Senior savings - life insurance

6 years ago

My mother's husband passed away this week. Mom is 81 going on 82, lives with my husband and I. Doesn't have a lot of expenses but will receive 25k +or- in life insurance proceeds. She is anti bank, won't put her money in a bank, won't even leave cash in a safe deposit box within a bank. She want's to know what she should do with her money. Any ideas? What would you do? Just looking for a few ideas, simple ones though. Thank you in advance.

Featured Answer

Elmer J Fudd

6 years ago

last modified: 6 years ago

Checking accounts, savings accounts, CD accounts, are all deposit accounts. FDIC insurance covers balances in most banks up to their max, which is $250 K per person and so $500K on joint accounts. Similar balance insurance (for theft, not market movement) is provided for security accounts by SIPC.

But Heavens to Betsy, this is irrational. I understand there's no reasoning with an 81 year old who doesn't want a bank account. It's a ridiculous point of view.

Tell her you'll look after it for her. Open whatever kind of account you want her to have, in your own name, have her sign the check payable to you and then deposit it. If you have siblings, tell them what you're doing and why. Case closed.

My wife struggles with her mother, more than a decade older than yours, in dealing with unreasonable wishes and constraints. I need to remind her to tell her mother - "here are the two or three reasonable alternatives I've found for you, what you're saying isn't feasible. Either you choose one or I will for you." That approach works and brings to an end the nonsensical conversations her mother wants to have repeatedly, hour after hour. Her mother has no dementia of any kind, she's just not very smart and makes up too many illogical rules about how things "must" be.

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Comments (47)

S Rodriguez
6 years ago
Open a bank account for her. Be firm. If you had a house fire, that cash would disappear into smoke. Or could be stolen in a break in.
two25acres thanked S Rodriguez
Adella Bedella
6 years ago
I'd ask for POA and put it in a bank and help her manage it. She can ask you to get cash if she needs it. I assume her husband must have assumed this role for her.
two25acres thanked Adella Bedella
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morz8 - Washington Coast
6 years ago
Not what Mom wanted to hear, but FDIC insured bank for that amount of cash. Savings, Money Market (where she could write a few checks on the amount each month if needed), CD - for just a few ideas.

A friend of ours has just lost his father and has been helping his mother get affairs in order. He was horrified to find a large amount of cash in a bank safety deposit box.
two25acres thanked morz8 - Washington Coast
eld6161
6 years ago
last modified: 6 years ago
Although I wouldn't call 25K a small amount, it's not a life-changing large amount either.

It's her money. Get a fireproof box and put the cash in it. Hide it in your attic. Done.

ETA: Just saw Morz post as I posted. I keep some cash in my safety deposit box. Why is that horrifying?
two25acres thanked eld6161
morz8 - Washington Coast
6 years ago
last modified: 6 years ago
Eld, notice I said LARGE amount. FDIC insurance covers only deposit accounts.
two25acres thanked morz8 - Washington Coast
katlan
6 years ago
I kind of agree with eld. It's her money. Fire proof box, heck put the box in the freezer.

Or maybe a compromise. Some in the bank, some cash at home.
two25acres thanked katlan
morz8 - Washington Coast
6 years ago
Elmer, I'm in the same position with my own mother, 90 years old just two weeks ago. But, I have an 'ace in the hole'. I will call my brother, and say...would you tell Mom this, or that....and when she's heard it from him, she will graciously concede immediately ;0) It would not occur to her to disagree with him.
two25acres thanked morz8 - Washington Coast
two25acres
Original Author
6 years ago
It's frustrating yes but here in Wisconsin just this week Guarantee bank closed all it's locations and of course there was pandemonium. I know accounts are FDIC insured and that bank was immediately taken over by another but all she heard was the negative. I already have fire proof boxes buried on my property just to appease her. Her husband has had Alzheimers for the past 7-8 years so no he didn't manage the money situation. She's old school, parents lived through the depression etc. Since she's old school I may suggest the old savings bonds if that's an option. She's not looking at investing to increase it but not to lose any of it as well. There's 6 of us kids, most of my siblings wouldn't question me about her money but there's a couple that would and for that reason I won't do anything in my name and hers or mine alone, it's not worth that potential problem. I already have POA but that isn't required and I'm not opening that door.

Thanks for your thoughts and your time.
two25acres
Original Author
6 years ago
I get that morz8, I have 5 brothers and she breathes the air they walk on.
Elmer J Fudd
6 years ago
last modified: 6 years ago
You have money in boxes buried in the ground? That's not old school, that's ridiculous. Sorry.
PRO
Anglophilia
6 years ago
I agree - ridiculous - but not unheard of. A friend's mother always wants her SIL to do her income tax for her, but won't give him the documents he needs to do so - says it's "none of his business". I don't think she has dementia - just is old, quirky and apparently has always been impossible.

I hope you somehow have a map or markings for all these buried boxes. My father's sister was afraid of banks and also afraid that her husband might take back all the platinum and diamond jewelry he had bought her over the years of their marriage. He did this when he fell off the wagon or "strayed" and boy did she have a ton of very fabulous jewelry. She had it and cash hidden all over the house. After she died, they were never sure if they found all of it. New owners might still be finding it!
two25acres
Original Author
6 years ago
Yes, ridiculous and I agree. It was that our in my house and the only way I'd do it was to bury two boxes outside. Yes, map/markers are in place and instructions for all 5 of my brothers. My husband knows where they are, my mom knows as well. I have instructions in my personal files as well. We've got it covered.

Sometimes you have to appease people to avoid conflict. My mom won't live many more years and I don't want those years to be filled with conflict and unpleasantry's. I'm just trying to keep the peace. Unless you have walked in my shoes you can't truly understand it.
veggiegardnr
6 years ago
last modified: 6 years ago
I understand how you feel and I went through many years of watching my mother make some very unwise decisions. My best advice to you is to just accept that it's her money and what to do with it is her decision. If she wants to keep her money at home, that's really up to her. If that's what she wants, take her shopping for a fireproof safe and then bolt it very securely to the floor, in a location where it is as hidden as possible from thieves while still being readily accessible to her. It's her money and her decision. People do not lose their rights to make their own decisions simply because they are older and they are also allowed (by law), just like younger people, to make bad decisions or decisions that other people disagree with. People who say to have her sign a power of attorney...well, it's not that simple. You can only use a power of attorney to make decisions for someone if they are unable to make their own decisions. Getting someone declared not able to make their own decisions is not easy. You'd be surprised how physically or mentally ill someone can be and still have the legal right to make their own decisions. A power of attorney is not a guardianship. Taking the money from her and putting it in a bank account with your name, as some have suggested...that is not legal.
eld6161
6 years ago
Hidden money stories remind me of my husband;s aunt. When it was time to clean ou her home, there was a very, very old Tide detergent box under the sink. DH looked inside and it was packed with money! A solid square of paper bills.

Of course, they checked the rest of the house. They found two fifty's behind the toaster. That was all though.

Exactly, two acres. If it was hundreds of thousands of dollars, that would be quite a different story.
Elmer J Fudd
6 years ago
last modified: 6 years ago
Relationships need to be two-way and mutual, your relationship with your mother doesn't seem to be. Do your brothers accept her unreasonable demands?

Is it time for one of them to take a turn having her in his home?
veggiegardnr
6 years ago
last modified: 6 years ago
I don't think her wanting to keep her money at home is an unreasonable demand. It's her money, right? I wouldn't do it with my money, but, that would be my decision. It's really her decision to do whatever she wants with her money. I mean...she could decide to set it on fire and, while no one would agree with that decision, it would actually still be hers to make. There's no law against making bad decisions. Honestly, if she were my mom, I'd just take her to buy a safe and not worry about it. I learned the hard way, though. I could have saved myself years of frustrations and a lot of wasted breath with my own mom by just letting go and accepting what she wanted to do vs fretting, worrying and trying to talk her into better decisions. I only finally came to that place during the last couple of years of her life and, honestly, I wish I'd learned sooner to just let it all alone.
marcopolo5
6 years ago
Have a friend that had a family member in a cash business. Very successful for 20+ years. They had many coffee cans full of money buried, most of them for a long time. When they dug them up, the cans had leaked and the money was deteriorated so badly, the bank said it was not replaceable. I imagine rodents would destroy money when collecting nesting material.
Elmer J Fudd
6 years ago
"You can only use a power of attorney to make decisions for someone if they are unable to make their own decisions."

This is incorrect.

A capable person, not incapacitated in any way, can nonetheless grant a power of attorney to another person authorizing them to act in which ever ways desired, even without limitations. I have such powers of attorney for two normal and living people, unlimited as to scope (although there are long lists in the docs), that allow me to take any action I choose at my discretion, without consultation, for all of each person's assets and liabilities, income and expenses, existing or anything new I decide to act on. They're in place in case of a contingency or either person's unavailability. They're "durable" but fully in force now.
Elmer J Fudd
6 years ago
What in the heck is a cash business? You mean one for which the owners cheat on their income taxes, hiding their income by not putting it into a bank account?

People who do that cause those of us who file honestly to pay more, to make up for taxes not paid by cheaters. I have no toleration for people who do that.
veggiegardnr
6 years ago
last modified: 6 years ago
A competent person can revoke a power of attorney at any time, for any reason. A power of attorney does not give you control over a competent person. You may be able to manage their assets, etc...until they decide to not let you do that any longer. It's still their decision. Also, no, you cannot just do whatever you desire just because someone signs a power of attorney. You are legally required to act in that person's best interests.
Elmer J Fudd
6 years ago
last modified: 6 years ago
"A power of attorney does not give you control over a competent person."

Until a power of attorney is revoked, the person named can most certainly be granted the legal right to act at their own discretion for the good of the individual who granted the power. Acts are permitted even if contrary to the preferences of principal if the POA holder thinks a different approach is better. In fact, to the contrary, failure to apply reasonable judgement can cause the power holder to be liable for a breach of fiduciary duty.

It can be set up so that there is no obligation to tell the person what has been done. When power to act is given to another, the power can be revoked but to say that "It's still their decision" while in force isn't correct.

This is a simplistic situation. Are you suggesting that acting under a power of attorney to put money into a bank, instead of into a hole in the ground, isn't acting in the person's best interest?
Elizabeth
6 years ago
Burying money is a rather poor idea. However it you put her $25,000 into a bank account without her knowledge, it might give someone the false impression that you stole it from her. Should she pass away and ,if you have siblings, it could cause some confusion with her estate. Is her will in order?
veggiegardnr
6 years ago
last modified: 6 years ago
I'm suggesting that trying to force (or forcing) anyone to sign a power of attorney (when they don't want to) so that you can take their money and do what you want to do with it vs what they want to do with it is not okay and, in certain instances, could even be considered abusive (thus, not legal).
Elmer J Fudd
6 years ago
Is someone who tells a family member to bury money in the ground competent? There would unlikely be any problem at all with someone more level headed doing something more reasonable. As I said, following this person's directive could itself lead to some liability when the power holder had the ability to take a more sensible action.

Your understanding of this area is limited and incomplete, veggie gardner, sorry.
veggiegardnr
6 years ago
Elmer, deciding to bury your own money or even deciding to light it on fire or give it away to your favorite televangelist does not equal incompetence in the eyes of the law. It would be considered a bad decision, certainly, but making bad decisions does not make you legally incompetent. My understanding of this is extremely complete. I'm not sure what power you think anyone has over their elderly, yet legally competent, parents. No one is forcing anyone to bury any money here, anyway. But, if the mom in question here wanted to bury her own money, or set it on fire or give it away, that would be her legal right and, no, making a bad decision with it would not make her legally incompetent nor would anyone be able to get her to be declared legally incompetent because she did any of those things with her own money. If you don't believe me, go talk to some elder abuse experts, social workers, doctors, etc.
Olychick
6 years ago
If someone has a Durable Power of Attorney, it is usually stated that it only goes into effect once the principal is no longer competent. That would have to be determined by doctors, but usually, there is not a formal declaration of incompetence for a DPOA, the agent just begins using it when needed. But say the agent begins using their power as the agent and the principal objects. At that time the principal could revoke the POA and the agent would have to petition the court for guardianship, where there would have to be an actual finding of incompetence.

Laws in each state regarding this may be different.
Elmer J Fudd
6 years ago
last modified: 6 years ago
"If someone has a Durable Power of Attorney, it is usually stated that it only goes into effect once the principal is no longer competent. "

Sorry, this is wrong. You have it backwards.

A durable POA REMAINS VALID in the event the principal becomes incapacitated. Otherwise, a normal POA ends at that point.

Prior comment stands. You guys should be more familiar and better informed about a subject matter before commenting or offering advice. I am but I'm done.
Olychick
6 years ago
Well, Mr. Fudd, you're wrong. Things may be different in your state, but that's how it works in mine. People sign a DPOA when they are competent, but don't yet need an agent to do their business for them. Most forms state that when the principal is no longer competent, the agent may then use the DPOA. It is possible to make it effective immediately, but the vast majority do a DPOA as a part of their estate planning should they become incompetent or unable to take care of their own business. Usually there is a check box stating which option they choose, immediately or upon becoming incompetent. I've seen some requiring the signature of two doctors declaring the principal is incompetent, but that's not the norm here.

If a DPOA became effective immediately, no one would ever sign one when doing their Estate Planning, which they do when they are of sound mind and capable. They don't need it to be effective yet. If everyone waited to sign one when they needed an agent to take care of things, it would be too late - they'd be incompetent.

fyi, I worked in a law office specializing in Estate Planning for elders for 25 years.
Elmer J Fudd
6 years ago
last modified: 6 years ago
The "durable" modifier means it doesn't end if or when the principal becomes unable to act on their own, or incompetent. That's all. A POA is effective whenever it's made to be effective, and covers whatever is desired for it to cover. There are no rules or limitations.

Unless you worked in a law office as a lawyer, don't fool yourself into thinking you know enough to give legal advice. I'm a CPA and as I said, besides having two in force right now (drawn up by two good lawyers) I at times did estate planning (as a team member that always
included lawyers and sometimes financial advisers) along with many other
things during my career. Some admin staff and junior professional staff who worked for/with me at times over the years sometimes thought they developed expertise by doing what they were told. What they learned from that was how to do what they were told. Education, training, and experience practicing as a professional develops expertise, not doing tasks as instructed by someone else who decided what's needed and why.
Olychick
6 years ago
A Durable Power of Attorney is most often used as a tool for estate planning and are usually designated to be used when a person becomes incompetent. However, they can be made effective immediately, by failing to state that they are only to be used once one is incompetent.

Thanks for the mansplaining about how you think things worked in my law firm.
Elmer J Fudd
6 years ago
last modified: 6 years ago
No problem, happy to help clear up any misunderstandings.

Edit to add:

I missed part of your last comment. Powers of attorney and durable powers of attorney are prepared very very frequently for reasons having nothing at all to do with estate planning. One of the ones I hold is for someone in their early 30s, a person who has no estate planning documents and doesn't really need any at this time. The document was made durable because it was just as easy to add that in as leave it off. 99 chances in 100 that adding it in will never matter.
wildchild2x2
6 years ago
Have to agree with Elmer here. I had a Durable POA my father's lawyer drew up at my dad's request. It was explained to me exactly as Elmer said. At the time my father also requested his bank to add me to his accounts as an extra measure. He was concerned that the road ahead was made easy for me if necessary. My dad was competent at the time and I never really had to use my POA during his lifetime except for end of life health care decisions which was a separate document. I was also the executor of his his estate.
jemdandy
6 years ago
last modified: 6 years ago
About the Wisconsin Guaranty Bank. It did not fail. Federal Regulators walked in and closed the bank and handed its resources to another bank. Its weakness was not enough capital, but it was on the mend. The officers were working on a deal to gain more capital and needed about one more month for finish the deal. The Regulators decided not to wait. No one lost any money. The main inconvenience was a delay in being able to access their money. The depositors were frightened since that had been no warning. The bank officials had not issued one because they thought they could re-capitalize by the end of he month and no one would be the wiser.

This took the entire community by surprise including those who did not have an account with Guaranty Bank.

http://host.madison.com/wsj/business/guaranty-bank-is-closed-by-regulators/article_e6662be9-2286-53b2-8064-25d0e7996648.html
joyfulguy
6 years ago
I was wondering, the various states having a tendency to value their independence, i.e. rights to make various laws as they see fit, whether there might be substantial differences in which these things work, from state to state.

_______________________

Yeah ... but ...

... yeah ... but ...

... yeah ... but ...

... didn't you notice that the O P said that (either there were six siblings, or there are six, all told) ...

... and that what she might choose to do would be O.K. with most of them ...

... but there were two who might be unhappy, and might cause quite a lot of trouble, and that she had no intention of going anywhere near that waterhole filled with quicksand.

___________________________

Maybe buy shares in a large death-related organization (read "funeral home", though the large-scale ones might not seem too "home"y) ...

... then pre-arrange a funeral with it (which would shrink the size of the fund somewhat) ...

... which would mean that she might get a little bit of gain for her descendants from her own death.

(Can you imagine her Mom having anything to do with THAT one?)

ole joyful
nicole___
6 years ago
last modified: 6 years ago
I know a guy who purchased gold, buried it....in his backyard in Alaska! He had to hammer drill it out when he moved because the ground was frozen. lol This story makes me laugh..... but it does not involve a bank....
Elmer J Fudd
6 years ago
last modified: 6 years ago
"I was wondering, the various states having a tendency to value their independence, i.e. rights to make various laws as they see fit, whether there might be substantial differences in which these things work, from state to state.."

I think you have the wrong impression. Yes, there are some differences in certain limited underpinnings of law from state to state for historical reasons (some civil and community property law concepts from Spain in states near or bordering Mexico, plus from France in LA vs common law elsewhere).

For the variations from state to state, I see it differently and I don't think it has anything at all to do with guarding independence. There's a void in the overall legal structure if looking from the top down because there are limits to what federal law can cover. Each state needs to fill the void with its own laws and it's natural that each iteration can come to different approaches and conclusions on how to do essentially the same tasks. Multiple possible answers to the same questions. That plus whatever party happens to be in power, and what its agenda is, are what mostly accounts for differences between states.

In the case of powers of attorney, default rules may differ from place to place but a POA is a very basic, elementary type of agreement and its approach and possibilities are pretty standard from place to place, in my experience.
chisue
6 years ago
Maybe Mama would be happier giving this money away and seeing it used for a good purpose. Isn't there a parable in the New Testament about this? Burying money was not recommended.

How does Mama think the insurance company comes up with the money to pay benefits? (Clue: They do not have an underground vault full of old money.) They do make *conservative* investments so the incoming funds can grow to cover payments due beneficiaries.

I'm not understanding why Mama would trust an insurance company more than a bank.
Olychick
6 years ago
Durable POA form (partial screen shot) with link to instructions and origin. Notice the choice to be made whether it's to become effective immediately or ONLY when the principal is no longer competent (the choice made by most people when they are doing their estate planning for their future):

http://www.washingtonlawhelp.org DPOA forms
Elmer J Fudd
6 years ago
last modified: 6 years ago
So again, I say to you, you're presenting what you observe, not what you know.

This is a bare bones POA, given out for free, intended for low income persons and senior citizens. That's great and a valuable service for those intended groups they wish to help. Reading what a form says is not the same as understanding what the law requires or permits. In the case of a challenge or other questions being raised, this form is deficient in more ways than I want to spend the time to mention.

I pulled out one of the durable POAs that I have. It's 15 pages long, custom written, and there's no excess or fluff.

Is a cookie cutter form, intended to be used by low income persons and presumably less sophisticated senior citizens, better than nothing? Yes. Does it explain the law? No, you've demonstrated that. Is it suitable for most situations when other than minimal assets or minimal complexity needs to be dealt with? No.

Give it a rest.
anoriginal
6 years ago
No expert information to pass along but just a few comments. My Dad died of pancreatic cancer in 92. He lived much longer than original diagnosis and most of that time he was fairly active. During last 2-3 days of his life, he even had my sister rummaging thru OLD papers in his cedar chest to find the deed to a grave site with "room for one more". When it got toward the end he was surprisingly calm... maybe resigned, but sure didn't act scared of the unknown. One thing I would have suggested (a bit morose, but I'm sure he'd have gone for it) would have been to empty his safe deposit box. NO fortune, no cash but some stock certificates.

When my Uncle's Alzheimer's got to the point where my Aunt couldn't take care of him, my cousin had the unpleasant task of pretty much telling her mother she just could NOT stay in that house (the 2 of them) alone. I KNOW she couldn't have MADE her sell/move but she relented.
marylmi
6 years ago
I think if it was my mother I would try and talk her into putting at least half in a bank account and keeping the rest at the house . Maybe in time she would agree to putting more in the bank or towards funeral costs. My Durable POA was effective the day it was signed which was five years ago and I was fine with that. Have my younger brother, a retired CPA( sounds like his job description was about the same as Elmer's) and older brother for second name. I trust them both completely. I had the same with my name for my husband.
Elmer J Fudd
6 years ago
last modified: 6 years ago
The image and link are for a bare bones POA, given out for free by a non-profit org, intended for low income persons and senior citizens. That's great and a valuable service for those intended groups they wish to help. Reading what a form says is not the same as understanding what the law requires or permits. This form is deficient in more ways than I want to spend time to mention and is probably not suitable for use by anyone other than those with very limited income, assets and liabilities.

Edit to add -

The reason why some of the earlier posts shown above written by other people seem to be carrying on one-side conversations is that someone removed several of my posts.

That's fine, but the danger is that many of the posts that remain contain information and explanations about powers of attorney I believe are incorrect. The removed posts I had written included my views (I'm a CPA with experience with this actually simple and straight forward topic) and explanations why I believed several comments others had made were wrong. The comments I believe wrong remain, my corrections were removed.

Anyone for whom this subject may be relevant should be sure to get advice from individuals with the right qualifications to offer such advice.
PRO
MDLN
6 years ago
Would be an interesting resale feature for the house.
stolenidentity
6 years ago
I know where to get one of those doors! I'd get a safe for my mom if she wanted / needed to keep her cash at home.
kathleen44
6 years ago
Put in bank a certain amount per year that she needs every year in account.

Then find a really good financial advisor, one that is honest, trust worthy and let the rest grow every year and make even more money to live on.

I agree do not leave in house, not safe and even vaults have been broken into and carried off.
chisue
6 years ago
Love the bank vault door. If it's just a *door* it's about as safe as a gated community.

Senior savings - life insurance

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