Dear Quentin,
My father, who is in his mid-80s and recently widowed, now has a girlfriend who is pushing him to get married. We, his children, do not trust her. She has been married multiple times. She is isolating him to the point that we can’t even have a conversation without her butting in. We are so worried she will convince him to sneak off and marry at the courthouse.
He’s vulnerable and still grieving our mother. He has a substantial amount in savings and CDs, and his girlfriend knows this. No need to suggest a trust or will — he’s stubborn and dead set against those. He does not trust lawyers, wills or estate planners.
We are not after his money for ourselves. We’re all financially secure. However, we do want to make sure he keeps his money for any care he may need in the future.
The only idea I can think of is for him to give his money to one of my siblings and let her be his banker. What are the tax ramifications of him handing over his money to her, if we can even convince him to do that?
Suspicious Child
“The only idea I can think of is for him to give his money to one of my siblings and let her be his banker.”
MarketWatch illustration
Dear Suspicious,
There is an old saying: Be careful what you wish for.
But here’s a new saying for your consideration: Be careful what you hope doesn’t happen, because if you push too hard, it may come to pass. Your father’s girlfriend may be a fortune hunter, but may not see herself as one. You and your siblings may be looking out for your father’s interests, but you are also looking out for your own.
If your father is distrusting of lawyers, wills and trusts, he should certainly have reservations about a new woman in his life who is pressuring him to get married. Harness his skepticism and use it. Tell him straight: “You are a target.” If he wishes to hold tight to his home, savings accounts and other assets, this should be enough to put him on guard.
Elderly and vulnerable individuals — and their families — should be skeptical of new friends with an agenda, especially those who isolate the vulnerable person. Your father is grieving the loss of his wife, and jumping headfirst into another marriage at this point would be a big mistake. Ask him: “Do you want to tie yourself legally and financially to someone you hardly know?”
But he should be as resistant to your suggestion to transfer his assets to one of his children as he should be to this new person’s influence on his life. He may be in his 80s and an easy target for an opportunist, but giving away his agency to his kids is not the answer. Maybe he can trust his kids, but this is not an advisable course of action. Money does funny things to people.
Avoiding probate
A transfer-on-death deed would enable his property deed to be transferred to his family upon his death, thereby avoiding probate. But putting your heirs on the deed while you are still alive is a big no-no: Not only would he not benefit from a step-up in basis, but he would relinquish full ownership of his home during his lifetime.
A step-up in basis values a property at its current value, not its purchase price, after a person dies. That reduces heirs’ capital-gains taxes when they sell. If the house was purchased for $500,000 and sold for $1 million, and you were put on the deed while your father was still living, you would have to pay capital-gains taxes on that $500,000 appreciation if you decided to sell.
Undue influence and elder abuse are very difficult to prove, but isolation and control are major warning signs. “Isolation is a red flag and many studies of elder abuse say a lack of a good support system and physical and psychological isolation are hallmarks of the problem,” the National Adult Protective Services Association says.
As a last resort, you could talk to his girlfriend, politely and considerately. Tell her: “My father has recently suffered the loss of his wife, who was the love of his life and the mother of his children. He is in a vulnerable place right now. We, as a family, appreciate that you care about him, but pressuring him to marry you is not appropriate at this time.”
Tread carefully
Tread carefully. If she is a bad actor, she will be looking for an opportunity to isolate your father and create division, so anything you do could be misconstrued and repackaged as an “attack” on her character, your father’s independence and their relationship. The more conversations you have with her out in the open rather than in private, the better.
Gently explain to your father that probate essentially involves airing his dirty linen (financial details) in public, and the more time he puts into his estate planning, the easier things will be after he’s gone. Ultimately, if he decides to marry this woman and he is of sound mind and not under duress, that will be his decision and his alone.
There are approximately 1 million cases of elder abuse reported to the National Adult Protective Services Association per year, but the National Center on Elder Abuse, a government agency, notes that many cases go unreported. That said, it’s not a given that your father’s situation rises to the level of elder abuse.
If your father is as stubborn as you say, the more you push him, the more you will force him into the arms of this woman. It is a delicate balance. The subject of marriage arising so soon is definitely alarming. Keep the lines of communication with your father open. Stay connected and fully engaged.
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