SOLICITATONS
Two years after the process starts, the child discovers that mom or dad answers all of the pleas for help from every charity legitimate or not so legitimate. These “nonprofits” know exactly how to place the guilt trip on the parent and receive ten or twenty dollars. Magazines and free gifts are not far behind in getting the parent’s attention. Psychology is needed here. You cannot just stop the process but need to find a way to intercept. Eventually, contact all of the charities as they come in and ask to be permanently removed from the list. The best answer is to have all of the mail go to your address. If this is unacceptable then ask mom or dad to put all of the mail in a box for a weekly joint review. If you are able to stop the process, normally the parent soon forgets this type of mail and the problem will temporarily go away. You can expect that the requests will resurface every year.
FINANCIAL ACCOUNTS
Government backed insurance is normally the answer as to why mom and dad have funds in seven banks. It is your job to be a financial detective and determine where all of the accounts are located and how they are titled. Now that your parents are retired and staying at home more, it is not necessary to have so many accounts. The key is one maybe two banks that acknowledge your presence and will work closely with you to oversee and protect your parent’s funds. You need to have your name placed on the account along with a power of attorney to have the ability to sign and make any decisions necessary. Look at their prior income tax returns to determine that you have located every account.
INVESTMENTS
There are better ways to invest than savings accounts. You need to have a good working relationship with the financial advisor and have the power to make decisions. It can be difficult to get involved with investment decisions without threatening your parent’s control. If they give you that power, keep your parents updated as to the earnings of the accounts. You do not need to explain every decision, but be sure that they are copied with statements and that they feel involved in the process. Eventually, they will not need to know and will fully trust your judgment. If you have brothers and sisters, it is recommended that you seek the opinion of a financial advisor. Have a team of third parties in the financial, legal and insurance professions to verify and offer a neutral opinion.
LOCATING DOCUMENTS
Locate your parents’ wills, power of attorneys, life insurance policies, trust documents, pension papers, funeral plan and any other documents that apply to them in the near or distant future. If there is a lock box, you need to take an inventory. Personally, I do not feel that they are necessary. Most documents can be duplicated. If you go to the box have a third party to witness the process and eliminate any questions as to your action. If you elect to keep the box, be sure to have your name added as a signatory if you need to reenter the box at a later date.
BILLS
Get an accurate list of all monthly bills. This will be very foreign to your parents, but arrange to have the majority of the bills automatically deducted from their checking account. This offers the assurance that everything will be paid in a timely manner. They can still receive a paper receipt showing payment. This will allow your parents to be current without you sitting at their kitchen table each week paying a new set of invoices. It may sound strange, but a few older individuals maintain and use a credit card to excess. They never study the statement for discrepancies. You will have to place parameters on the use of this card. Some companies will find a way to place automatic charges on the account that you will need to police the account. A credit card is a great way to keep track of expenses but can be abused by third parties.
NO GOOD DEED GOES UNPUNISHED
You have been selected to assist your parents with their financial affairs. All is well until they pass away. Then the second guessing starts by the brothers and sisters or more often their spouses. Keep a journal of everything you do. Have a receipt or paper trail of every transaction. If it is an unusual transaction, have mom or dad initial. This may seem unnecessary but a majority of times there is one person who will be suspicious. They have no concept of the time you have spent. All of that is forgotten shortly after the funeral. It is actually best for you to be paid on a monthly basis but very few do. Keep everyone in the loop. With email, a monthly overview may be the best policy.
This all may seem elementary, but families have been split by lack of communication and information. Helping your parents with their finances is not an honor but a tedious job. Good Luck.
Jeff Roth is a partner with Forrest Bacon, David Bacon and associate Jessica Moon of the firm ROTH and BACON with offices in Port Clinton, Upper Sandusky, Marion, Ohio and Fort Myers, Florida. All members of the firm are licensed in the State of Florida. Mr. Roth’s practice is limited to wealth strategy planning and elder law in both states. Nothing in this article is intended for, nor should be relied upon as individual legal advice. The purpose of this article is to help educate the public on concepts of law as they pertain to estate and business planning. If you have any questions you would like to have answered in this area of law, please direct your question to this journal and your question will be considered for use as the topic of subsequent articles. Jeff Roth can be reached at [email protected] (telephone: 419-732-9994) copyright Jeffrey P. Roth 2011.
