Two years ago, I wrote a couple of pieces (here’s one, here’s the other) on the difficulties cutting through a ridiculous quantity of red tape regarding my mother’s money matters. At the time, she was suffering from the early stages of dementia, and while my brother oversaw the medical aspects of her condition, it fell to me to handle the financial side.
That proved to be a much bigger undertaking than I expected because, to be frank, we hadn’t planned ahead enough. Though I had access to her checking account at one financial institution, she had other accounts elsewhere, as well as retirement accounts, credit cards, social security, and a pension. All of them required hours upon hours of finding the right person to talk to and filling out the right forms.
Mom wasn’t able to help much because although she’d always been a fairly organized person, she’d lost track of a lot of things as her mental capacity faded. Having a valid Power Of Attorney helped, but I was shocked to discover that the Social Security Administration (which also handles Medicare) does not recognize that legal document. She also had never set up online access to her Social Security and Medicare accounts, and the SSA wouldn’t help me do that on her behalf. They insisted she’d have to go into one of their offices, but even if I’d taken her, she couldn’t have made sense of the questions, let alone provide valid answers.
When it came to the banks, they all insisted I visit a local branch, but she lived a thousand miles away, and her institutions had no branches anywhere near where I live, so I couldn’t just stop in and deal with a bank official in person. I had to keep working the phones until I found a friendly person who was willing to assist me — at times, I felt like I was trying to find a needle in a pile of needles.
Mom died in May of last year, but that hardly ended the rigamarole. Not only did I have to close all of her remaining accounts, but also ensure the funds were distributed to my brother and me as her only beneficiaries. I also had to gather all the details to do her taxes, but none of the places she’d had accounts had sent their necessary paperwork to me. I had to again fill out some special forms and then have my accountant access some secret IRS database in order for him to gather the information he needed to file her final federal and state tax returns.
The good news is that, this week, I received her refund check and was able to deposit it and then split the proceeds and some other remaining funds with my brother. Fifteen months after her death, I can finally say her financial house is in order, and I’m about to close the last account that contained any of her money.
I’m sharing this with you in the hopes that you’ll learn from our mistakes. If you have an elderly parent, don’t wait another day to get involved in their financial life. You may think they have things covered with a will, but that’s only good for distributing whatever’s in their estate after they die. It’s much more likely you’ll have issues before their death, particularly if they develop dementia. But even if they don’t, they’re going to need a lot of help navigating some very deep and choppy bureaucratic waters to ensure they get the benefits they’re entitled to.
Here are a dozen starting suggestions, based on my experience:
- Get and keep track of all the details you can on bank accounts, retirement accounts, brokerage accounts, credit cards, mortgage or rent payments, health insurance, dental insurance, vision insurance, etc.
- Make sure they have online accounts for Social Security and Medicare — and that you know the login and password.
- Do the same for any other online access they have, or set it up if they don’t (and keep track of the information!).
- Check all their bills, including those that are paid automatically from their checking accounts (at one point, I discovered a doctor who’d been charging my mother a quarterly fee for several years, even though she’d never gone back after an initial visit).
- If they have to move, who do you contact to shut off their cable TV, electricity, water, and gas? Also, what happens if they forget to pay their bill?
- If they own their house, where are the deed and other ownership documents?
- If they have a safe deposit box at a bank, get your name added so you can get in there when necessary.
- Do they have life insurance that’s still in effect?
- If they were a union member — as Mom was — there may be a benefit that you’re not aware of, so call the union office and find out.
- Get copies of a couple of years’ worth of tax returns, and any that are filed in the future. You’ll be surprised how often you’ll be asked about them.
- Make sure that their beneficiaries are on file with every institution you deal with.
- Get a Power Of Attorney. Your parent may be uncomfortable giving you this power now, but you’re gonna need it when the time comes, and it’s better to have the discussion now than try to get the paperwork executed after their memory has lapsed.
You may think you don’t have to worry about yet. Perhaps your parents seem as if they’re healthy and happy and independent and not facing any of these challenges. But believe me, that day will come sooner than you expect it, and any work you do on these matters now will save you (and them) an enormous amount of time and frustration.
After more than two years in this red tape quagmire, I can’t begin to tell you how much lighter my shoulders feel with this burden finally lifted.