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If you immigrated to America and have aging parents in India, you are facing a common dilemma – how to help parents who are increasingly unable to manage their own affairs. These complicated situations could happen unexpectedly, so be prepared in advance to face questions like these:
How do I manage the property or assets of an elderly parent impaired by illness, typically, stroke or dementia?
How do I arrange funds for healthcare? I find it difficult to transfer money between India and the U.S.
What do I do about making critical healthcare decisions like putting my parents on a ventilator or proceeding with surgery ?
What You Need to Do in India
Create a Joint Account
- Ensure that all bank accounts and other property holdings of your parents are joint, with the ability to sign in a “either or survivor” capacity. This also applies to safety deposit boxes.
- Frequently, these are held jointly by two parents to begin with, and then become singly-held upon one of them passing. It is helpful to have an additional holder who is fully functional at all times.
Establish Nominees and Power of Attorney
- Appoint a nominee for each account, so that someone can access the accounts if the main account holder passes away.
- Prepare a power of attorney and if possible submit it with the bank. This will allow the person with the power of attorney to operate the accounts, investments or safety deposit boxes.
- Check with the bank to find out if they accept a power of attorney for the account in question what language needs to be used.
- Ensure that there is a general power of attorney allowing someone to handle the parent’s affairs, including matters relating to real estate (which may require specific power of attorney – please check with a lawyer). This way, sales of houses and other property are easier to manage.
- Banks in India have their own rules and restrictions about who can be a signatory, or nominee or a power of attorney holder on an account, so consult with senior bankers or finance planners.
Prepare a ‘Valid’ Will and a Living Will
- Make sure that there is a valid will which clarifies the property division. Also, investigate the possibility of having a “living will” which specifies the person’s wishes in terms of their health care.
Keep Visas Current
- Ensure that the parent living in India has a valid visa to travel to the United States should the need arise.
- More importantly, make sure that you, a US resident, who might have to travel to India suddenly, have a valid visa at all times.
- If you have recently obtained US citizenship, please apply for an Indian visa on an expedited basis.
Access to Cash Flow
- Ensure that there is access to cash flow, since Indian hospitals often need significant advance payments.
- Check with your banks here in the US and in India about money transfers and ensure you have processes in place should the need arise.
- There may be tax implications in the US with having your name on bank accounts or other investments in India. You may be required to file tax returns in India. Please talk to a tax advisor or accountant in both places.
- It’s good practice to consult with a lawyer, especially with respect to estate planning and wills.
- In certain circumstances, it may make sense to get advice from estate planning experts, both in India and in the US. Tax considerations and implications on cross border assets can be complex and extensive.
What You Need to Do in the U.S.
- Ensure that there are multiple signatories on bank accounts, investments accounts, safety deposit boxes etc. who can sign individually (not jointly).
- If, for any reason, this is not possible, provide a power of attorney to a trustworthy person, who can operate accounts and manage assets should the person become incapacitated.
Prepare the following Wills and Establish Power of Attorney
- A will (which provides for a division of assets upon passing)
- A living will, which specifies who is in charge of medical care and decision making should the patient be incapable of making decisions and also provides guidance on the patient’s care preferences, such as the extent to which life support can be used
- Seek advice from asset planning professionals, accountants and attorneys, both, for the parent as well as the child/caregiver. The will and other documents may need to be structured in very specific ways.
- Power of attorney, which provides power to another person to manage the affairs even within their lifetime, should they become incapacitated).
- File the power of attorney with a bank so that there are no complications at the time of usage.
- There are several tax disclosure and payment requirements in the US. The US taxes its residents on their worldwide income and needs declarations of their assets worldwide. Please take this into consideration and consult a tax professional for advice.
This article is intended for informational purposes only. Individual circumstances differ for everyone. It is always advisable to get professional advice specifically suited to your circumstances.
Svati Kania Shashank is a lawyer practicing in New York for over 20 years.
Edited by India Currents Contributing Editor, Meera Kymal