Why Naming the Caregiver Adult Child (instead of your Spouse with Dementia) as Beneficiary of your IRA Can Backfire

In this Tuesday Triage episode, Jill answers a listener question from Molly in Washington, whose father is considering naming her as the beneficiary of his IRA to help care for her mother, who has dementia. Jill explains the potential pitfalls of naming the “helpful child” as a beneficiary, shares a real-life cautionary case from the Michigan Court of Appeals about mishandling a power of attorney, and offers guidance on safer ways to ensure assets are available for care when they are needed most.

What Jill discussed:

• The central question: Should Molly’s father name her as IRA beneficiary to help care for her mother?
• Three major problems with naming a child as beneficiary in this context:
• A Michigan Court of Appeals case illustrating breach of fiduciary duty by an agent under a power of attorney
• The fiduciary duties of an agent: good faith, loyalty, prohibition against self-dealing, and meticulous record-keeping
• Practical advice: If you’re managing someone’s finances, keep accurate records from the start and get help if needed.

Link

• Tuesday Triage episode on powers of attorney: How Powers of Attorney Work, When to Use Them, and When It’s Too Late to Get One

Connect with Jill:

• Website: DeathReadiness.com
• Email: [email protected]
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This podcast provides estate planning guidance for women and discusses real, practical issues, from caregiving, pre-planning a funeral, how to avoid probate using beneficiary designations, planning for individuals with special needs (and special needs trusts), whether you need a professional fiduciary (trustee or executor), how the estate tax works and how to preserve your legacy.

Tuesday Triage episodes answer questions from listeners like you, from powers of attorney, healthcare advance directives (and whether they work when you’re pregnant), what a Last Will and Testament really is, whether you need a trust, how Medicaid works and how to have senior and elder care conversations and how to care for aging parents.

Disclaimer: This podcast and all related content are for educational purposes only and do not constitute legal advice. No attorney-client relationship is established here. Use of this information without careful analysis and review by your attorney, CPA, and/or financial advisor may cause serious adverse consequences. For legal guidance tailored to your unique situation, consult with a licensed attorney in your state.