Protecting Your Assets: A Cautionary Tale, Part 1

As we age, and, as we deal with aging parents, we become more and more concerned with protecting assets. Sometimes, we can do everything we think is right, only to discover that doing what is right can result in getting it wrong.

The following is a guest post from Ina Nenninger, who turned a negative experience into a cautionary tale for others.  Ina wants nothing more than to help people avoid going through what she did, and we are grateful to her for her hard-won wisdom: 

My family has just been through the wringer. We’ve learned a lot of lessons since the death of my 96-year-old mother eight months ago, and they were learned the hard way. Apparently, we had made several serious mistakes in our efforts to take good care of her. And now we are paying for those errors. Perhaps sharing some of the pitfalls we confronted will help others avoid them.
At the age of 86, my father contracted to have all of his and my mother’s finances handled by a very large bank in Boca Raton, FL. The wealth management side of the bank would manage their investment portfolio, pay all household bills, and generally take care of anything having to do with their money. Let’s call that a custodial account. Two months later Dad had a massive heart attack and passed away. It seemed that my father had saved the family one headache: the management of mother’s finances would be well taken care of by this large and highly reputed banking institution he had selected. Since I was the only surviving offspring, and I lived 1000 miles away, this was a huge load off my shoulders.
Mother lived for 12 more years. She had one account manager at the bank during that time. This woman handled just about everything that had to do with income and expenditures for Mom. The children and grandchildren visited from out-of-town as often as we could arrange to, but felt that we were fortunate that we didn’t have to worry about daily decisions about money or about 24/7 in-home care.
We were naïve. Things that we did, but you should not:
1. Assumed that a large, well-known institution would certainly handle our account with the same good intentions as we would have used.
2. Did not recognize that actions that are legal are not always moral nor ethical.
3. Assumed that everyone who works at a well-known financial institution and is responsible for handling the finances of their clients would act with integrity and the highest level of ethics.
4. Felt secure that since we had hired people to take care of mother’s daily needs and of her finances, we did not have to keep a very close eye on those aspects of her life.
5. Thought that the concerns voiced by the elderly were just cranky “whinings”.
What did happen:
My father was well-versed in financial and investment management, estate planning, trusts and funds. With his lawyer, he designed a complex estate plan for himself and my mother during the 1990s. Their wills had not been changed since then.

Beginning around 2012, I began to urge the manager for my mother’s custodial account to have her will reviewed and updated in consideration of any changes in tax law. In addition, through discussions with my mother I understood that she wanted to have her first great-granddaughter (her only great-grandchild at that time) treated as equal to her 4 grandsons in her will. She also wanted to remove her previous caretaker from receiving a bequest and add her current caretaker (who began working for her in 2011).
It took about 2 or 3 years before they actually began the process of updating the will (efficiency was not their strength). When my mother complained to me of some of her concerns about the account manager (the amount of attention she was paid, the slow response time to her requests, etc.), I assumed that the self-focus of the elderly had set in. I thought this was typical “whining” and the request for more attention.
The account manager hired an attorney and took my mother to the necessary appointments to work on this project. A new will was signed on November 6, 2014. After mentioning this to my own advisors in Virginia, I realized that I should see the will. They made me aware that anything that didn’t seem appropriate could be changed readily by mother during her lifetime, but that it would be nearly impossible after her death. And so I began the quest to receive a copy of the will.

I have a year’s worth of email threads showing the request to see that, including some arguing about my right to see it. The account manager actually wrote “why would YOU want to see the will?”. Finally, the account manager said in a phone call that my mother would have to request that a copy be sent to me. Mom, at the age of 95, did follow my instructions about what to say and asked for that copy of the will.
I received the will and read thoroughly through the short document. I did not see anything worrisome, though I was surprised not to see the great-granddaughter mentioned. And by that time, a second great-granddaughter had been born as well.

Mom passed away in May 2016 at the age of 96.

Stay tuned for Pat 2.