yes, it's a mess) for tax filings. Their expenses are basically covered by pensions +social security, and their desire is just to maximize the portfolio. Due to family health issues (Dad and Grandma are currently in a long-care term home), I just feel completely stressed out all of the time.

I want to emphasize that my idea is more of a mental hack than anything. I'm not trying to nickel and dime them, but I realize that my personality is such that, if I'm going to be "paid" for something -- say at $250 / month -- it's going to be something that I'm going to stay up late at night to do and do right (even if I dedicate significantly more than 10 hours to it), while, if I'm not, it tends to get put on the back-burner (especially vis-a-vis personal relationship issues, and business development opportunities at work).

Again, I feel like an ass to even suggest this, but I am having a hard time holding myself accountable to doing the work on a volunteer basis, and every month that I don't get this done, they're loosing out.

Thanks for your comments - even if you call me a jerk.

[Apologies if this is posted twice. The form software says that I posted this already, although multiple views on other devices says no].

You're not an ass at all for asking us, but emotions run high in these situations. In my opinion, any solution has to address everyone's emotions as well as the practical matters.  I just took care of a dying father with Alzheimer's, so here are some thoughts from 5 years of experience with finances of the intelligent but aging.

It sounds like both parents and son are active, detail oriented people.  The parents have active desires (fix these properties!  maximize portfolio return! keep the 20 accounts for a bunch of reasons that are important in their view!).  Overall, they are getting too old to have the detailed control they used to have, but are unwilling to give it up.  Their solution is for son to be the errand boy implementing their complex system. 

That won't work.  They have to start reducing their involvement.  Whether this is by son following requests, someone hiring professionals (accountant, construction manager, etc), or allowing the son to simplify their accounts:

1. Someone is going to have to face sad, unpleasant pain. Therefore all family members will.  I just went through several years of decline and passing of a parent, including becoming their guardian, so I speak from related experience though the dollar amounts were smaller.  We all grew closer and more loving over time, but only after the issues were confronted.
2. Power of attorney for property and medical should be set up, as should a living will and a will.  Suggest that this happen.  Respect and appreciate their experience, effort, caring, and continued competence, but persist in getting these done.  Right now you're struggling with stuff you don't feel like doing.  It will be worse if their abilities decline and you don't have the legal right to fix the situation.  If they won't do it, you will have to graduallywithdraw from being their errand boy.  That is the precipitating action that you can control. (You can be strategic - mention the need to withdraw, but actually complete easy transactions while proposing to hire pros for others, etc.  But you can't just fill requests without getting progress on matters that need resolution.)
3. As summarized in 1, there will be conflict.  While they are alive and competent, you cannot control them and can only suggest - but if they are not moving towards a solution, you may have to communicate that you can't keep up with their business and yours "because I also have to worry about the future, when these documents are needed."
4. If you don't have arguments/crying/some upset from them in the process of getting the documents set, you will have it when you take control.  One or more of the following will have to happen, and will trigger anger, sadness, etc:
a. You simplify the accounts while they are technically still in charge, because you wheedle/argue/guilt/fact them into it. 
b. You hire the pros to do the detail work, same techniques as a.
c. They are no longer competent, they realize it, they invoke the powers of attorney on your behalf (unlikely).
d. They are no longer competent, they resist invoking the powers of attorney, you go to court to invoke them.  Conflict has become very visible.  This happens to probably over a million families a year.
e.  During and after d, you seek to remain calm and loving and in contact while your parents express anger and disappointment in you, or whatever flavor of emotional expression and response they have to losing control.  These emotions occur because losing control an unpleasant part of aging, but most parents will blame you for it because you're the visible, formerly trusted target - an obvious turncoat, grasping ungrateful wretch, etc.  You listen, smile, apologize, stay calm, take a break.  You do things that need to be done.  You will not be paid except through inheritance.  If you are not to inherit, you get to choose whether you do all this. 

When you were small, you peed and pooped and barfed on your parents.  They cleaned you up and loved you.  Now it's your turn.  You will quite possibly love them more after this experience than before.  Just know that putting off the confrontations makes them worse, not better.  Move toward solutions.

Do not hesitate to seek counseling or advice from support groups, counseling professionals, and agencies that specialize in aging.  Few families have the money yours does, but all have the same emotions.  Caretaker exhaustion is a thing, and it starts with the emotional reluctance you are experiencing.  Move forwards.

PS.  Not to be the male version of Debbie Downer, but this phase is the last time you will ever get to be with your parents.  Once they're gone, they're gone.  Face the confrontations ASAP, both with your own emotions and with your parents' needed decisions, so that you get to the good parts with as little foot dragging as possible.  Joy and peace await after the squalls.  Use your time wisely.

One person's opinion, anyway.
« Last Edit: August 08, 2016, 01:07:38 PM by Bicycle_B »

ysette9

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@Bicycle_B: There is a lot of wisdom in your post. Thank you so much for sharing.

pdxbator

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Sorry to hear you are in such a stressful situation. Is all of their wealth locked up in properties or some in actual cash? Who knows how long they may live, but in their 70s with >$3.5 million, they really need to think about giving some money away.

I would bring up gifting you $10,000 a year to handle these things. It would help you feeling compensated and it doesn't sound like they are big spenders. One of the things my parents have done is gift their children money from their estate. Now that we children are all reasonable adults without drug problems in our 30s and 40s, these gifts are amazing ways to pass on wealth. Sure you will get their estate in the end, but this gift could be useful to help you feeling that you are doing all of their finances for free.

Catbert

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Sorry to hear you are in such a stressful situation. Is all of their wealth locked up in properties or some in actual cash? Who knows how long they may live, but in their 70s with >$3.5 million, they really need to think about giving some money away.

I would bring up gifting you $10,000 a year to handle these things. It would help you feeling compensated and it doesn't sound like they are big spenders. One of the things my parents have done is gift their children money from their estate. Now that we children are all reasonable adults without drug problems in our 30s and 40s, these gifts are amazing ways to pass on wealth. Sure you will get their estate in the end, but this gift could be useful to help you feeling that you are doing all of their finances for free.

Okay, he can't really suggest that his parents start gifting him money!  Gifts are not something the potential recipient cansuggest.  I say that as someone in my mid-60s who is making gifts to family members.  If recipients starting asking "what about this year" that woulds be the end of the gifts. 

Inheritance tax doesn't kick in until ~$5 million (10 for a couple). 

jim555

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Just read the OP post. 
Let me get this straight, you want to be paid by your parents to look after your parents?  If you were my son I would pay you and then cut you out of the will as a surprise.


TrMama

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Hoping to get your perspective here.


You're not an ass at all for asking us, but emotions run high in these situations. In my opinion, any solution has to address everyone's emotions as well as the practical matters.  I just took care of a dying father with Alzheimer's, so here are some thoughts from 5 years of experience with finances of the intelligent but aging.

It sounds like both parents and son are active, detail oriented people.  The parents have active desires (fix these properties!  maximize portfolio return! keep the 20 accounts for a bunch of reasons that are important in their view!).  Overall, they are getting too old to have the detailed control they used to have, but are unwilling to give it up.  Their solution is for son to be the errand boy implementing their complex system. 

That won't work.  They have to start reducing their involvement.  Whether this is by son following requests, someone hiring professionals (accountant, construction manager, etc), or allowing the son to simplify their accounts:

1. Someone is going to have to face sad, unpleasant pain. Therefore all family members will.  I just went through several years of decline and passing of a parent, including becoming their guardian, so I speak from related experience though the dollar amounts were smaller.  We all grew closer and more loving over time, but only after the issues were confronted.
2. Power of attorney for property and medical should be set up, as should a living will and a will.  Suggest that this happen.  Respect and appreciate their experience, effort, caring, and continued competence, but persist in getting these done.  Right now you're struggling with stuff you don't feel like doing.  It will be worse if their abilities decline and you don't have the legal right to fix the situation.  If they won't do it, you will have to graduallywithdraw from being their errand boy.  That is the precipitating action that you can control. (You can be strategic - mention the need to withdraw, but actually complete easy transactions while proposing to hire pros for others, etc.  But you can't just fill requests without getting progress on matters that need resolution.)
3. As summarized in 1, there will be conflict.  While they are alive and competent, you cannot control them and can only suggest - but if they are not moving towards a solution, you may have to communicate that you can't keep up with their business and yours "because I also have to worry about the future, when these documents are needed."
4. If you don't have arguments/crying/some upset from them in the process of getting the documents set, you will have it when you take control.  One or more of the following will have to happen, and will trigger anger, sadness, etc:
a. You simplify the accounts while they are technically still in charge, because you wheedle/argue/guilt/fact them into it. 
b. You hire the pros to do the detail work, same techniques as a.
c. They are no longer competent, they realize it, they invoke the powers of attorney on your behalf (unlikely).
d. They are no longer competent, they resist invoking the powers of attorney, you go to court to invoke them.  Conflict has become very visible.  This happens to probably over a million families a year.
e.  During and after d, you seek to remain calm and loving and in contact while your parents express anger and disappointment in you, or whatever flavor of emotional expression and response they have to losing control.  These emotions occur because losing control an unpleasant part of aging, but most parents will blame you for it because you're the visible, formerly trusted target - an obvious turncoat, grasping ungrateful wretch, etc.  You listen, smile, apologize, stay calm, take a break.  You do things that need to be done.  You will not be paid except through inheritance.  If you are not to inherit, you get to choose whether you do all this. 

When you were small, you peed and pooped and barfed on your parents.  They cleaned you up and loved you.  Now it's your turn.  You will quite possibly love them more after this experience than before.  Just know that putting off the confrontations makes them worse, not better.  Move toward solutions.

Do not hesitate to seek counseling or advice from support groups, counseling professionals, and agencies that specialize in aging.  Few families have the money yours does, but all have the same emotions.  Caretaker exhaustion is a thing, and it starts with the emotional reluctance you are experiencing.  Move forwards.

PS.  Not to be the male version of Debbie Downer, but this phase is the last time you will ever get to be with your parents.  Once they're gone, they're gone.  Face the confrontations ASAP, both with your own emotions and with your parents' needed decisions, so that you get to the good parts with as little foot dragging as possible.  Joy and peace await after the squalls.  Use your time wisely.

One person's opinion, anyway.

This is very wise. We're in a similar position with my MIL. Not quite as complex, or as valuable as your parent's estate, but a gigantic time and energy suck nonetheless. Our basic philosophy is that if she doesn't accept our help, in the way we choose to offer it, then she's free to either manage her affairs herself or seek help elsewhere. She is not free to ask us to manage her affairs in the way she dictates. We're nice when we deliver this message, but the boundary is firm. If she wanted to maintain a complex portfolio like your parents, we would not be willing to help her.

We hired a property manager for the rental she mis-managed for decades. DH tried to manage it himself, but in the end it was just too big of a mess for him to deal with. The property manager has lifted a huge weight of our shoulders. DH has now turned his attention to selling the place, and this has become his second job.

If I were you, I would:

1. Get a property manager in to manage the rentals and oversee whatever work remains.

2. Get a realtor to list both properties. Yes, there will be tax consequences, but this will be the case regardless of when they're sold. So, just do it now and save yourself the headache.

3. Hire an accountant to deal with the tax stuff

4. Hire a financial adviser to simplify the 20 accounts.

AtlantaBob

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All,

Apologies for the slow reply.

Thank you for weighing in on my situation. Especially Bicycle_B -- it sounds like you've been there and you've done that. You're absolutely right that emotions run high in these circumstances. I've already been in the ICU with my unconscious Dad expecting for him to die at any minute. It is an absolutely horrible experience. And, for anyone who comes across this post later, the freaking challenge is all emotional. Executing logically (my day job) is pretty easy. There is a weird cloud that comes over things when you're closing our accounts, and (by extension) closing out dreams that your parents had for those funds, which now look like they'll never be achieved. Maybe I'm not emotionally mature enough, but it is a hell of a thing to confront.

For those who think that I'm an ass - you may be right. I don't have kids of my own, and I don't know the sacrifice that my parents made for me when I was an infant. You've made a good analogy, though -- if they were able to put up with my (literal) shit, then I should be able to put up with their (financial) shit for a while. The issue is with how long it drags out. I want to fix it, but at 1 am, a crying baby is a lot harder to ignore than a mutual fund still sitting in a small account.

Thanks for everyone who pointed out a CPA (or perhaps lower priced bookkeeper) to try and consolidate the accounts. It's something that I've been trying to do for a while, but different firms have different requirements (how the heck are you supposed to get a Medallion Signature Guarantee for someone in assisted living), and it's a challenge.

Again, thanks for your honest opinions.

AtlantaBob

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Are they just showing you how to run a rental business you are going to inherit? You are the only kid, right? Have you talked with a trust/estate attorney for high net worth people? Sounds to me like some communication about what is going to happen with these assets is absolutely in order.

You are not a jerk for wanting to be paid for your time. However, you might be shortsighted in the extreme.

FIREby35,

My parents are great people, but they aren't great landlords--they've let some valuable property go unrented for years. We've spoken with attorneys, and it's clear that the properties will pass to me. I want to do the best for them (as a legacy for them as much as anything else). I've been reading books and reading biggerpockets.com to try to learn some hints of the landlord trade.

I completely get that I'm in a situation that a lot of people would kill to be in -- poor little rich boy -- but the emotional aspect of things can be weird. Two to three years ago (before their health problems), I would never have expected feeling these weird emotions.

Sorry- didn't mean to turn this into an emo blog.

AtlantaBob

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Your feelings are completely understandable, and your parents' financial situation does seem complicated. 20+ accounts is ridiculous. Can they consolidate accounts and sell the rentals?

If they're no longer working, then 1 IRA, 1 taxable account, and 1 checking account per person seems reasonable.


Do it now, while they're still alive to answer questions.  It'll be a much bigger pain to clean up finances after they're gone.

A very good point. And for anyone else who might have parents before something like this happens -- be sure to get the information while they're in their right mind.

It's particularly frustrating when someone is convinced that they know the location of a bank deposit box.... at the same time they're convinced that their 1956 Oldsmobile is just outside in the parking lot.

FIREby35

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Are they just showing you how to run a rental business you are going to inherit? You are the only kid, right? Have you talked with a trust/estate attorney for high net worth people? Sounds to me like some communication about what is going to happen with these assets is absolutely in order.

You are not a jerk for wanting to be paid for your time. However, you might be shortsighted in the extreme.

FIREby35,

My parents are great people, but they aren't great landlords--they've let some valuable property go unrented for years. We've spoken with attorneys, and it's clear that the properties will pass to me. I want to do the best for them (as a legacy for them as much as anything else). I've been reading books and reading biggerpockets.com to try to learn some hints of the landlord trade.

I completely get that I'm in a situation that a lot of people would kill to be in -- poor little rich boy -- but the emotional aspect of things can be weird. Two to three years ago (before their health problems), I would never have expected feeling these weird emotions.

Sorry- didn't mean to turn this into an emo blog.

Hey Bob, I can't say I've confronted that situation and its consequent emotions. I would advise being clear headed in remembering you will receive all of those assets and be able to manage them in due time. I would say asking to be paid is not the way to deal with the emotional toll their aging is causing.

It sounds like the issue is more how to deal with aging and death than being paid for your time.

Good luck sorting it all out.
« Last Edit: August 11, 2016, 08:28:48 PM by FIREby35 »

GreenEggs

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I'm helping my dad right now with similar issues. 

You are being asked to do a lot for your folks and you have the right to ask that they simplify things.  You'll have to do the footwork for them, but it benefits you in the end.  If they want to pay you that's good, but if they don't it doesn't "really" matter.  You're going to be in the driver's seat sooner or later, so you'll be doing it anyway.

Biggerpockets is good.  Learn what you can there, so you will make better decisions about guiding your family.  Be sure to understand the tax implications before selling off property now, that you might inherit in a few years. 


kenaces

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I could never charge my parents for this, BUT I would definitely get professional help; accountant, property manager, lawyer, financial planner.......

With This Herring

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*snip*

Inheritance tax doesn't kick in until ~$5 million (10 for a couple).

Just to clarify for those following the thread:
This threshold (adjusted annually at the moment, $5.45M for those who die in 2016) is for US federal taxes and it is per person, so a married couple would have twice that for their joint estate.  Your state may or may not impose taxes related to estates and/or inheritances.  Your state may have a different threshold for estate taxes, the same threshold, and/or may tax the inheritors as opposed to taxing the estate.

I agree with everyone who says to hire out a lot of this stuff.  You have a full plate, and even hiring it out will leave you many hours supervising and take time away from seeing your loved ones.

This thread has been very sad and informative.

frugaldrummer

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1)  Agree with delegating to professionals wherever possible.

2)  The mental hack?  "Gee, I've got this great side gig that's going to earn me $3 million dollars in a few years"

I'm sure that if you broke down the hours you work on this and the payoff in terms of inheritance (assuming you are the heir, of course) and you might be thrilled to know you are working for thousands of dollars an hour.

Bicycle_B

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Your feelings are completely understandable, and your parents' financial situation does seem complicated. 20+ accounts is ridiculous. Can they consolidate accounts and sell the rentals?

If they're no longer working, then 1 IRA, 1 taxable account, and 1 checking account per person seems reasonable.


Do it now, while they're still alive to answer questions.  It'll be a much bigger pain to clean up finances after they're gone.

A very good point. And for anyone else who might have parents before something like this happens -- be sure to get the information while they're in their right mind.

It's particularly frustrating when someone is convinced that they know the location of a bank deposit box.... at the same time they're convinced that their 1956 Oldsmobile is just outside in the parking lot.

If their residence area has many banks, finding out which one has their safety deposit box could be time consuming.  I feel your pain.

My experience with banks is that they will hold you firmly at bay if you cannot document that you are legally in charge, but very helpful afterwards.  Consequently, if you can't learn the box's location from parents, a legal action that places you in charge of their affairs will eventually empower you to get a straight answer from each bank. 

Such legal actions vary from state to state.  In the states I dealt with, either a financial power of attorney document was required, plus some triggering event to show it had come into effect, or a court ruling that responded to a petition for guardianship... in either case, a court response was required.  That may not be case for you, of course.  A good attorney who knows family law might help, but good ones are hard to find.  There are also attorneys who specialize in estate law - might be relevant considering the size of the estate.  Good luck!!

poppan

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If they sell during their lifetime they will probably owe a lot in capital gains. Check to see if their state and state the property is in (if different) have cap gains on top of the fed cap gains.

When the first spouse dies, assuming the property is community property the surviving spouse gets to step up the cost basis to market value. I.e. If the surviving spouse sells the property soon after death of first spouse, there will be zero cap gains.

When both your parents pass and you (presumably) inherit the property, you also get a step up in the cost basis.

I understand selling will get rid of a big headache but it's important to consider the tax angle, so wanted to mention the step up scenarios.

TaxChick

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I agree with Poppan. If your parents do not want to sell the rental properties, consider getting a rental management company. The basis step-up when you inherit the property removes the tax cost issue. But there may be non-financial reasons to divest of the property now, such as maintaining your sanity.

MayDay

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My MIL has 3 rental houses, and won't sell them until after she dies (ie, she will will the houses to us, rather than cash them out while she is still alive) because of the cost basis thing the PP mentioned.  Although we would rather her sell them (and she may have no choice if she needs expensive care) I do understand her rationale.  Unfortunately, though, that will translate to us having to deal with them from out of town (both possibly helping her manage them as she ages, and getting tenants out and selling them when she passes).  Oh well.  At least that is the only complicated part of her estate! 

Now, as I mentioned, I would still rather her sell them.  And if she had 3 million besides the houses, maybe H and his sister would push her a bit more to just sell and pay the taxes.