Alzheimer's, Mom and Money: When a Retiree Can't Remember
By Cameron Huddleston, Contributing Editor, Kiplinger.com
When I started noticing signs that my mom's memory was fading, I was too afraid to tell her that I thought she might have dementia or Alzheimer's disease. So I called her primary-care physician and asked him to suggest during her next appointment that it would be a good idea for her to see a specialist to check for memory loss.
She took his advice, though the first neurologist she saw said that her test results came back relatively normal. Thankfully, one of her friends stepped in and took her to another doctor, who did diagnose her with Alzheimer's disease.
The diagnosis affirmed what I already knew -- that my mom's ability to handle financial tasks (as well as daily activities, such as cooking, bathing and dressing) would erode, possibly very quickly. As such, I told myself that I couldn't be afraid to step in and start helping her manage her finances. Here's how I did it:
I got power of attorney. After my mom was diagnosed with Alzheimer's, I knew I had to act quickly to get power of attorney to handle financial transactions for her. Without it, I wouldn't be able to access her accounts, sign checks for her or manage her money when she was no longer able to do so. And I couldn't wait until she didn't have the mental capacity to handle financial transactions before I secured this document. For a power of attorney to be valid, the person has to be competent when he or she signs it. Otherwise, you'll have to go to court, and a judge will have to deem your parent incompetent.
I used the diagnosis to start a conversation with my mom about the disease and how it meant her memory and ability to do things would only get worse. I told her that I wanted to be able to help her. To do so, I said we needed to meet with an attorney to draft all the necessary legal documents. She agreed.
My mom granted what's called a durable power of attorney to both my sister and me. It took effect immediately, and it will stay in effect even if she's declared incompetent. Another option is a so-called springing power of attorney, which will not take effect until your parent is deemed incompetent by a doctor. We opted against a springing POA because we were concerned that a doctor might be hesitant to sign anything that could lead to a legal dispute.
Once I had this document, I started contacting financial institutions at which my mom had accounts. Proof of power of attorney varied from institution to institution. Some simply took my word for it; others, such as her credit card company, wanted me to send the original document, but I insisted that I could send only a copy because my mother's attorney had instructed me never to send the original (which could be misused if it fell into the wrong hands). We went together to her bank, which required that she sign documents giving me power of attorney for her account there.
I started monitoring her accounts. My mother isn't tech savvy -- she doesn't even own a computer. And that worked to my advantage. I was able to set up online access to her accounts to monitor them, using passwords of my choosing. I wanted to take her checkbook away because she had been giving freely to almost every charitable organization that sent her a donation request. To do this, I suggested setting up automatic bill payments so that she wouldn't need paper checks, but she balked. Instead, I went through her mail every time I visited to weed out solicitations from organizations to which she had no ties. I wasn't able to take away her checkbook until two years after her diagnosis, when I moved her into my home.
I took away all but one of her credit cards. Experts I spoke with said that it was okay to be sneaky at times when dealing with people with Alzheimer's in order to protect them financially. That could mean going through a purse, finding a checkbook and copying down an account number so that you can monitor the account, or surreptitiously looking through files to get a better picture of a parent's finances. In my case, I pulled all but one of the credit cards out of my mom's wallet when she wasn't looking. For someone who could easily leave her purse behind without noticing, it was too much of a risk for her to carry all those cards.
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Luckily, my mom didn't have a debit card. She simply used checks to get cash from her account. I left her with one credit card to pay for things when she didn't have cash on hand. This card was issued by her bank, and because I had set up online access to her bank accounts, I was able to monitor her use of it.
Once my mother moved in with me, it was much easier to take over her finances entirely. Even before that point, though, I was incredibly lucky because my mother was willing to let me help her. The few times she resisted my efforts, I simply backed off and tried again later or used a different approach. I've also been grateful that my sister and I have never had any arguments over how to manage my mom's money.
It's not always this easy for children to help parents with financial tasks, though. Some parents don't want to be told what to do by their kids; others are suspicious of their kids' motives. If you're in this situation, see Managing Your Parents' Money for tips on how to start a conversation with your parents and how to step in without sacrificing their dignity.
You also can reach out to a third party, such as your parents' doctor, attorney or accountant, to suggest that your parents let you lend a hand. They might be more receptive if the advice comes from a professional they trust. Or you can hire a geriatric care manager, who can facilitate communication between you and your parents. The National Association of Professional Geriatric Care Managers' member directory can help you find care managers in your area. They charge $100 an hour, on average.
