10 Tips on the Financial Matters of Caregiving - TIP #10: Help When Managing a Loved Ones Finances

[agoyer]

Family caregiving can include a wide range of roles, one of which is helping a loved one manage their finances, or taking over financial management for them. I've done both, and it was one of the most stressful aspects of caregiving for me. There are things I learned along the way that can make your experience much easier. These are some basic tips to help you manage this role. 

• If your loved ones set up powers of attorney for finances it will make your job much easier. Many people do this as part of their estate planning, and/or when they set up powers of attorney for health care. Having financial power of attorney will enable you to pay bills, access their bank accounts and talk with companies about money owed. etc. An eldercare attorney or estate planning attorney can be very helpful in talking over the various options. 
• Keep in mind, however, that some companies may not recognize your power of attorney, or require their own power of attorney paperwork to be completed. So if you are caring for someone whose health will likely become worse, especially cognitive health, you might want to check with all of their accounts to ensure they will recognize your power of attorney. Do this before they are unable to sign or approve your involvement. For example, when my parents sold a property that was in their living trust, the check was made out to their living trust, and the bank wouldn't let me open a new living trust checking account for my parents. They had to sign mounds of paperwork to do so. Fortunately they were both still able to sign, but it was very physically difficult for my mom who'd had a stroke. Had I known that a separate checking account would be needed, I would have tried to set up up before their health deteriorated.  In addition, some investment accounts require their own powers of attorney be signed, and even utility companies required my dad to get on the phone and tell them it was ok to talk with me. 
• You may want to have your loved ones add your name to their bank accounts (and other accounts where it makes sense - discuss with your attorney). This is often called a "joint account". My parents did that when their health was better, and it made it easier for me to pay their bills and deal with their accounts after they passed on. Be sure to check with your lawyer and your own personal financial advisor to ensure this is the best step for you.
• If you're uncomfortable with or unable to manage the day-to-day finances for a loved ones, there are money-management programs that help with bill paying. To find one, contact an Area Agency on Aging. You can also hire money managers or use a service like Silver Bills, a household bill management service that reviews bills and authorizes payment for a flat monthly fee. Another option is to find a service through the American Association of Daily Money Managers (aadmm.com), a group of individuals and small companies nationwide.
• It's a good idea to keep your money separate from your loved ones' money. That way there are no questions about how - or whose - money was spent. 
• Keep detailed, up-to-date records of any actions you take regarding your loved ones' finances. As you pay bills, access savings or investments, transfer funds, etc., be sure to document every thing you do. This could be important for other family members to be kept apprised or if they question anything. It can also be helpful as you make decisions or work with a financial advisor. 
• Ensure loved ones are receiving any benefits they may be eligible for. This will help increase their income and care budget. Look into Medicaid, Veterans benefits, help with utilities, etc. Check out AARP's state Guides to Public Benefits for information about eligibility and application.
• Seek help from a financial advisor, accountant, financial planner and/or other impartial financial experts. With objective advise, you'll have more peace of mind that you are being the best steward of your loved ones' finances, and they may recommend things you hadn't thought of. They can also tell you the pros and cons of taking steps like creating joint accounts. 

The AARP Financial Workbook for Family Caregivers is available in English, Spanish, Chinese, and a Military/Veterans version. The Workbooks provide helpful tips and checklists that can help you compile important financial documents, create a caregiving budget, and find other organizations that will support you and your family member through your caregiving journey.

Take care,

Amy Goyer, AARP Family & Caregiving Expert

Author, Juggling Life, Work and Caregiving

[GailL1]

OH, yes - Durable POA or full guardianship depending upon the situation.

One thing, Amy, I would add is becoming the Representative Payee for Social Security.  SSA does not recognize POA's - has to be their way.  However, a beneficiary can now go onto their individual SSA account and designated a person as their Representative Payee in advance.  That also helps when the time comes -

The other thing is the Medicare beneficiary can also establish their health care representative on their individual Medicare.gov account.  This matters because that person will be able to discuss any Medicare matter with them without the beneficiary doing the call or doing any of the talking.  

You know if places know you, they sometimes will let the formalities slide - but we are getting far away from intimate dealings of yesteryear, so it is best to have that legal paperwork and

PLANNING IN ADVANCE is the way to go for sure.

[agoyer]

@GailL1 All good points to add! I was trying to keep my "tip" from being too long, but those are all very important points! Thanks for adding!!!