Caregiving: Taking Over Your Parents’ Bank Account

Negotiating the management of your parents' bank account might be even tougher than taking away their car keys. But ignoring the problem—even if you're respecting your parents' wishes—can mean that bills don't get paid, or they get paid twice and the checks bounce. Even worse, your parents could get scammed by fake charities.

Fortunately, there are some tools and tactics to help families handle the older generation's finances: setting up a power of attorney, a legal document that lets loved ones take care of their finances when they no longer can; monitoring accounts online; or even hiring a professional bill payer. Some banks offer bill-paying to older clients with at least $250,000 in their accounts. Or you could hire a licensed and bonded private fiduciary to pay the bills.

Liz Davidson, chief executive of Financial Finesse Inc., a corporate financial educator in Manhattan Beach, Calif., recalls one friend who chose not to intervene while his 92-year-old mother would regularly mail $20 checks to sweepstakes. Finally, after his mother tried to withdraw $2,000 to send to a telemarketer, she let him take possession of her checkbook and mail, and she gradually got over the obsession.

If your parents are reluctant to cede control, you can suggest starting with an "unofficial" role of financial monitor. Then you can gradually move into a more official role of money manager if/as both generations get comfortable with sharing the reins.

Carol Kaplan, 49, of Washington, had grown increasingly worried in the past few years about the stress that paying bills was starting to cause her parents, who are in their 80s and live in Florida. "I hear from them how they're incurring late fees, or that they have paid a bill twice and incurred bounced-check fees, and it just seems to snowball," she says. So, six months ago, she persuaded them to let her set up online bank accounts on their behalf. "It took a certain amount of cajoling," says Ms. Kaplan. "I had to say, 'Look, I'm your daughter. I have no interest in touching your money. All I want to do is be able to monitor it to make sure no mistakes are being made.'" She spent an afternoon listing their assets on a spreadsheet, and then set up online accounts. Finally, she persuaded them to let her put their bills on autopilot.

Once you have access to your parents' accounts, you can also help them consolidate their assets into fewer accounts and credit cards, which could help prevent overdrafts and extra fees. Ms. Kaplan helped her parents divide some large bills, including their car-insurance bill, into monthly installments, for example.

A more formal step is to establish a power of attorney, which allows you to act on your parent's behalf in all financial maters, such as directing their financial advisers and brokers. It can be written to go into effect immediately or if your parent's doctor certifies that he or she is incapacitated, depending on your parent's comfort level. If you need a power of attorney for only a bank and brokerage, you could ask those institutions if they have specific forms to fill out.

Finally, if you're willing to spend a few thousand dollars, you can set up a revocable living trust to hold a parent's assets and make you and the parent co-trustees. Living trusts are often used to avoid probate, but they can also make it easier for a child to help a parent manage his or her finances. Having a trust will also address any concerns banks and investment firms may have about children abusing powers of attorney—an increasing concern among such institutions, says Harry Margolis, an elder-law attorney in Framingham, Mass.

-From: “Taking Over Dad's Checking Account” Family Value column, by Kelly Greene, The Wall Street Journal Online, March 6, 2010 http://online.wsj.com/article/SB10001424052748704125804575096180443138188.html retrieved 3/17/10; cited in/linked from: News from Margolis & Bloom, LLP - March 15, 2010, Margolis & Bloom, LLP, March 15, 2010.

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