HIGHLY INTELLIGENT people sometimes don’t know much about investing. Still, they can have a misplaced confidence in their own abilities and feel certain they require no help. In the end, it’s often their adult children who sort things out—which, in this particular case, meant me.
Five years ago, my 84-year-old mother and 85-year-old stepfather moved from the mountains of Colorado to Georgia to live closer to my wife and me. For more than 20 years, they’d loved the Colorado mountains and skiing high-country powder, but it was time for them to move on.
Like many in their generation, they were stubborn and independent. They declined all my offers to help them sell their house, work with the moving company and drive across the country. Needless to say, there were a few hiccups with the move.
Fortunately, they made it to Georgia safely. They opted to live in a 55-plus community about 50 miles from our home. My mother said she didn’t want to live too close to us.
About a year in, it became apparent that both their physical and mental health were declining. When I asked if they had current wills, I was told they were located somewhere in the house. When I suggested to my stepfather that it might be time to appoint a power of attorney, he replied, “What for?”
Since my wife and I both work in health care, and so were especially at risk of infection during the early months of the pandemic, we didn’t visit my mother and stepfather between February and May 2020. But each week when we talked on the phone, they said everything was fine.
When we next visited them in person, however, I learned that several bills hadn’t been paid—including their auto and homeowner’s insurance policies. Later, I found out that their utilities had been turned off at different times for lack of payment. I was able to get their bills paid, but they still insisted that there was no need to give me power of attorney.
In summer 2020, my stepfather fell and fractured his left femur. While lying in a hospital bed, awaiting surgery on a floor filled with COVID patients, he decided that he did want me to be his power of attorney. It also became clear that my mother’s dementia was worse than we’d been led to believe. Over the next few days, we hustled to get powers of attorney and advance directives signed and notarized for both of them.
After successful surgery and eight weeks of rehab, my stepfather joined my mother in an assisted living facility near us in September 2020. Unfortunately, he passed away from old age at age 89 in 2021.
My stepfather was a retired physician who enjoyed tracking his investments and the value of his extensive wine collection. But there was also an unknown in his portfolio. In 1999, my parents created an irrevocable trust through an insurance company on the advice of a financial advisor who was also an attorney.
For almost 20 years, my stepfather paid between $16,000 and $19,000 a year to the insurance company through his financial advisor. The beneficiaries of the trust included my stepbrother, brother and me. I tried to learn what the trust was for on several occasions, but my stepfather always told me that it was “for taxes” and didn’t elaborate.
Despite my appointment as his power of attorney, the insurance company wouldn’t give me any information regarding the trust’s holdings—because I wasn’t a trustee. Complicating matters further, his old financial advisor had been disbarred and sentenced to 32 years in prison in 2005 for stealing millions from the trusts and estates of his elderly clients.
My stepfather’s subsequent financial advisor, who was also the next trustee on record, had passed away—without naming another trustee before his death. It took me 18 months of working with my attorney and going through the necessary legal steps to finally have myself named as trustee.
After all that time and significant legal fees, I was able to determine that the trust was indeed legally valid. Unfortunately, it held a universal life insurance policy then worth $700,000. If those premiums had been invested instead in a low-cost index fund earning a 10% average annual return for 20 years, the amount of the trust would have been significantly greater—perhaps $1 million or more. My stepfather was a brilliant physician. Sadly, he relied on the poor advice of a shady financial advisor.
Scott Martin is a semi-retired family medicine physician associate (previously known as a physician assistant) and has been practicing medicine for the past 18 years. His previous career was in academia doing research and teaching at the University of Georgia. He and his wife enjoy traveling and spending time with family.