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Disabled Adult Child - estate planning

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CarlaJ

Junior Member
What is the name of your state? Illinois

My friend's mother is elderly, but still lives on her own. My friend is an only child, no children, father deceased. The friend is fully disabled and receives Social Security Disability plus Medicare. (She is mentally ill, but very bright. Her mental illness is severe, but comes and goes. She lives on her own, and receives financial help from her mother.)

The mother has said a power of attorney would be welcome (there was an issue where the mother was very ill, but she's recovered...however, they want to get affairs in order for the future), and would be fine to put the disabled daughter onto her bank accounts to have control if needed at some point.

They do plan on hiring an elder attorney to advise, but were considering going ahead and adding the adult disabled child to the bank accounts just in case. (The daughter is mentally ill, but responsible and would never steal or abuse...she adores her mother)

Would adding the disabled child to her mother's bank account, such as a joint account, cause problems with her social security? It could look to social security like she had more money than she actually did, if they took a joint account ownership to mean the money might be hers.

There are other relatives who could and would be trustworthy persons to be on the account, but the mother really only trusts her child 100 percent. She is hesitant to allow one of her own siblings to be in charge. She wants her daughter. The daughter is fine with allowing one of her aunts or uncles to have control, whatever is best for the situation. (Aunts and uncles are trustworthy, but the mother just really wants the daughter in charge of her affairs.)

Also, how would you set up the estate so it could pass to the disabled daughter without her losing her disability? The estate isn't huge, but would well be enough to cause her to be ineligible. (A house, some investments, etc., probably 100k or so)

One more question (thank you!): worst case scenario, if both mother and adult child were killed together, mother dies first, child inherits, legally, who would be the next of kin and inherit from the child? (No wills, which is another thing needed ASAP) She has family she's close to: many aunts and uncles, cousins, but no children of her own, no full siblings. Father is deceased. She also has step siblings (same father) that she has no contact with. Would the step siblings be the next of kin or the aunts and uncles? She would not want the estate to pass to the half siblings or anyone on her paternal side.

Thank you so much.What is the name of your state? Illinois.
 


BlondiePB

Senior Member
My friend's mother is elderly, but still lives on her own. My friend is an only child, no children, father deceased. The friend is fully disabled and receives Social Security Disability plus Medicare. (She is mentally ill, but very bright. Her mental illness is severe, but comes and goes. She lives on her own, and receives financial help from her mother.)

The mother has said a power of attorney would be welcome (there was an issue where the mother was very ill, but she's recovered...however, they want to get affairs in order for the future), and would be fine to put the disabled daughter onto her bank accounts to have control if needed at some point.
POA for whom, the mother or the daughter?
They do plan on hiring an elder attorney to advise, but were considering going ahead and adding the adult disabled child to the bank accounts just in case. (The daughter is mentally ill, but responsible and would never steal or abuse...she adores her mother)
In case of what?
Would adding the disabled child to her mother's bank account, such as a joint account, cause problems with her social security? It could look to social security like she had more money than she actually did, if they took a joint account ownership to mean the money might be hers.
That depends on whether the daughter receives SSDI or SSD.
There are other relatives who could and would be trustworthy persons to be on the account, but the mother really only trusts her child 100 percent. She is hesitant to allow one of her own siblings to be in charge. She wants her daughter. The daughter is fine with allowing one of her aunts or uncles to have control, whatever is best for the situation. (Aunts and uncles are trustworthy, but the mother just really wants the daughter in charge of her affairs.)
The daughter is mentally disabled/incompetent and not the one to be handling anyone's affairs.

Also, how would you set up the estate so it could pass to the disabled daughter without her losing her disability? The estate isn't huge, but would well be enough to cause her to be ineligible. (A house, some investments, etc., probably 100k or so)
A special needs trust.
One more question (thank you!): worst case scenario, if both mother and adult child were killed together, mother dies first, child inherits, legally, who would be the next of kin and inherit from the child? (No wills, which is another thing needed ASAP) She has family she's close to: many aunts and uncles, cousins, but no children of her own, no full siblings. Father is deceased. She also has step siblings (same father) that she has no contact with. Would the step siblings be the next of kin or the aunts and uncles? She would not want the estate to pass to the half siblings or anyone on her paternal side.
When one does not have a will, one's state of residency provides a will for the deceased. It's called intestate and available on-line for each state.
Thank you so much.
You're welcome.
 

CarlaJ

Junior Member
Blondie, thanks for such a quick response!

The daughter receives SSD. She worked before becoming disabled.

The POA would be a durable power of attorney over the mother, for health and/or financial decisions. The mother isn't incompetent, but has had some issues. She has had some periods of "confusion" due to an accidental poisoning.

Recently the mother was taken in by some con men. The daughter figured out what was going on, stepped in (she's in a good period, but like I said this mental illness comes and goes, and when she's good, she's brilliant, in fact she's kind of like the Russell Crowe character, really brilliant and sometimes really insane) and resolved the situation. However, she had to endure some red tape because she wasn't on her mother's accounts at the bank. The bank suggested she be added as a joint account holder to prevent the extra work should something like that happen in the future.

Since the confusion issues due to the poisoning come and go, someone needs to have some power in the event she has a backslide and needs some assistance. The con game illustrated this need, though the issue had been discussed in the past (and people then put their heads back in the sand because it was so complex).

The easiest route would be to put the mother's sister in charge, but like I said the mother only trusts her daughter. This isn't due to any bad behavior - the sister would only do what was in the best interest - but the resulting issues from the poisoning have left the mother with a few trust issues. (The poison caused some paranoia)

It should be noted that the sister (the adult disabled child's aunt) actually controls her SSD. The aunt is the payee and that works out just fine. There's never been a problem with it.

However, it should be mentioned that the aunt is also 70something and dementia runs in the family.

They (aunt and daughter) plan to approach the subject this weekend with the mother because of this recent con man issue. And they are looking for an attorney who specializes in elder law, with an emphasis on estate planning for disabled child.

I just was trying to gather a little info for my friend in advance of her bringing up the subject with her mother.

There are several issues here and it's all kind of complex due to the close nature of the mother/daughter relationship. They have always relied on one another and neither one of them really wants to face that it can't go on forever.

Thanks again!

Carla
 

CarlaJ

Junior Member
Oh my, this from her state's intestate info:

Relatives of the half blood inherit the same share they would inherit if they were of the whole blood.

She needs a will ASAP. (She being the adult disabled daughter) Worst case scenario, if her mother died, then she died without a will since she has no children or siblings, next in line would be these half siblings that she never even knew.

THANK YOU, because I was easily able to look this up online with the word intestate.

She's always had that worry in the back of her mind, but really kind of assumed that full blood trumped half blood. Except that what's in her mind isn't what's in the law. In her mind only her maternal family exists because the father split when she was an infant and she never knew him or his family. But legally, those half siblings would have more of a right than her maternal aunts and uncles. (No bad blood against the half siblings, they just don't know one another, so it would be like giving your estate to some stranger.)

This fact alone should get them on the ball. The mother would also be horrified at the thought her estate could accidentally get passed to her ex husband's children.
 

BlondiePB

Senior Member
Blondie, thanks for such a quick response!

The daughter receives SSD. She worked before becoming disabled.

The POA would be a durable power of attorney over the mother, for health and/or financial decisions. The mother isn't incompetent, but has had some issues. She has had some periods of "confusion" due to an accidental poisoning.

Recently the mother was taken in by some con men. The daughter figured out what was going on, stepped in (she's in a good period, but like I said this mental illness comes and goes, and when she's good, she's brilliant, in fact she's kind of like the Russell Crowe character, really brilliant and sometimes really insane) and resolved the situation. However, she had to endure some red tape because she wasn't on her mother's accounts at the bank. The bank suggested she be added as a joint account holder to prevent the extra work should something like that happen in the future.

Since the confusion issues due to the poisoning come and go, someone needs to have some power in the event she has a backslide and needs some assistance. The con game illustrated this need, though the issue had been discussed in the past (and people then put their heads back in the sand because it was so complex).

The easiest route would be to put the mother's sister in charge, but like I said the mother only trusts her daughter. This isn't due to any bad behavior - the sister would only do what was in the best interest - but the resulting issues from the poisoning have left the mother with a few trust issues. (The poison caused some paranoia)

It should be noted that the sister (the adult disabled child's aunt) actually controls her SSD. The aunt is the payee and that works out just fine. There's never been a problem with it.

However, it should be mentioned that the aunt is also 70something and dementia runs in the family.

They (aunt and daughter) plan to approach the subject this weekend with the mother because of this recent con man issue. And they are looking for an attorney who specializes in elder law, with an emphasis on estate planning for disabled child.

I just was trying to gather a little info for my friend in advance of her bringing up the subject with her mother.

There are several issues here and it's all kind of complex due to the close nature of the mother/daughter relationship. They have always relied on one another and neither one of them really wants to face that it can't go on forever.

Thanks again!

Carla
Due to the fact that the daughter has a Rep Payee and is not competent to handle her own money, the daughter cannot be in ANY fiduciary position. With one quick stroke of a pen, a judge will unravel everything. The daughter isn't even competent to make any of her own estate papers.

SSD is not affected by how much one has in his/her bank account (SSDI is affected). The mother needs to have her estate "in order". Prior to the mother making any estate papers, she needs to be seen by a physician to have her documented that she is competent to make estate papers. After the mother makes estate papers, the mother needs to be evaluated by her physician again for her competency.

The mother needs to make a living revocable trust with herself as trustee and then have successor trustee (like the responsible aunt of the daughter), and then another responsible person as next in succession for trustee. When mother passes, the trust needs to have daughter as the beneficiary. Mother can put in the trust upon her daughter's passing all assests can go to whomever, like daughter's favorite charity, etc. Also important is putting a limit of the amount the successor trustee can pay him/herself. A low percentage of the total assests is perfectly acceptable and needs to be put in writing in the document.

Make sure that the successor trustees report annually to the court for every penny of money in trust and all assests (put that in writing too & have mother file the trust in the courthouse along with all the other documents so nothing will happen to them). Mother can have her bank accounts name her daughter as beneficiary (either a POD or ITF account). Mother also needs a will and a pour-over-will. The court house can make certified copies of these documents or the attorney can.
 

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