I recently met with a mother (“Mary”) and adult daughter (“Susan”), who came in to discuss the
situation with Dad (“Bill”). Bill and Mary have been divorced since 2002. Bill was an alcoholic.
He was 71. He now has alcohol induced dementia. Bill does not remember much. If you ask him
where he lives, he mentions the address of his childhood home. He cannot identify his children
when he sees them. He lives in a nursing home right now after a recent stint at the hospital. He
has been there for a couple of months. The cost to live in the nursing home is approximately
$8,000 per month. Neither Susan or Mary have the funds, nor the inclination, to pay for Bill’s
care. But they came to see me because they received a letter from the institution that held Bill’s
Thrift Savings Account or TSP, which was about $65, 000.
Bill did sign a Power of Attorney which named Susan and his other daughter as agents. The
daughters presented such POA to the TSP company but they would not accept it. They stated
that they only accepted the Power of Attorney form that is in their company form files.
Obviously Bill is unable to sign a new Power of Attorney due to his incapacity. The company
stated that they would need to get guardianship over Bill.
Guardianship is a court process designed to protect the mentally disabled. It requires a
significant amount of time, and money. When someone says to you, go get a “guardianship”, it
is not just applying for it, or just filling out a form, and all of a sudden you are the guardian. It’s
a formal process where the court, rather the Judge, is in charge. He/she tells you who is the
right person to be the guardian, and he/she will require you to tell the court what you spent of
the disabled person’s funds on an annual basis, down to the last penny.
Unfortunately, Susan and Mary are between a rock and hard place. They need to access the
funds to pay for Bill’s care, but they do not have the financial ability to open a guardianship
case. I unfortunately encounter this situation fairly often. The financial institutions are so full of
regulation that they make it harder and harder to access your funds. Although Bill did the right
thing by having a Power of Attorney, it still did not allow his daughters to access his account.
It is important to do some estate planning, while you have the capacity to do so. I recommend
going to each of the financial institutions where you currently have your investments at, and see what the requirements are upon a disability. If they have their own Power of Attorney form, then perhaps we review it, and you can sign it just for that specific account. Although it may seem like a tedious task today, it may be the most significant task you do, to help your family out in the future.
About our firm
Maritess T. Bott, of Bott & Associates, Ltd. is an estate planning attorney in Rolling Meadows,
Illinois, a Northwest suburb of Chicago. She has been an attorney since 1997, and has helped
hundreds of families have peace of mind by protecting their wealth, and preserving their
relationships. She has been a member of the American Academy of Estate Planning Attorneys
since 2003, a nationally recognized organization of attorneys who specialize in estate planning
and probate. If you are interested in more information, you may check out