When Aging Parents Need Help With Financial Tasks

FROM WSJ.COM

Aging parents may need help managing daily finances to guard against costly mistakes or elder abuse. But for family members or caregivers, it can be difficult to find a trusted individual to do such work.

So-called daily money managers do everything from pay the bills to manage the mail, budget, fill out forms, organize financial papers and keep track of medical and other insurance claims. Even more important, they can help stave off fraud and abuse by being another set of trusted eyes on mom and dad’s accounts.

In some cases, “having that daily money manager can honestly save people their life savings,” says Emily Allen, vice president for income impact at the AARP Foundation.It’s a relatively new field, though, and practitioners come from a variety of backgrounds, as well as with a wide range of experience and areas of expertise. What’s more, because the industry is pretty new, it’s also largely unregulated.

This lack of formal oversight or licensing from a government agency makes it critical for adult children to do plenty of homework before handing over the keys to their parents’ sensitive financial information.

“Consumers must do their checking to make sure that somebody who is purporting to be a daily money manager has the appropriate background, training and references,” says Sheri Samotin, president of LifeBridge Solutions LLC, a Beverly Hills, Calif., firm that offers daily money management and other fiduciary services. “Because at the moment, anybody could hang out a shingle and call themselves a daily money manager.”

Getting started

The simplest way for people to start gathering potential candidates is to “ask people you trust, like an attorney, trusted family member or accountant,” Ms. Samotin says.

In addition, a relatively new professional society—the American Association of Daily Money Managers—is another starting point to consider, according to the AARP Foundation’s Ms. Allen. The national organization, based in Bellefonte, Pa., has more than 800 members, a nearly 60% increase since 2005. Members of the association subscribe to a code of ethics and standards of practice, which require them to disclose any conflicts of interest and respect client’s privacy, among other things.

“If you have somebody who is trying to sell you something and also be your daily money manager, that is a red flag,” says Ms. Samotin, who is a member of the daily managers association. If someone is “recommending you change your insurance, it can be hard to tell if that is really the best thing for you or if he or she just wants a commission,” she says.

While it won’t recommend specific members, the association tries to make it easier for families to identify qualified managers through a voluntary certification process for members. To qualify, applicants must have at least 1,500 hours of paid experience in the past three years, pass a written exam that covers such topics as bookkeeping and tax basics, and undergo a criminal-background check.

To be safe, Ms. Allen also suggests families do background checks on their own and consult the Better Business Bureau about any potential hire. Think about what specific services the elderly client needs and conduct the appropriate due diligence accordingly, she says. Having someone ensure bills are paid on time “is a different level of access and services than someone who has signature authority for accounts.”

“If someone is really incapacitated,” she says, “the risk can be higher because you have [to hire] someone with much more access.”

Karen R. Caccavo, a daily money manager in New City, N.Y., says families or caregivers also should determine whether a candidate is bonded or has liability insurance.

Other help

Sometimes nonprofits or county agencies will offer some kind of daily-money-management services performed by vetted volunteers.

The Pima Council on Aging in Tucson, Ariz., for one, has about 25 volunteers who help older adults with bill paying. The council performs a background check on its volunteers, including fingerprints, and requires three written references, says W. Mark Clark, group president and chief executive.

Whoever is eventually hired, Ms. Allen recommends keeping tabs on their work by checking in monthly, perhaps by setting up “view only” access to bank accounts, to make sure there are no irregularities.

When your aging parents need a daily money manager

Martha Nurenberg knew her 86-year-old father, Paul, had a problem when he was almost taken in by a letter promising untold riches if he provided a bank account number and payment of legal fees for a money transfer.

Though Paul never sent any money, he did answer the letter with interest.

As dementia set in, Paul could no longer remember the password to his computer where he kept his financial records. Then Nurenberg received a call from the director of her dad's senior living facility, who said Paul had not paid his last two bills.

"We realized that he couldn't keep the financial records anymore," says Nurenberg, who runs the AARP's employee volunteer program in Washington, D.C. But neither she nor her three siblings lived anywhere near their dad's facility in Middlesex, New York. Nor did their mother, who is also suffering from dementia, know anything about the complicated records her husband kept.

So they called a professional, Jacquelyn Bell, a Rochester, New York-based CPA who wears a second hat as a daily money manager for clients such as the Nurenbergs. Instead of just filing quarterly or annual tax forms, Bell receives her clients' mail, pays their bills, balances their checkbooks and helps them keep to a budget if they are on a fixed income.

For the families of the more than 5 million Americans suffering from Alzheimer's or another form of dementia, such hands-on services can be a necessity. "Most of my clients fall into a few categories — no family or children, have children but not local, children are too busy, or elder financial abuse," says Bell.

CHOOSING AND USING THE RIGHT MANAGER

Demand for daily money management services as America ages is likely to grow significantly, but at least for now the profession is virtually unknown. The American Association of Daily Money Managers (AADMM) (www.aadmm.com/default.htm), the profession's primary trade group, has only about 700 members nationwide.

What is more, no government agency regulates daily money managers, even though they have access to clients' sensitive financial information. For this reason, properly vetting a potential manager is essential. That means asking for references from other clients, and, when possible, checking with state professional licensing boards for credentials and for such things as malpractice.

The AADMM provides certification to daily money managers and lists of credentialed members. This guarantees at least a certain level of proficiency in the field.

To avoid fraud, be sure to establish certain safeguards. Money managers should provide monthly reports of all their financial work, including copies of bills paid, if requested. Some clients create a bank account specifically for the money manager that has limited funds, just enough for the monthly bills and a small amount left over.

Meanwhile, the rest of the client's money is off limits.

EXPERTISE

Bill paying alone is usually not all that hard, but if health, long-term care or other complex issues become part of the mix, expertise may essential.

That is where someone such as Sheri Samotin may come in. Prior to founding her daily money management business, LifeBridge Solutions, in 2009, she spent some 25 years in the healthcare industry, much of it as a manager of a medical practice where she often negotiated with health insurers unwilling to pay claims. She is familiar with the complex codes hospitals and insurers use for medical procedures, including what is covered and what is not by different policies.

But if tax, estate or small-business issues are more of a concern, a CPA such as Bell would likely fit the bill.

TRUST

Also, since trust is such an important factor, ceding power to a manager all at once may not be wise. Initially, Nurenberg's father would sign all the checks Bell was writing for the bills so he had a chance to review them. As he deteriorated, Nurenberg, who had power of attorney for her parents, signed them. Now Bell, having proven herself, handles everything.

Dementia or other disabilities are not the only reasons to hire a money manager. Parents often hire managers to handle the affairs of their mentally disabled children's estates after they are gone.

Addictions are another reason. Bell has shopaholic and gambler clients whose checkbooks she keeps in her safe so they cannot get to them.

For many the service can be a matter of convenience. "While mom's very capable of paying her bills, this lets her focus on enjoying her retirement," says Mitchell Dannenberg, a Naples, Florida insurance salesman who hired Samotin to handle his mother's finances.

Costs of daily money managers vary depending on the services required and your location. Bell charges $90 an hour but says services can cost as much as $150 a hour in pricier New York City. Some clients only require an hour of service a month while others need five to six, she says.

It is not cheap by any means. But for Nurenberg, Bell is more than a financial security blanket. She is a "godsend," Nurenberg says.

Discussing wishes beforehand can ease the stress of losing loved ones

FROM ISLANDPACKET.COM

Leila Nelson and her husband had just evacuated from Hilton Head Island to Atlanta for Hurricane Floyd when they got the news that her mother had died.

Her father had died two years earlier. Now, it was the end of an era. Both parents were gone, and on top of the emotional pain, Nelson and her siblings were left with the task of going through their mother's apartment.

Nelson met her brother, who lived in Massachusetts, and her sister, who lived in Atlanta, at their mother's 1,800-square-foot apartment in Cincinnati.

They spent three or four days going through items in the home, room by room. As they went through boxes and drawers, they told stories about their parents. They learned things they never knew about their mother and father, and about each other. They laughed, and they cried.

Nelson and her sister had helped their mother move into the apartment after their father passed away. When she moved, their mother got new sofas and a new dining set. But most of the furniture was what Nelson and her siblings had in their home as children, a combination of art deco and 1970s pieces. Their bedroom set was gorgeous blonde pieces from the 1940s.

But the antique furniture wasn't what the grown children were really seeking. Aside from getting the stuff out of the apartment in a short time period so they didn't have to continue paying rent, they were looking for the real treasures -- the sentimental items that could not be thrown out.

They struck gold when one of the siblings opened a dresser drawer and found a pile of letters their parents had written back and forth to one another when their father was overseas during World War II. The letters shared their love story and offered a history lesson to the younger generations.

"It's part of a legacy of the family," Nelson said. "Some people pass along jewelry or art or whatever. This is part of the Johnson legacy."

Their parents had not allocated certain items for particular people, so it was left up to them to decide who got what. The three siblings decided that the oldest, Nelson, would get to choose what she wanted first.

She knew right away that she wanted the 1970s chair she had always loved, which was fine with her siblings, since they both hated it.

Her brother picked out a few small things. He kept a portrait of their mother that was done in New Orleans and all of their father's awards.

Nelson's sister took one art piece, the teak dining room set, their mother's china and some knickknacks.

They divided up the Christmas tree ornaments for the grandchildren.

Then there was the coveted family tree artwork. A special gift the kids gave their parents for their 50th wedding anniversary, it was a framed collage of photos that were made to look like a tree. At the bottom was a black-and-white photograph of their parents dressed in a tuxedo and ball gown. Growing up from the bottom of the tree were photos of the couple's children, leading all the way up to photos of a grandchild graduating from college.

Just like the letters, the family tree was meaningful to everyone. A professional organizer, Nelson used a trick she has suggested to families she works with who are going through a similar situation. She proposed that the three siblings rotate the artwork every few years. Her brother had it for a few years. She has had it now for a few years. And her sister will get it next. They do the same with the love letters.

Talking about death with family members is difficult, but experts agree -- the best way to avoid conflicts later is to have a frank discussion in advance.

Nelson said family members need to ascertain how much attachment people have to certain items now so they don't end up fighting about them later.

One of Nelson's clients, Marilee Smith of Portland, Ore., said the conversations she and her brother had with their parents prior to their deaths were invaluable.

"It was hard to do, but it was easier in the long run than not having a clue and feeling really lost," Smith said. "We knew what to do and what they wanted, and we were able to honor them that way. ... It was really nice to be able to have a dialogue for what was important and what wasn't."

Smith said it was clear to her and her brother that they needed to have a discussion because their parents' health began to fail. But, she said, any time is a good time to have the conversation.

She suggested starting out by saying, "I've been looking at my own stuff and putting together a will. Do you have any preferences?"

"Even if you don't get a receptive answer, you've planted the seed," she said. "I think for one thing, we all have a tendency to live in a state of denial -- like this isn't going to happen. But my parents knew. They knew they were failing. We all knew. It was like, 'We might as well bring it up.' But we had talked about it even before they got sick."

Smith said she and her brother also asked their parents what kind of funeral services they wanted to have. It can be difficult to talk about this, but it can really help.

"I think sometimes it falls on the kids to say, 'Let's hope we don't have to do this soon, but let's have this conversation,' " Smith said. "What made the process easier was being able to have those conversations with both parents before they passed."

Helena Place senior living community relations manager Rose Ewing, along with Jennifer Redmond of United Hospice of Beaufort and Dan Bennett of Lowcountry Cremation, periodically offers a "Planning Ahead & Five Wishes" seminar in the Lowcountry. The free seminar helps participants create a document that conveys what their medical, personal, emotional and spiritual wishes are. A notary is available during these classes to notarize the document, making it a legal living will.

Included in the seminar is a guide called "Five Wishes," which encourages participants to discuss their wishes with their loved ones before they get sick. Do they want their loved ones to allow them to remain in pain but coherent? Or would they prefer to be given pain medicine that may make them too drowsy to speak? What lengths do they want doctors to go to keep them alive?

Participants can be specific with their requests, such as saying they wish to have someone with them whenever possible, to have their hands held and to be talked to, to have people praying next to them or to die at home. They can even put in writing that they wish family members would make peace with each other before they die.

The document participants create from the "Five Wishes" guide must be signed and witnessed. An original copy should be kept in the home rather than in a safe deposit box.

Ewing also said she encourages the seminar participants to let their heirs know about any life insurance policies. If loved ones don't know about the policies, they won't receive benefits. Life insurance policies can change like mortgages do, so adult children should know where all of that documentation is.

"It is an awkward topic, but it is one that does need to be addressed," Ewing said. "Say you have three children yourself. One's hysterical. One wants to do everything imaginable to keep you alive, and one wants to just let you go naturally. Well, what do you want? Nobody knows unless you put it down in writing. It's a difficult topic, but it's one that we're all going to face. ... It's so much easier to do it when you're well and healthy than when you've been diagnosed with a critical illness or you're in the hospital."

Beaufort professional organizer and daily money manager Roxanne Waters Cheney said most people avoid planning for death. And when it comes to the end of life, she said there's a big gap between what people say they want to happen and what actually happens.

Cheney teaches a class through Osher Lifelong Learning Institute called "All You Need is Love and These 25 Documents."

She said wills and trusts are usually taken care of, but there's myriad other documents and details heirs will need, such as a list of bank accounts, a list of usernames and passwords, a list of insurance policies, personal family and medical histories, marriage license, divorce papers, property records, any papers related to pre-planning of funeral, any debts owed or accounts receivable, tax returns, titles to vehicles, stock certificates, savings bonds, a notification list (friends, lawyers, bankers to notify in case of death), and a DD214 for military members.

"My goal is to help them have the conversation and to take the information and put it in a format that would be easily accessible," Cheney said. "That has become an increasingly important part of my business."

Marilee Smith's parents lived on Hilton Head for more than 30 years. They died about two years ago, within seven months of each other, first her father, then her mother. He was in his 90s. She was in her 80s. They both had chronic illnesses, but she and her brother were not expecting their mother to die so soon.

"In a time that was very overwhelming, just from the basis of losing both parents at the same time and dealing with 30 years of stuff, (professional organizer Nelson) was invaluable to me," Smith said, adding that it was difficult to go through sentimental objects such as pictures.

Smith said Nelson suggested a few times that they put something away and go through it at another time when they weren't so emotional.

"My mother was the keeper of the family history so there were generations of photos and stuff that we had to go through and sort out and divvy up. It was a very emotional time. Plus, we had an eye for putting the house on the market too, so we felt like we had a time frame."

Smith had only three weeks to go through everything, and it was a large house. Her brother was working, so it was very stressful -- she had regular acupuncture to help.

There were a number of moments that stopped Smith in her tracks. Some of the things her parents saved were really touching: Plaster of Paris handprints from her and her brother when they were about 1 year old; their grandfather's college fraternity pins, and his medals and awards from World War I; their father's medals and papers from World War II; old photos and scrapbooks; their grandmother's wedding gown and some of her jewelry and watches; a lock of their mother's baby hair; everyone's baby shoes; and all the letters and cards she and her brother had ever sent their parents.

"My biggest tip would be: (Professional) support is incredibly helpful, be it Leila or somebody else, to help kind of keep focus and to take breathers and to take your time to read the birthday cards," Smith said. "You have to do some of that. It's not like going into somebody else's house and cleaning it out. It's a process of closure and remembering and saying goodbye, and that has to be honored."

Read more here: http://www.islandpacket.com/2014/11/29/3455277/discussing-wishes-beforehand-can.html#storylink=cpy