Protecting Your Aging Parents’ Assets

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On the magazine cover, the cute but worried dog was staring at a man’s hand.  The hand was holding a gun to the dog’s head. The cover caption: “If You Don’t Buy This Magazine, We’ll Kill This Dog.”

This is not exactly a case of undue influence. Nobody has you in a chokehold, nobody is threatening to lop off your fingers one at a time, saying “Sign this or else!”  That’s what undue influence is usually about.

Aging adults, however, sometimes face the pressures of a different undue influence: being manipulated when they have diminished mental capacity. Who’s doing it? People – often relatives — who seek influence and financial control over the aged adult as well as financial benefit for themselves.  

The typical strategy plays on the fear of isolation, the aura that others cannot be trusted, and the threat that “If I don’t act to protect you, you’ll be penniless, uncared for, and out in the cold.”

Because of the pressure, the aging adult signs documents at the behest of the person being put in charge – documents which never should have been signed in the first place, and which need to be undone.

Consider this recent case about Mrs. Fox (no relation), a widow.  She had six children, five sons and a daughter.

One of the sons, William, had developmental disability issues, and always lived with his parents in their house. Mrs. Fox repeatedly said that when she died, she wanted William to continue to live in the house for as long as he lived.  She also wanted all her other assets to go into a trust for William.

But Mrs. Fox’s daughter Elaine, and Elaine’s son Harry, had other ideas.

As Mrs. Fox’s health declined, Elaine gave her mother a very hard time. According to the Court of Appeals, Elaine dominated and belittled her mother. Elaine told her mother that she was the only child who could be trusted to take care of William after Mrs. Fox died.

And Elaine’s coup de gras: she told her mother that if she put all her assets in Elaine’s name, then Elaine could prevent her brothers from putting Mrs. Fox in a nursing home, selling everything, and putting William out on the street.

So Mrs. Fox signed a Will prepared by grandson (and Elaine’s son) Harry. On the surface, it did provide for a trust for William.

But then Elaine and Harry gutted it.

How? Nine days later, Harry showed up with a Quitclaim Deed, which he had his grandmother sign. It conveyed her rental house to – guess who? – Elaine and Harry. As a result, the rental house wasn’t going to pass under Mrs. Fox’s Will. It was gone from her assets and would never, ever be in her estate.

Then Mrs. Fox had surgery. She had terminal lung cancer. She went on strong pain medicine.  She wasn’t in good physical or mental shape.

But two days before she was to start chemotherapy, Harry showed up with another deed for his grandmother to sign.

This deed moved the house where she and her late husband and son William had always lived, plus the surrounding 14 acres, to — surprise! — Elaine and Harry.

Then to get the rest, Elaine thoughtfully changed her mother’s savings accounts to joint name. So when Mrs. Fox died, her daughter got all of them.

Even after her mother’s death, Elaine couldn’t leave well enough alone. She found a $27,000 money market account in the name of Mrs. Fox, son William, and Elaine.   Elaine changed the name on the account to just herself and her son Harry.

Nice, huh?

The five Fox brothers filed suit. They wanted to set aside the two deeds, claiming that Elaine and her son had used undue influence to have Mrs. Fox sign them. It was a nasty interfamily fight.

A jury decided that the brothers were right: Elaine and Harry had used undue influence over Mrs. Fox. So the deeds were put aside. And the Court of Appeals affirmed the jury’s decision.

I wish I could tell you this is an isolated incident. It’s not. It happens all the time in families.

So how do you prevent it?

If you have aging parents: meet with them and all the sibs and step-sibs. If somebody balks, let everyone else meet to find out your parents’ wishes. Everyone hearing the same thing, everyone hearing the answers to questions, works wonders.

If you are an aging parent (aren’t we all?), take your children through your documents. This way, there will be no surprises afterward. It’s why we encourage our clients, after their documents are signed, to bring in all their children for a free meeting to do this.

You knew that already, right? It’s time to act on it.