Second Marriages, Blended Families, and the Elderly

Maybe the second marriage occurred when your parent was younger, maybe as a result of a divorce, and you and your step-brothers/sisters have grown up together. Maybe the second marriage occurred later in life when your mother or father was widowed and you and your step-brothers/sisters have gotten to know each other as adults.

It's wonderful when the various parts of blended families get along and enjoy each other, regardless of what stage of life the blending occurred. Every family works out the relationships based on their individual circumstances.

When an elderly parent begins to need more assistance, these 'step' relationships and responsibilities can become difficult. The difficulties become compounded when there are financial issues and the different parts of the family have different financial situations.

Some simple different scenarios:

Henry and Pam were both widows with grown children when they met in their 60's. After dating for a few years, they were married. Their children lived in various parts of the country and only saw each other on occasion. Now well into their 80's, they were experiencing enough health issues that some decisions needed to be made. Their own children had Powers of Attorney and Healthcare Powers of Attorney meaning decisions were being made separately. These adult children really didn't know each other and didn't want to make joint decisions. Adding to the difficulty was the fact that there was a considerable difference in finances between both Henry and Pam as well as their various children.

It was also a second marriage for Irving and Lois. Irving's son never liked Lois. As Irving's health began to deteriorate, the son wanted to make sure that Lois didn't use up too much of Irving's money. The son was able to move money from Irving's personal investment account into his own account. Irving and Lois had always pooled their income to live on. The reduction in income resulting from the son shifting capital was causing Lois to not be able to afford to hire aides to help care for Irving.

The above two examples illustrate a couple of potential types of problems. Even with the best of blended family relationships, there will be issues. If you want to move your aging parent to be geographically closer to you, are you going to separate them or move them together? If there is a significant difference in financial abilities, are you willing to help pay for the step-parent's care?

Good planning and communication before a crisis arises is the key. Not every possible scenario can be planned for but while everyone's physical and cognitive health is good, the conversations must be had.

Budgeting-- Even More Important for the Elderly

Budgeting. Ugh, not a process that anyone enjoys but everyone know that should be done. It doesn't matter if your income is $1000/month or $100,000/month, it's still important to plan spending levels. Many people assume that once they retire or reach a certain age that they no longer need to think about budgeting. The reality is just the opposite, budgeting is even more important for the elderly.

The biggest fear that most elderly people have is outliving their money. But, a big mistake that the aging make is to not pay attention to where they're spending their money. I think the assumption is that their expenses at this stage of life are beyond their control. This is far from true.

Here are some examples of places to look to save.

Drug costs. Most seniors today have Medicare Part D prescription drug coverage. But, this doesn't mean that there aren't ways to save. Pay attention to what is prescribed. Some drugs may not be covered in your plan but a good substitute may be. Look into different stores or mail order options to see if the prices vary. Pay a lot of attention to over-the-counter products. There are huge price differences from one retail chain to another. Convenience becomes a factor in these decisions, especially if driving is a problem.

Car-related issues. Cars are expensive to drive, maintain, and insure. Many elderly couples keep two cars. As they age, there may be less of a need for both cars--maybe they always go out together, maybe one really should no longer be driving, maybe they live in a community that provides some transportation services.

Lifestyle. Ah, this is a tough one. Most people, the elderly included, want to continue the same lifestyle that they are used to. Again, it doesn't matter what income bracket. An elderly person's income may not be able to continue to support belonging to multiple country clubs, a lot of restaurant dining, or buying generous gifts for family members. It also doesn't mean going to the other extreme and living like a hermit. But, as hard as it may be to change, staying the course when it comes to day-to-day lifestyle issues may not be realistic.

The key to budgeting is to realistically examine where money is being spent and make conscious decisions about spending instead of blindly going forward month-in and month-out. This is true at any age but especially true for the elderly. There aren't too many options for generating additional income to cover the spending.

Misleading Medical Information and the Dangers to the Elderly

An earlier post was about phishing emails and how hard it was to realize when it wasn't a legitimate email. Today's subject is similar but related to medical and pharmaceutical information. It could go in a number of different directions, but because Kitchen Table Finance is aimed toward baby boomers and their elderly parents, this will focus on information found in mainstream newspapers.

I was sitting at the kitchen table in one of my client's homes, working on their bills. Annie and Bill were a well educated, sophisticated couple. Bill was well into his eighties and suffering from serious vision problems. As he could no longer read the paper, Annie was reading it out loud to him. I couldn't help but hear the information as she was reading. It was about a product containing calcium, vitamin k, and other miscellaneous vitamins. To listen to what the article was saying, you'd think that they had just discovered something as game-changing as Penicillin. They both decided to call the phone number given in the article to order the product. I try to keep up with the news and I was surprised that I hadn't heard about this particular combination and protocol and all the medical problems that it was solving. When I was done, I asked Annie if I could look at the article and copy down some of the information. When I saw what she had been reading I realized that it was an ad set up to look like an article.

The elderly are very vulnerable to getting sucked into buying something that promises to solve all their health issues. Hopefully the product at least does no harm. Beware of 'miracle' cures for anything. Encourage your parents to ask their doctor or pharmacist. At the very least, you can do some research on some of the reliable medical websites. Most elderly people don't have money to waste on useless products and certainly can't risk taking something that could have adverse effects.

Phishing Emails, Online Scams, Etc.

It's almost impossible today to not have some of your personal and financial affairs on the computer. No matter how savvy we think we are, the 'bad guys' are one step ahead. I thought I knew the red flags. I read the articles telling you what to watch out for. And guess what? I fell for one the the Bank of America phishing emails.

I got an email from Bank of America telling me I had a 'member alert'. The email had the Bank of America logo, Bank of America copyright information, and a Bank of America email address. I've since gone back to that phishing email to verify that it was a Bank of America extension on the email address and it was. They gave me a link to go retrieve my alert. Now, in hindsight, I should have not used their link, I should have gone directly to the Bank of America site. In my defense, Bank of America has installed some new security software and at times the login is a bit different. Once I was on the site that I had linked to, I was asked some security information to validate who I was--which I stupidly filled in. I was to then receive a validation code which would let me proceed to my account. Surprise, surprise, that validation code never came. At this point, I had already realized my mistake and was on the phone to the fraud department at Bank of America.

I'm openly admitting my stupid blind trust of a real looking email. I'm somewhat horrified at how easy it was to do. If I fell for it, lots of other people fall for it too.

So, here's some of the lessons I learned:

1. Never use a link given in an email. If the email tells you that you need to do something, go to the company's website directly.

2. Never give a social security number, account number, password, debit card number or any other critical piece of information.

3. Stop and think before you act. Use your smarts (I apparently lost mine yesterday).

4. Take into account the type of firm you (supposedly) got the email from. Would a bank really ask you for certain pieces of information? As another example, there's an email that had been circulating from Apple that lead you to think you had a virus on your computer and wanted you to buy a defender piece of software. As you were going through the process of ordering this software and doing a virus scan, these loud beeps went off every time it supposedly found a virus. Thinking logically, Apple would never have this jarring, awful noise go off--that was when I realized it was a scam.

Hopefully for me, I caught my mistake in time. I had to close my Bank of America account and put an alert on our information with the Credit Reporting agencies. I hope that by telling you what happened to me, it'll save it from happening to you.

Keyless Ignition and Keeping Your Aging Parents Safe

Many of the new cars today have a keyless system--you keep your key in your pocket or purse and just push the button to turn on/off your car. This seems like a wonderful convenience (especially when you've just gotten a manicure). But, like all conveniences, there are some things to be aware of. If your elderly mom or dad has one of these systems in their car, make sure they understand how to use it.

It used to be, when you turned your car off, you took your key out of the ignition. You didn't have to worry about whether you actually turned the car off. With the keyless type, if you get distracted or forget, it is easy to leave the car running and go in the house. The cars have a warning system--some type of beeps--to let you know your car is still on. But, many of your aging parents have hearing issues and may not be able to hear the beeps. The first thing to do is make sure you read the owner's manual to know how their particular car's warning system works. The second thing to do is to establish some sort of back-up warning such as a note on the dashboard, on the entry door into the house, or wherever makes sense. If a car is left running in the garage, there is a potential carbon monoxide situation which can be deadly.

The next issue is what happens when the battery in the key dies. My elderly client had this happen and she got stuck in a parking lot unable to get into her car. Fortunately for her, she had roadside assistance and they were able to put a new battery into the key. Again, the important first thing to do is to read the owner's manual to the car and find out what the back-up system is, what they tell you to do. Establish a plan beforehand.

The final situation I've experienced with my clients was with a husband and wife. They went out to do some errands together and then he was dropping her off at a friend's while he continued on with the errands. Sounded so simple.....What happened was that the key was in her pocketbook. After he dropped her off he went to Home Depot. When he came out, guess what? He didn't have the key to start the car. Luckily for cell phones, he was able to call her and her friend drove her to give her husband the key. I'm not sure what is the answer to preventing this from happening other than plan ahead.

Getting inconvenienced by not having the key is annoying, leaving a car running in the garage is dangerous. Make sure that you and your parents have read the owner's manual to the car, are aware of the potential problems, and have a back-up plan in place.

KISS - Keep It Simple, Seniors

Keep it simple is the goal, start to simply early on. I see my elderly clients with multiple checking accounts, CD's at various banks, a number of small life insurance policies and annuities with different companies. What happens is a lot of confusion, a lot of paper, and a huge administrative issue. What seemed like good financial sense at the time ends up being overwhelming.

Does this scenario sound at all familiar?

It seemed like a good idea to go to another bank in town to buy a CD as their rates were slightly higher than their primary bank. It seemed like a good strategy to take advantage of an annuity that their bridge partner's son was selling. After all, it was nice to help a friend's son out when he was just beginning. Back in the day when Money Markets were paying a decent amount of interest, it made sense to open up another checking account. But, that account couldn't be used as the main account as only a certain number of transactions were allowed per month. Some of these financial investments were titled individually, some jointly, some in a trust account.

The examples could go on and on. The repercussions range from the mundane daily overload of statements to the legal implications upon the death of one of the account holders. Maybe one of your parents enjoyed spending time taking care of their finances, researching opportunities, and investing/purchasing different investment vehicles. That may have worked when they were younger and could keep on top of everything. But, that may no longer be the case.

Listen when one of your parents starts to make little comments about being overwhelmed trying to keep track of their finances. They may be embarrassed to admit that they need help. When you visit with them, notice if there are piles of papers accumulating. That's a sure sign that no one is looking at them.

The first thing to do is to start to make a list of all their accounts, where they are held, how they are titled, how much they are worth, and if there is an advisor or sales rep handling the account. This may take some time to accomplish. I've been working on this with one of my elderly clients and thought I had it complete. Totally out-of-the-blue, an IRA statement came in the mail that I hadn't known anything about.

Once you know all the accounts, a plan can be devised to try and simplify things. Ideas can be to merge checking accounts so that there is only one account to use and keep track of. If there is a primary investment accounts, other scattered items can be brought under the envelope of that primary account. For example, the client I mentioned before has some annuities that were separate from her primary brokerage account. They now are being moved under the umbrella of her brokerage account.

Depending on your level of knowledge, advise may need to be obtained from a CPA, attorney, or financial advisor prior to making too many changes. Tax and estate planning implications need to be looked into before making any changes.

Bringing this conversation back to the original idea of KISS -- your elderly mother shouldn't be confused as to which checking account to write a check from, be stressed about all the statements coming in the mail, or worry about who is watching over all her accounts. Simplifying things will help her now, and you and your siblings when the time comes that one of you need to take things over.

VA Benefits - Another Way to Pay for Care

Veterans that are part of the Department of Veteran's Affairs health care program may be eligible for benefits for either home-based or institutional care. It is an often overlooked avenue to help pay for needed care.

It is far beyond the scope of this blog to go into detail as to how to go about applying for benefits. It is the intent of this post to make you aware that this option exists so you can research to determine if it is a viable option. If your aging parent is a Veteran and is part of the VA system some of the benefits may include: geriatric primary care, home based care, skilled home care, adult day care, VA Community Living Centers, and community based nursing homes.

There are stringent qualification requirements that must be met for both the home and institutional care benefits. Each case will be evaluated individually looking into the case from both a medical and financial perspective.

Each family must decide if they are able to handle the eligibility process on their own or if the better way to go is to hire an advocate to handle the process on their behalf. The important thing though is to take advantage of the benefits available and not be intimidated by the process.

A good place to start the research is on the VA website, www.va.gov/geriatrics/

Family Dynamics and the Impact on Aging Parents

One of the common themes running through both my business and this blog is the impact of family dynamics on the life of the aging parent. We all have 'it' somewhere on the spectrum --few of us have The Waltons, few of us have truly dysfunctional situations. Some of the stereotypical profiles that I've encountered are:

Practical Patty. This is the sibling that gets the job done, that finds the help the aging parent needs, and figures out the insurance issues.

Hand-wringing Hannah. This is the sibling that worries what's going to happen, imagines every possible awful scenario, and is usually immobilized.

Peter Pan. This is the one that has never grown up, the one that never plans ahead and whose head is in the clouds - and probably can't be relied upon.

Squirrelly Sam. This sibling usually has a hidden agenda. It might be that they have been planning on an inheritance as their finances aren't in good order and that underlies all their input into the situation.

Marge in Charge. This is the bossy one who tells everyone what to do - whether they want to be told or not.

I'm sure most of you can recognize some of these profiles and have long histories with your siblings. By acknowledging these issues they can be built into planning for the care of your aging parent. This is the reality of the situation, maybe not the ideal.

Some family histories and dynamics are so emotionally charged that the best option is to acknowledge that the siblings can't work together. In my experiences, the aging parent usually knows this in advance and sets up their affairs so that they are independent from their children's involvement. This situation is even more pronounced when there is a daughter or son-in-law involved that the aging parents doesn't like or trust.

The important take-away from this blog topic is for both the adult children as well as the aging parent to recognize the realities of their own family dynamics and plan accordingly. As I said in an earlier post --if you and your siblings can't get along in a non-stressful social type situation, the chances are really high you aren't going to be able to work together at a stressful, emotional point in time.

Twitter and Daily Money Management

I'm off subject again but, hey, why not? I was at a business networking meeting the other night. I began speaking with a young man who told me that his business was social media marketing. This is one of those careers that didn't exist a few years ago. It's a subject that I'm actually quite interested in although a little skeptical as to how it may apply to my type of business.

I started to ask him questions about using Facebook, Twitter, YouTube, and LinkedIn. Of course he was horrified to find out that I only used Facebook to find my old grammar school and summer camp friends, had never sent a tweet, and only looked at cute dog videos on YouTube. He was happy to hear that I had a blog!

So, he told me I should link my blog to my Facebook page so that my friends would comment on my blog and then their friends would see my blog, and so on. In that way I could geometrically increase my blog audience. I think he thought I was some sort of a throwback to some ancient civilization when I told him that I wasn't comfortable using my friends in this way.

Then we moved on to using Twitter. I know what Twitter is although I'm not sure I get why anyone tweets. I know that I have a hard enough time keeping up with the news, the mail, the email, the texts, what to use my laptop for, do I need an iPad. Some days I'm sure that my smartphone is smarter than I am. Why I would want a constant stream of drivel is beyond me. When I'm at the gym, there is a twitter feed on the tv screen with motivational messages from personal trainers. Enlightening things such as 'finish strong' or 'I'm having a healthy egg white omelet for breakfast' or 'push harder'. Hmmmmmm.

I told my social media marketing guru that I didn't think it was wise for me to try to impart financial information in 140 character snippets to anyone. He insisted that keeping in touch in some way was critical so here are my sample tweets about my daily money management business life.

trying to get to client. 12 cars ahead of me at guard gate. will be late

lost in xyz village. every building looks exactly the same.

90 yr old client. 90 degrees in condo. am hot, hot, hot

30 years of financial records stacked on floor. am hyperventilating

What do you think?

Your Not So Elderly Parents Moved to Florida or Arizona or North Carolina or Wherever

But now your very elderly parents live in Florida or Arizona or North Carolina or Wherever.

I was with a client, Anne, that had moved to Florida from New York a number of years ago. She and her husband were 'young' retirees, quickly made new friends and began a new phase of life. Their children stayed in the Northeast and established their own lives and families.

Fast forward 20 years --Anne's lifestyle has dramatically changed. Her husband has Alzheimer's and is now in a nursing home. Anne goes to the nursing home each day, does his laundry, supervises his care, brings him food, and tries to provide him with some socialization. She's taking great care of him. What's going to happen when Anne needs some similar type of care?

There isn't a boilerplate answer to this situation. Every family situation is different and everyone needs to address their own particular set of circumstances. Here are some questions that may help define the issues specific to your family.

• Can you and your siblings work together to come up with a plan?
• Is one of you willing to take the lead, be the point person and be comfortable that they have the support of the other family members?
• Do you know the state of your parent's finances?
• Is there Long Term Care Insurance?
• Can your surviving parent afford to pay out-of-pocket to have help in the house in the event that they can't stay home alone?
• What is your surviving parent's feeling about applying for Medicaid if they don't feel that they can afford nursing home care?
• Is there a significant difference in the finances of you and your siblings? Can one of you help out financially more than the other(s) and how do all of you feel about that?
• Is the surviving parent willing to relocate to where one of the children live?
• Was a goal of your parents to leave a financial legacy to their children? Or, is the surviving parent willing and comfortable using up most or all of their money on their own care during their final years? How do each of the siblings feel about their parent using up all of their money if that situation arises?
• No matter what the quality of home health care or nursing home care, there needs to be someone paying attention, someone to be the elderly person's advocate. If there isn't a family member able to do that due to geography, family relations, or other reason, are there funds to hire someone?

Speaking in generalities, it is typically the woman that is the surviving elderly parent. The woman has been the mom, the caregiver, the nurturer. Now someone has to step up to the plate and make sure she's taken care of.

As a lead in to my planned next post....it's called Family Dynamics - We've all got them. I have a feeling you can predict where this is going!!

Paying for Home Health Care Part One

Or better known as:

MY SISTER-IN-LAW'S CLEANING WOMAN'S DAUGHTER'S BEST FRIEND

As most everyone knows, needing an aide, CNA, or some other type of professional to come to the house to help an aging parent is expensive. It doesn't matter if the need is for someone to cook and drive or someone to provide medical care. Most people don't have insurance coverage for this type of service. So, once they gasp at the amounts quoted by agencies, registries, community organizations, etc., the typical response is to get names from friends and relatives to hire them privately.

There are definitely pros and cons, as well as some legalities and practicalities, to this approach.

The obvious first perceived advantage is cost. An agency will charge an amount per hour or per day. Some of this money is paid to the aide, the rest is retained by the agency for their services. What many people want to do is to hire the aide directly and save the amount that the agency retains for their services. The service that an agency provides is very valuable and the amount saved by hiring someone directly may turn out to be very costly. Not only does the agency screen all employees, make sure they are properly trained and supervised, they also take care of all payroll issues.

Everyone knows that when hiring household help--aides, nannies, cleaning help, etc --that payroll taxes such as Social Security and Unemployment are to be paid. The reality is that most don't do it. The help wants to be paid in cash, the person doing the hiring doesn't want to do the paperwork or incur these extra costs. Even those people trying to do the right thing end up at their wits end actually doing it.

Doreen's husband's medical issues began to get worse. It got to the point that he couldn't be left alone any longer. Doreen got the names of several aides and set-up a schedule to have coverage for 4 hour shifts each day. She called her CPA to find out how to handle paying each of the aides. He explained that she needed to pay Social Security and Unemployment for each of them, file reports on a regular basis, and calculated the amounts for her. Doreen wanted to do this the right way so she followed his instructions. Her husband's condition worsened and she needed progressively more help in the house. The paperwork associated with having multiple aides each week, different pay scales depending on day/night, weekday/weekend became a nightmare. She basically was running her own home health care agency. When just balancing her checkbook became a daunting task because of all these transactions, she threw up her hands and gave up. She had to decide whether to use an agency so they would handle the paperwork, just pay the aides in cash and forget all the paperwork, or hire someone else to do the paperwork for her.

This is the trade-off. Hiring someone directly whose name you get from a friend or relative may be less expensive if you're not paying their Social Security and Unemployment and if you're not paying an agency fee. But, you also aren't getting the screening, training, and supervision that home health care agency provides.

When the Elderly Stop Driving

Today's blog was supposed to be about paying for home health care. I'm going to postpone that topic until tomorrow. The reason? Partially to vent, partially to pass along information that I finally got.

The subject? How to turn in the driver's license of an elderly person that is no longer driving. You see, the insurance company wants proof that the person is no longer driving so you can't just cut up their driver's license.

The frustration? Trying to find out how to do that. Over the past few business days, I have attempted, multiple time, to get someone at the Florida Department of Motor Vehicles on the telephone. I've tried at 7 AM when they say the office opens, I've tried mid-morning, I've tried mid-afternoon. Sometimes the recording comes on and says that due to heavy call volumes you must call back another time. Sometimes I have been able to actually get in the queue but after holding for an indefinite period of time, I've hung up. Soooooooo frustrating.

So today I finally had to go to the driver's license office in person, wait in line, and finally get to a live person. Here's the information so in the event you have to do it, you'll know how.

How to Turn in a Driver's License

If the driver can't come to the driver's license office themselves, as is the case with my client, the spouse can bring the driver's license in. But, the spouse must bring in their marriage license as identification. Otherwise, they will take the license but not be able to give you the proof you need for the insurance company. If there is no spouse, the person with Power of Attorney can bring in the license (with the Power of Attorney paperwork as identification).

Now, wouldn't you think they could put this information on their website!!!

Home Health Care and the Elderly

At some point there may be a need to hire aides whether on a temporary or permanent basis. It can be overwhelming both in terms of costs and finding reliable help. The information offered in this first blog on the subject is meant to be an overview.

Assuming your aging parent has Medicare as well as one of the supplemental medigap insurance policies, some short-term home health assistance may be covered by insurance if the physician deems it necessary following a hospitalization. As a general rule though, neither Medicare or Medigap policies cover longer term home health care. This falls into the realm of Long Term Care Insurance.

It's important to determine the type of help needed. Is the need for someone to drive your aging parent to a doctor's appointment, grocery shop, and make a meal? Or, is there a need for someone more medically qualified to care for health related needs. This is important when deciding where to go to get help.

Once some of the basic needs are defined, finding the right home health person is the next step. Several options are:

Personal referrals from friends and relatives

Local community based organizations such as religious organizations or local councils on aging.

Home Health Care agencies

Home Health Care registries

The difference between an agency and a registry is that the workers for an agency are their employees. A registry lists independent contractors. This can be an important distinction.

Another factor to consider other than cost (which will be the subject of my next blog) is whether anyone is available to supervise the aide. Unfortunately, the elderly are very vulnerable and easily taken advantage of, especially if they aren't feeling well. Hiring someone from an agency, although admittedly more expensive, may be the better way to go if there isn't anyone around to pay attention.

Maybe there was an era when multi-generations of the family all lived close by and there were plenty of people to take care of an aging relative. For many, this just doesn't exist any longer and other options need to be explored when a family member needs assistance.

Computers, Social Media, and Aging Parents

Twitter and Facebook, online banking and ATM's, blogs and ipads -- they've all become part of many of our daily norms. Some seniors won't touch a computer beyond getting pictures of their grandchildren, some are computer savvy.

The use of technology has many implications when figuring out how to handle the financial affairs of an aging parent. The decision has to be separated into multiple layers.

When an aging parent begins to need help to take care of their financial affairs, the obvious first answer is to have one of their children start to take over. Today, even if the child doesn't live locally, a plan can be implemented due to the technology available. Bills can be sent via email, access can be set-up to bank online, consent can be given to have duplicate brokerage statement sent.

But, even the elderly that are comfortable with technology may balk at this plan. Why? Yes it is partially due to the issue of security of their personal information. But, it's more than that. It's the lack of human involvement that is equally as much the issue. This becomes more pronounced the more home bound the person has become. Sometimes I think we forget how much there is to be gained by the 'old school' way of interacting.

Molly was well into her 80's when we first began to work together. She had had a career in the garment industry in New York and continued to lead a very active life when she retired to Florida. After some medical issues, she needed some help taking care of her household finances. Nothing was terribly complicated and her son that lived out-of-state could have easily set everything up so he could handle things online. Molly was home alone more and more. After having lead a very active, social life she was now very lonely. It was better for someone to come to her home each week to not just pay the bills, but to sit and visit for awhile. I was fortunate to be that person and learned far more from her than I could have ever learned from sitting at the computer.

So, text and tweet, watch movies on your ipad, get your information from google searches, take advantage of whatever the next generation of technology brings. The technology may be very good at getting the mechanics done. But, don't forget to sit at the kitchen table and talk to your grandmother, a friend or a neighbor!

Donations to Charities

There are thousands of wonderful charities doing amazing things. This post isn't to pass any comment about charities and how deserving they are of contributions. The purpose is to highlight some issues facing the elderly and offer some solutions.

Problem #1

The frequency of repeat requests for donations from the same organization is one problem people encounter. Before you realize it, you've given donations to the same charity multiple times in the same year. Obviously you wanted to give money to this organization in the first place, but you may not have wanted to give four times in one year.

Solution

Track your contributions. Not only will it come in handy when it comes to tax time, it will keep you from making unintended multiple contributions. For those that use one of the personal finance software programs such as Quicken, it's easy. If you aren't a computer user, keep a file with the acknowledgements, receipts or just a note from yourself. Then, check that file before sending in additional money.

Problem #2

It seems that once a contribution to an organization is made, the amount of requests from different organizations increases exponentially. Mailing lists are shared and/or sold resulting in getting swamped with mail. It can become especially overwhelming to the elderly. One elderly client of mine read each one of these requests, took them all to heart, and made donations to each. Not only did it start to have an impact on his finances, he began to have to take a tote bag to his mailbox in order to get his mail back to his apartment.

Solution

Each person needs to decide where their charitable dollars will be allocated. One idea is to pick one medical, one religious and one social organization. As difficult as it may be to do, any solicitations from other organizations are ignored.

Problem #3

An organization sends you something - a calendar, an address, book, some note cards-and then a week or so later you get a bill in the mail. You didn't order it and had thought it was a gift because you made a contribution. Now, either you have to pay for it, or figure out how to mail it back.

Solution

This is a way for an organization to make additional money. They get the items in bulk so the whole thing costs them almost nothing over and above the postage. You have a choice to make. Do you want to keep the item? If you do, you have to pay for it even though you didn't order it. If you don't and still have the box or envelope, return it by writing 'Return to Sender Did Not Order' on the outside and give it back to the mailman. If you don't have the mailing paraphernalia, you'll need to pack it up yourself. The next time one of these items comes in the mail, you'll recognize it, not open it, and give it right back to the mailman.

Read Your Financial Statements

Whether they come by snail mail, online, email or some other way, all those monthly statements that come from the bank, a financial advisor, the brokerage company or the insurance company need to be read. For most of us, reading these statements isn't up there on the list of fun things to do. But, if they aren't read, there are repercussions.

Paul always handled the finances. Judy liked it this way and never gave it much thought. Although some of the early signs of Alzheimer's may have been there, Paul hid them well. The first inkling that Judy had that something may be wrong was when their CPA mentioned the high fees being charged by their financial advisor. But, at that point Judy was so overwhelmed by the diagnosis of Paul's Alzheimer's and all the problems that faced her, the mounting pile of statements was not a priority. Many months later her daughter offered to help her sort out the papers and started to really look at what was there. They were devastated to find that the advisor had shifted her into totally age inappropriate investments and was investing on margin. The margin interest alone was costing her $1000 each month.

Whether it is knowing how money is being invested, what type of return is being earned, or the deductible on an insurance policy, paying attention is key. It doesn't mean you have to become a student of personal finance. It does mean realizing if you (or an elderly parent) can no longer be the steward of these things and finding someone to help. It may be a son or daughter, it may be the family attorney, or it may be a daily money manager. It also means not being shy about asking questions if there is something on the statement you don't understand. You know that old saying that the only dumb question is the one that you don't ask.

The important thing is to not ignore the statements. They won't go away and being aware of what's happening is critical to your financial security.

The Death of a Parent

Whether you’re talking with me in person or through this blog, I will always try to share my personal as well as professional experiences with you. The reason I haven’t posted to my blog since the end of June is that my elderly mother developed some serious health issues which ultimately resulted in her passing away earlier this month. I want to share some of what I’m going through with you–maybe to help you in the future, maybe to help me in the present.

Relief wasn’t an emotion I was expecting to feel when I got back to Florida from the funeral in Boston. But, I realized that I’d had so many different scenarios, possible problems, and potential solutions continually circling in my head for so long that it was a huge relief to not have to keep thinking about all the unknowns. You can relate I’m sure: will your mom outlive her money; what to do if a hurricane (or other weather issue) is forecast; can she continue living on her own. The list is endless.

Part of me wants to hole up in my house to process all that’s happened. Part of me wants to dive into all the tasks associated with sorting out the condominium and its contents, settling the estate, and figuring out how to sell the car. For me, the way to cope is action –cleaning out the kitchen cabinets and getting the paperwork started is cathartic. Each one of us has to figure out what works best, there is no right or wrong way to cope.

And finally, in case you think that because of my job, I have all the i’s dotted and t’s crossed and the administration of the estate will go easily, well……I spent the morning today on the phone finding out how to get a duplicate title to the car. I’ve been through every file, the safe deposit box, and the glove compartment (thank goodness, it wasn’t in there) and I can’t find the title. No matter how carefully you plan, something is going to fall through the cracks and be a hassle.

The Conversation About Finances Between Adult Children and Aging Parents

The issue of how much detail parents should tell adult children about their finances is a complex one. All sorts of factors come into play, from the practical to the hot button issues of family dynamics. Every situation is different and there is no boilerplate right answer. The scenarios below are meant to be representative of ones I have experienced in my practice.

John and Mary have always lived well and that has continued into retirement. Their children assume that they have a substantial amount of money and therefore think nothing of coming to them for help. The reality of their finances is that they have always lived right up to the edge – and at times beyond. They aren’t sure how to begin to correct this illusion and change habit patterns.

Eva is widowed and living on a fixed income. She’s proud and very independent. Recently she realized that it was time to stop driving so she hired a woman to drive her when needed. As more and more of her friends have stopped driving, she has had to begin using the driver more frequently. The cost of this is starting to have an impact on her finances but none of her family lives in the area to help out. She doesn’t want to ask for her children for help so she’s staying home alone more often instead.

Dave and Anne were financially very comfortable, not rich but very comfortable and very private about how much money they had. Their son-in-law has never made much money and never seemed very ambitious. Dave just passed away and now Anne is working through things such as Power of Attorney, signatory authority on her accounts, access to the safe deposit box, etc. She’s uncomfortable having her son-in-law know how much money she has but knows that her daughter is the logical choice for these responsibilities.

Adult children as well as their aging parents may be uncomfortable initiating or being involved in conversations about topics that haven’t been discussed before. But, it is important to have the conversation and develop a plan before a crisis or emergency occurs.

Determining Who Should Have Your Power of Attorney

You don’t have to be a Rocket Scientist to…..

Think about whom you want to handle your affairs if you become unable to handle them yourself, and ultimately when you pass away. Really assess which of your children (if any) has the skills needed for the job. A high IQ doesn’t necessarily equate to common sense, good organizational skills, and time management abilities.

Some of the things to consider are:

One person may be a logical choice to handle money or legal affairs while another person may be more suited to be the point person when it comes to the health care and medical responsibilities.

Talk to each person to whom you would like to give these responsibilities. You may find that they don’t want to accept the responsibility or they may need time to think about their decision. This isn’t something that the person should find out about by surprise.

If you are considering naming two people (two children, two professionals, two friends, or any combination of these people) to be co-decision makers, think about how well they will work together. If your children can’t get along when sitting at the Thanksgiving table, chances are that when things are stressful they won’t be able to get the job done.

Another touchy issue to take into account is your son/daughter-in-law and how much influence they will have or you want them to have.

Once your decisions have been made, an attorney should be consulted to implement all the appropriate legal papers such as Power of Attorney, Power of Attorney for Health Care, and Living Wills.

Planning For When You May Need a Caregiver

Who's Got Your Back

We’ve talked about planning for someone to pay your bills and handle your mail if you need help. This back-up plan is about the stuff of daily life. If you are elderly or are facing some major health issues, who will be there to pick up some groceries, take you to a doctor’s appointment, or just sit with you for an afternoon when you’ve come home from the hospital? These can be stressful, upsetting questions to face.

Your friend may have a gazillion children, grandchildren, and great-grandchildren all living within a ten mile radius of her home. And, your sister may live in one of those fantasy neighborhoods with a slew of neighbors ready to pitch in at a moment’s notice. Yes, you’re allowed to have a five minute pity party for yourself if you don’t. Then, start to come up with a plan.

Talk to friends, people in your church/synagogue, and the help in the doctor’s office - anyone you can think of. Many times they know someone looking to make some extra money. Getting some names and talking to them well in advance means you can implement a plan quickly.

Learn about the different types of agencies and the services they offer. Know which supply nurses and aides vs. those that drive to appointments and put a meal on the table. Do the research now.

Give some thought to the concept of ‘pay it forward’. Think about volunteering or getting involved in a community organization now. Hopefully by helping others now, others will help you if and when you need it.

The reality is most people don’t like to ask for help. Or, when people ask ‘what can I do’, it may be hard to have an answer for such a broad question. Or, a lot of people offer to help at the beginning of an illness or problem and then slowly (or maybe not so slowly) the offers of help stop.

Before you need it, really think about how you’ll cope with a variety of situations, be they of a temporary or permanent nature.

Sweepstakes Scams and the Elderly

Most junk mail is no more than just a pain in the neck and environmentally unfriendly. But, for people that are trusting and vulnerable, it can become more than that. Fraudulent sweepstakes and contests via the mail as well as over the phone rob the elderly of huge amounts of money every year.

There are many legitimate sweepstakes and contests (Publisher’s Clearinghouse and Reader’s Digest are two) and the laws that they must abide by have been strengthened over the past several years. Unfortunately, there are many other types of sweepstakes that use strong tactics to entice money out of people. The elderly are a prime target because not only are they vulnerable, when they realize what’s happened, they’re too embarrassed to report the crime.

Here are some rules of the road:

It’s illegal for a company to require you to pay a fee or buy something to enter a contest or sweepstakes.

If you really do win something, taxes will be deducted from your winnings or you pay them directly to the government. If they tell you to mail the taxes to them and then they will send your check, it’s a fake and they will just keep your money.

No legitimate sweepstakes company will ask you for your credit card number. Do not give this information to a caller telling you that you’ve won a contest.

Some of these fraudulent companies purposely have names that are misleadingly similar to the legitimate ones.

Be careful of those very official looking envelopes. Con artists know that using words like ‘urgent’ or putting official types of seals on the envelope make the recipient more likely to believe the contents.

If the postage on the envelope is bulk postage, a lot of people got the same mailing telling them they are winners. Don’t believe it.

If you are at an elderly person’s home and you see an extraordinary number of sweepstakes mailings, start to ask questions. Once someone responds to one of these fraudulent contests, their names go out on the mailing lists and they receive more and more mailings.

Again, if you’re at an elderly person’s home and you see a large number of magazines, ask questions why. They may be subscribing to magazines thinking it will increase the chances of their winning.

You will never be asked to wire money to a legitimate sweepstakes company.

Keep telling yourself – if it sounds too good to be true, it probably is.

How to Get the Bills Paid

There are many ways to get the bills paid today. Each has pros and cons and realistically most people use some combination of all of them. The answer to the question of which method is the best will change from person to person and from one stage of life to another.


1. For the elderly, putting the routine bills on auto-pay may be practical. If forgetfulness is becoming an issue or if writing out the check is becoming more difficult, auto-pay ensures that bills will get paid in a timely way. Implementing auto-pay requires you to provide the company with your bank’s routing number and your account number.

2. For the person that has made accumulating points, cash back rewards and frequent flier miles a passion, putting everything possible on a credit card is the way to go.

3. For the person that is pressed for time but doesn’t want to build-up credit card balances, online bill pay through a bank is the answer. Once the set-up is complete, multiple bills can be paid in a matter of minutes. Before you sit at the computer, gather statements from all the payees you want to set-up. You’ll need account numbers, mailing addresses, and phone numbers for each.

4. For those that don’t trust the computer, writing out checks is the method of choice (and don’t even bother trying to convince them otherwise). Now that banks are no longer returning cancelled checks, this method loses one record keeping advantage.

5. For those that can no longer handle the bill-paying task at all, there is a Daily Money Manager. A Daily Money Manager is a person that comes to your home on a regular basis and helps with the mail, the bills, making deposits, balancing checking accounts, and more. It is a way to provide the support needed to keep living independently. The American Association of Daily Money Managers provides a tool on their website for a geographical search to find a Daily Money Manager in your area.

Bill Paying

Someone should have signatory authority on your checking account. This is especially important if you are single, widowed, or divorced. What would happen if you were suddenly incapacitated for a period of time? Who is going to keep your financial life current? You don’t want to come home from a period in a rehab facility and find letters threatening to turn off your electricity.

If you don’t realize how important this is, here are two similar scenarios with two different endings:

Both Anne and Shirley were recently widowed. Shirley had her attorney change her Power of Attorney from her husband to her daughter and had been to the bank to add her daughter’s name to her checking account. Anne, on the other hand, was having a difficult time coping and hadn’t done anything. Unfortunately, both of them took major falls and had serious medical problems. Shirley’s daughter was able to step right in and take over her mother’s finances. Anne’s children were attentive and wanted to help but their hands were tied. While an attorney dealt with the process to correct the situation, they were trying to pay their mother’s bills out of their own accounts but that was causing them quite a hardship.

Some things to consider when deciding to whom you give signatory authority:

1. The person you decide to give signatory authority to should, obviously, be someone you trust. But, it also should be someone who will follow your directions. The idea is that they will pay your bills on time, not that they would make any significant changes to your life.

2. Does this person pay their own bills on time? Your scatter-brained best friend may have the best of intentions but may not be right for this particular task.

3. Pick someone who lives near you. Your son/daughter that lives 1500 miles away may fly in for a short period of time until the emergency is over but that won’t help if you’re laid up any length of time.

4. Pick someone who is discreet. If they are going to sort your mail and pay your bills, you don’t want it to be someone who’s going to tell the neighborhood about your American Express charges or the type of catalogs you get in the mail.

Lastly, take into account how much exposure you’re comfortable with. Think carefully about the flow of your money in a typical month. If you have large sums of money being electronically deposited to your checking account, you may want to open a separate account for household bills with a certain dollar amount automatically transferred into this account. You would then give someone signatory authority to this household account only thus limiting the amount of money they have access to each month.

It All Starts with the Mail

To some of you, dealing with the mail each day is routine, something you don’t give much thought to.

For others, the mail is an overwhelming task that leaves you exasperated on a daily basis. There can be varying reasons for this – the beginnings of Alzheimer’s, multiple people getting the mail and leaving it everywhere, or simple disorganization. When mail gets ‘misplaced’ throughout the house life gets much more stressful and complicated than need be. Bills don’t get paid and extraordinary amounts of time get spent searching for things, never mind the mess.

I have been in people’s homes and in the hunt for the mail and bills, found them in kitchen drawers, on kitchen counters, in the car, in bedroom night tables, in between cushions on the couch, and so on. Sometimes it has been opened, sometimes it hasn’t. The consequences of lost/misplaced mail can be serious. For example, checks may become invalid after a certain number of days, insurance policies lapse if not paid within a certain time frame, and interest charges on credit cards mount up.

Regardless of the reason that the issue exists, the important thing to do is to establish a routine that everyone follows:

1. The mail should be sorted immediately if possible, or at the very least, get rid of the junk. This will reduce the clutter.

2. It is critical that one place be designated as the holding place for bills. It can be anything from a shoebox to a specific drawer to a priceless antique accessory. Wherever that place is, everyone - spouses, children, cleaning help, and aides –must follow the routine.

3. For those with the beginnings of Alzheimer’s or someone living with a person with Alzheimer’s, it is critical to emphasize the routine over and over again. If the person with Alzheimer’s is getting the mail, the routine that’s emphasized is simply to put all the mail in the one designated place. Someone else must do the sorting.

4. Keep a shredder handy. The following are some of the things that should be put through the shredder, not just in the wastebasket: anything with an account number on it; credit card solicitations; convenience checks that come with your credit card bill - those blank checks that they give you to use to pay other bills.

And finally, be practical. Don’t set up a system that’s too fussy for everyone to keep up with for the long haul. It doesn’t matter whether you use a stack of empty shoe boxes or this really cool $198 mail organizer I saw in a catalog, there’s one constant. The mail comes every day, and every day you’ve got to deal with it.