"Our situation no doubt will be more common as people live longer, and apart from their grown children. The age and the distance mean that an increasing number of these grown children will be invited into their parents' financial lives, with little clue about any of the details the parents had handled for decades." In a 2014 Wall Street Journal article, William Power reveals the struggles faced by his wife Julie while taking over the finances of her parents at their request. In the article, The Difficult, Delicate Untangling of Our Parents' Financial Lives, William shares, "So since November 2014, Julie and I (mainly Julie) have been trying to reconstruct, clean up and resolve a financial life we were never privy to." Their situation is not uncommon. How many of us have intimate knowledge of our parents' financial workings? Like Julie, many of us will have to face this daunting task sometime in the future as our population ages and faces incapacitation from dementia, stroke, and long list of other physical ailments, which make it difficult or impossible for them to operate at the level they once did.
In an effort to help the rest of us, William shares, "But nothing about it has been either routine or expected. I have watched as Julie simultaneously struggle to make sense of her parents' financial Rubik's Cube and deal with their deteriorating health—all while doing the stuff of daily life that used to fill her days. We have learned a lot, though, and some of it might be helpful to others who find themselves in a similar place someday. For our part, what we've learned is already affecting our approach to finances—so our own children will have an easier time when it's their turn to sort out our financial lives." Below are a few suggestions from William & Julie.
Before you do anything else, figure out what you're doing now
Julie started several files and lists of their assets. Every day in the mail, we learned about something new when a statement or bill arrived, and at the same time, we sorted through the files as her father tried to fill in some of the blanks. I give credit to Julie's parents for being able to avoid debt. There was just no overall accounting of their assets or clues to whether a certain document was vital or junk.
Repeat after me: POA, POA, POA
Everybody is always told how important it is to get a Power of Attorney document or POA. Let me assure you—as important as you think it is, it is more important than that.
The notarized form gives you the legal right to execute financial transactions on behalf of someone else. When you are stepping in to help run someone's financial life, you can't do anything without the POA. These limitations include dealing with banks, pensions, financial advisers, and medical facilities. Over and over again, you will need to fax, mail, or bring in that POA.
It helps to have a team, both family and outsiders
Sometimes it is worth it to get outside help. When you are already dealing with life's normal issues, like tending to your own children or setting up a parent's medical-rehab appointments, it can be overwhelming to also sort through Medicare forms that you've never seen before.
Hiring a social worker known as a geriatric consultant, if it's in your budget, can help you keep your sanity. They can assist you in filling out forms and knowing what rehab facilities make sense for your situation. The trendy term for these advisors is "aging life care consultant."
"I wouldn't have thought of needing this, but a friend of Julie's did, and what a relief it was just to have someone who knew immediately what the legitimate rates are for personal-care help, or the better walkers or shower equipment her parents would need. We also signed on for an 'elder lawyer' recommended by the consultant, to look at the parents' will and the POA."
In an online world, be ready to be thrown back to the 1970s
When you are invited into a parent's financial life, you are also going into a time machine.
I don't just mean the smell of old cardboard and paper. It is startling to be cast back to a generation when everything was offline and decentralized.
Over and over, we find an insurance document or pension papers from the 1960s through the 1980s, and there is no way of telling at first whether it is important or irrelevant. The folks don't always know. For those of us used to getting information with a few clicks, the detective work needed to get the information about even a single document can be jarring.
Little things we never would have thought of, before this
William and Julie were surprised at the slow stream of complications that flowed in over the months, like the monthly withdrawals from the bank accounts that continued even though the service was no longer needed. "Another surprise from out of the blue came over the summer. Phone calls from the New York community bank told us that Julie's parents have an account that was overdrawn for five months and a $12-a-month penalty was being charged. It turned out, that account was set up to make automated payments for their safe-deposit box, and it slowly was drained to nothing over the years, despite the money they had in another account. We headed back to Queens to close that account and the safe-deposit box."
Have mercy on your own children
This is a topic we have discussed on our website many times. Document everything and let someone know where the information is. "We aren't going to leave [our children] with haphazard records, and notes left in handbags. We have written out a clear, comprehensive list of assets, debts, passwords, and user names. It is in a safe place that a trusted family member can get to.
It is a chore that is easy to put off, but it took just an hour at first, then we update it as needed."
The article is well worth your time to read. After you read it, give us a call and we can help. At Idaho Estate Planning, we understand the challenges faced by elder Americans and their families. We have resources throughout the Treasure Valley, experts in the field of Elder Care & Planning. We have the experience and expertise to help you maintain your options and protect yourself as well as your loved ones, now and into the future. Remember, good planning is no accident.