An heir (sibling ), who is ill, but has a net worth of about $500k, is asking for "advance on his inheritance", whuch accountant informs me is not a normal or legal request. Dad, 93, feels sorry, sentimental and "wants to help". I have committed to taking care of Dad when the time cones, and don't know what those costs will be.
Sibling was asked to start monetizing their assests, but seems to be in denial and and he & spouse say they will do so over a 4 yr time horizon. The illness is a serious one. The couple have lived beyond their means for years, but still managed to acquire a decent amt of assets, but carry debt.
Dad agreed earlier that any transfers would be for medical only, if required. Now he wants to gift, not just to sib, but others.
I've told him keg a lly this puts me in a different position. My concern is his impulsive behavior the last few years in financial matters. He gave me POA 2 yrs ago as he wanted help w/ biz matters, but he us still very cognizant of issues, but has some short terms memory issues.
Complicating factor, we both agree this sib is acting to satisfy his spouse but both seem to feel entitled to an inheritance, on assets that belong to Dad.
If he could manage some asset distribution, then I'd make it only for medical necessity and you pay the medical bills directly and not give them to sibling (and spouse) to pay for non-necessities, if you can legally do that. That's what I'd do if it was me.
Dad might not realize how expensive it can be to have caregivers in his home, that he needs to hang onto his money for such cost. My Dad had 24-hour caregivers which cost him $20k per month, yes per month. Therefore, if one had such caregivers over a 3 year time, that would be $720,000 not counting for misc items that would be needed. I had no idea of the cost, neither did my Dad. Time to chat with Dad about that while he is still of clear thinking. Like I said, Dad might not know that.
If Dad is not super wealthy but finds himself without the required funds, then he would need to apply for Medicaid which would help him pay for continuing care facility. But, Medicaid will look back 5 years to see if your Dad had "gifted" any money. Oops, those money gifts that Dad wants to hand out might come back to bite him. Better for him to leave such "gifts" in his Will as a percentage.
This is just my opinion, based on anecdotal evidence, but I believe that people who were helpers in earlier years are the ones who are most receptive not only to family pressure for funds but to the ploys and cons of so-called charities, of HSN and of others with long arms and big hands searching for elder funds.
2. When aging limits or takes away the ability to help physically, there may still remain the ability to help financially. So think of ways that your father can help, but not financially. And make these ways that will force your brother to reveal what assets he has, now, not in 4 years, so that it becomes apparent he really doesn’t need the money, perhaps b/c he wants to hold onto his own assets.
3. One way to help is to suggest a review of your brother's financial situation by you and your father (your brother will probably react strongly and negatively to this.)
As you already have, be firm on the issue of providing you with a breakdown of brother's assets, income and expenditures, and if you want to be really firm, advise that you and your father will review it to see where they can fit into the very large $500K assets the cost of brother’s medical expenditures so that he can manage his own portfolio and his own medical expenses.
4. Ask brother to provide you with information on what insurance coverage he has and suggest that you and your father can review it to determine what else he needs to be covered.
My guess is the requests, firmly and repeatedly stated if necessary, will cause brother to be less aggressive in asking for funds, as he probably doesn't want to reveal that much personal financial information.
5. I wouldn’t even raise with your father the issue that brother’s requests and gifts to others might affect your decision to care for your father later in life. If he’s forced to consider that you won’t be around, he’ll gravitate more toward your brother and be more receptive to your brother’s conniving.
But do emphasize that in order to care for your father, you need to know that HIS assets will be available for HIM. No questions here; that’s the way it has to be.
And give careful consideration to what steps you would be willing to take if he defaults. You could and have the right to ask for collateral such as financial instruments pledged as security, which you could hold on behalf of your father until the loan is repaid.
Good suggestion, Willie.
Note that even if your Dad places a lien on one of the properties, the mortgage company is standing in front of the line to get what is owed to them, with Dad standing in second. If the houses are mortgaged to the hilt, then there won't be any money to pay off Dad's loan.
Then, Dad is divested of all monies to give away or loan out-there's no more money to borrow! Except, no one knows you didn't spend your portion and have saved it for Dad's care?
That said, can you tell Dad a white lie that you did as he suggested with the money-that you took care of it-he will feel comforted-forget-then when Dad talks to you again-ask him, 'what, are they asking for even more money?'
Sorry to even suggest this, but it may work for some people. I could not maintain the lie, so it wouldn't work for me. If dementia or alzheimers is the problem, then this might help your Dad feel more comfortable.
However, what you have described sounds more like a sibling problem coming from brother. If you cannot say NO, teach Dad to explain that all the money is in the accountant's control, you say the same to brother-add that he should stop asking and upsetting Dad. Try sounding offended that they should have even asked, and while you are sympathetic to their needs, this is just not possible.
Guessing that to protect Dad's assets, (you are in a tough position) you may have to act tough, and push back a little-willing to risk distancing the relationship from those asking for money.
When wolves are trying to knock the house down, are you going to open the door?