GAH! MIL changed her mind. How can we manage her finances and protect ourselves?

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2TiredMom Asked May 2013

GAH! MIL changed her mind. How can we manage her finances and protect ourselves?

Just when I thought I could have some piece of mind. I have posted before.... MIL has not been successfully managing her finances and was looking to us for help. When she resisted letting us know what her cash flow was, we withdrew our help. That was last fall. Now she is behind again, has unpaid tax bills and turned to us again. Again I expressed that if she needed continuous help, we needed to be more involved. I finally came up with a plan that she accepted. We would create a separate account for bill paying, which we would manage. Her SSI check would get divided between the two accounts; we had worked out the amounts so that she would have money in her original account for just groceries, incidentals and cash; this account we would let her manage. The rest of the funds would go into the bill paying account. She seemed to be comfortable with the amount that would be left under her control; the amount going into the bill paying account would not quite cover everything, but the amount we would end up supplementing was more comfortable for us. When I went to the bank to ask how to go about setting this up, they said we would first need to obtain power of attorney to do this. Yesterday she was ok with this. Today she called a legal resource who advised her not to sign the POA - that it was something done when someone was determined to be incompetent. So she's changed her mind. Yet she seems to like not having to manage the bills.She wants to just write us a check each month - the same amount that would have gone into the bill paying account. We would deposit into one of our own accounts and we would pay bills from there. So at least she is accepting of some financial management help. But I am worried that this arrangement, in the absense of POA, would also leave us vulnerable. My husband only has one sibling who has not been directly involved as much. Would we end up getting accused of taking her money? Should I have MIL sign some kind of agreement/contract stating she is giving us this stated amount each month, of her own free will, for us to manage her bills? Any advice would be appreciated.

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score 0 · Answer 1

Be aware that if you set up an online account and for some reason get locked out ( new bank takes over and changes website for example) and the older person cannot remember their security questions, the only way you will be able to get back in is to give the bank a POA.
Another option is the be representative payee ( SS or SSI) and this is the web page:https://www.ssa.gov/payee/faqrep.htm

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score 0 · Answer 2

'IsntEasy' - He's a real estate appraiser and the fees to belong to various orgs and the E&O insurance are what outweigh his income. I agree that he won't know what to do with himself unless he works. My MIL is very controlling and he has no hobbies. Maybe he has to work or else she'd drive him crazy (although he is an excellent husband to her). Its not my kids, its my FIL's kids (as in my hubby and bro/sis-in-law) who bail their parents out a few times a year. It is coming to a head, that's for sure, which is why I appreciate reading the questions and answers here.

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score 0 · Answer 3

'tikihit' – I'm just curious...what line of work is your FIL in that he has expenses greater than income??
I bailed my parent out more than once until I finally realized that I was just enabling a bad situation. Chances are your FIL isn't getting a sense of self worth out of "working". It's just that he doesn't know what else to do with himself. That's not uncommon for elderly men.
If your kids are shelling out thousands of dollars a year, they are either very well off for young adults or they are sacrificing some of their own future financial security to indulge their grandparents' reluctance to reign in their wastefulness.
Sounds like dementia. A rational business man (as I assume your FIL once was) would see that he's throwing away his money and would not want to be bailed out by his grandchildren.
We had to have a 'day of reckoning' with my Dad to get him to turn over control of his finances. He did so reluctantly, but after a few months wanted nothing to do with bill paying and bank statements. He doesn't even open his mail now. He leaves it in a pile for me. I think it's been a real relief for him to not have to worry about it because it confounded him. I've found that to be the case with virtually every person I know who had to battle with their parent over finances.

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score 0 · Answer 4

These forums are so helpful.

I'm not quite to the same point y'all are but 2 of the 4 kids (other 2 have no extra $$) have to bail my in-laws out of trouble a couple times a year to the tune of $4k or so. Mostly because my 80'yr old FIL refuses to stop 'working' altho his income doesn't come close to matching his business expenses and when we tried to help them budget we discovered they had hid various expenses from us. Further offers to help budget are met with resistance.

We don't want to force FIL to stop 'working' for fear he will lose his vibrancy.

My MIL spends hundreds of dollars on unproven herbal and homeo'pathetic' supplements.

Right now, we figure it is a small price to pay for my FIL feeling like he contributes to society.

I read your questions and answers knowing that these situations are coming our way at some point. Thank you for your honesty, people!

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score 1 · Answer 5

I think it's a really good idea to keep her informed, being "in the know" might make her feel "in charge" (even though of course she isn't actually DOING anything). My Grandmother was similar (Aunt who took over bill-paying is 40-yr accountant who regularly works with million-dollar-month payroll -- STILL took convincing! Sheesh!). We did find that she soon lost interest in following the bills once she hadn't had to worry about them for a bit, so maybe once your Mom can see that everything is being taken care of she'll be glad to let it just happen on it's own (ie you taking care of everything LOL). At least you got the will done -- we kept hearing "I'll be dead anyhow, so it doesn't matter to me!" ARGH! Finally found a great semi-retired Estate attorney in a rural area who had figured out that the easiest way to get people do do trusts is to have a flat rate (Big estate, small estate, family gets along/doesn't get along -- doesn't matter. $495. ). That was my Christmas present to my parents one year, & when my Gma found out how inexpensive it was she got one to! Hoorah! Problem solved!. That cascaded (with some pressure from my aunt) into DPOA, co-signed accounts, & FINALLY we got everything in order. It definately helped that my Aunt, Uncle & Mom were all on board, working together, & only concerned about Gma's care - they are all OK if every dime of her money is spent on her care, as long as it isn't being wasted.

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score 1 · Answer 6

Another update. First, again thanks to all for your replies, suggestions, and insight. I think I have gone through the most stressful week in my life and this forum definitely helped me through it.
good news. Went over to MIL's today, and she actually had all the envelopes of her bills all organized for me. She basically said, however you want to handle these, I won't interfere. She did indicate the key ones that she doesn't want to be late on, even if I have to play the game of "catch up" on some of the other ones. So it was a good afternoon, I was able to get everything organized and the game plan set up. Her SSI check doesn't get deposited til the end of next week, but after this afternoon I don't anticipate any resistance when it comes time for her to write out the check that will get deposited into the separate account we've set up for paying the bills. I also told her I would keep her posted on the status of things, so she won't be left in the dark, and she will know the general state of her affairs. She actually seemed to be a bit relieved.
What I am hoping for now, is that this will ease the way for a future conversation about a DPOA, to try to gain her understanding of establishing this before her mental/physical situation worsens. Good point from horserider that we should point out that this is something she can change her mind about while she is still competent. She does have her will all set, so that's taken care of.
One step at a time.......

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score 0 · Answer 7

Patathome01 -- since you are looking at 2 years of spend-down have you considered having your mother "pay" you for some of the things you will be doing for her over the next two years (reasonable rates only!) so that you can put some of that money into an account (NOT in her name) for her after-medicare-kicks-in extras? I think you may have to have a talk with your Mom in a few months about the situation to figure out what things you CAN spend on that she can keep without worrying about claw-back from Medicare. Good bed (the ones with pulsing air that prevent bedsores!), good shoes, etc. might be on the list since Medicare can hardly call those extravagent.

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score 0 · Answer 8

"that might not stick"...ie she might not believe the "real" lawyer -- better chance if SHE chooses the lawyer via recommendation of a friend or whatever.

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score 0 · Answer 9

Wonder if what she heard was what was actually said. Agree with former poster that suggested a REAL lawyer, though that might not stick. The suggestion about WRITTEN CHECKS put into the account sounds like a really good one.
I don't think your Mom's judgement is good anymore, & that makes me think that the lawyer stuff (DPOA, trust, will, etc.) needs to be in place sooner rather than later. She CAN back out of POA while she is still competant, so maybe the knowledge that she can back out will get her to sign (and then you hope for apathy of her never getting around to changing it).
Best of luck!

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score 3 · Answer 10

PatatHome01
You have my support. My mother is also very self centered (narcissistic) and independent. At 101 she still manages her finances, and does a good job. I have POA (Canadian so durable and both medical and financial). We do not have Medicare and Medicaid as in the US, but I do foresee some battles in the future, unless she passes while still having the capabilities/resources she has now. I have suggested that she put me on her accounts so I can "keep an eye on things". as she has been thinking people are "stealing" from her. She has some paranoia, though does not have dementia, but has BPD. She is 5 hrs drive away so I will try to set up online banking. At some time she may accuse me of interfering with her accounts/finances and I will deal with that if it comes. Even two years ago she would not have accepted this suggestion, but, although pretty healthy, she is not as strong as she was 2 years ago and knows it. I have said that this is just in case she needs the help. Should she come towards the end of her financial resources, or needs nursing care, it will be a battle, I know, as she would have to move out of her ALF (where she gets maximum care available now) into a nursing home -something she dreads. She has already said that if her money runs out she expects my sister and myself to supply the difference. It is not going to happen. I am retired too, and although fine financially, cannot afford to support someone else. It is difficult I know. Take one step at a time, go over one hurdle at a time. I have decided that I cannot afford to worry too much about what may come for her or for me, but just make sound decisions for today, keeping the future in mind but not worrying about it. Mother always gets mad about something, but I can't let that drive my decisions, so I have detached emotionally. Do what you think is right and if she gets mad, so be it.

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score 1 · Answer 11

2TiredMom -well done. So many are very stubborn over this issue. I think you are doing the right thing. Certainly you are not awful. Sometimes we have to draw a line in the sand and abide by it, and you have and are prepared to stick with it. She is very fortunate that you are willing to pay some of her bills and help her. Good luck and let us know how it turns out. (((((((hugs))))))

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score 2 · Answer 12

2TiredMom - Congratulations on coming up with your own solution which is comfortable for all concerned! And if she reneges, you can cross that bridge when or if it presents itself. Never burn your bridges and never say never. Best wishes.

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score 0 · Answer 13

My mother has a checking account at one bank and a CD at another bank, and both places have my signature on file under durable POA. My mother can make some financial decisions. Right now, she is in a rehab place in CA but will soon be placed in a board-and-care arrangement for safety concerns. She will have to pay for all the care by herself unless Medicare covers anything for medical purposes only. Here is the catch, Mom thinks that her social security will pay for all of her care, but in reality, it will not cover the full cost required by the board-and-care home. The difference will about $1,000.00 that will have to come out of Mom's cash in the banks. The family and I estimated that her money will last about two years. The problem is, when Mom is informed that she will have to spend down her money and the beloved CD is closed to accomplish the spenddown for Medicaid insurance, she will be furious for me to do it. You see, she is a self-centered personality and thinks that she is always right and that everone, including myself, should but-out! I have a very supportive family who lives out-of-state whom I can contact for further advice. My position as POA is that Mom's money is no one's business, and she can still sign her checks but can not get over to her banks to get currency herself. I can see that the battles will probably continue for a long time, but her bills will have to be paid without exceptions until she cannot afford them, becoming eligible for Medicaid. Your support on this situation? Thank you.

PatatHome01

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score 3 · Answer 14

wow. I truly appreciate all your responses to my situation. Update. After MIL refused POA, she was still willing to accept the concept of a separate account to pay the bills, with the remainder of her SSI check remaining in her current account, which she could spend as she liked without our oversight. (She just has the checking account). Since this was acceptable to her, we went ahead and set up a separate account - in our names only, hers was not on the account. We wrote up a letter of agreement, which specified that once the SSI check was deposited, she would write us a check of a specific amount, which would be deposited into this new account. This would cover the majority of her bills, not all, but the amount we would have to supplement was comfortable and manageable for us. Her check would be deposited in this account, which we would be responsible for managing. We wrote up a formal letter of agreement, which we explained to her, and also insisted that she signed in the witness of a notary public. Both to enforce the formality of the agreement, and to protect us, in the absence of having DPOA or POA. Our immediate focus is paying her bills but also protecting our own needs - as long as she needs help from us, her budget is part of our budget. Its not the best plan, but we are trying to wrest control from a stubborn person. When it comes time for her to write the first check to us, and to accept we are dealing with the bills.... if she reneges, I am completely prepared to say you are on your own. Sorry, that's the way it is, and I am not willing to repair any of the damage you have done in the mean time. Go fish. Stubborn is as Stubborn does. I hope you don't think I am awful. But I am absolutely not going to sacrifice being able to help my daughter finish her college education - just one more year left - because of this situation. Sorry need to vent.

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score 4 · Answer 15

When it comes to money, CYA ( a term we use in nursing and one which I will share-cover your As_! Why doesn't she just put everything on auto bill pay if she is competent enough to write you a check to pay for things, let her pay the bills. You do not say if she has memory deficits so it is hard to comment farther, but I am telling you now, you will save yourself a lot of headache if you decline her offer about the money. If she is calling a "legal resource", she already has doubts about you handling HER money. Let her credit be ruined, not yours. Unless you have a POA, can document all expenses, etc. you are really leaving yourself open for her accusations of stealing her funds. Wait until such time as she trusts you and your husband to handle her finances.

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score 3 · Answer 16

Your MIL got terrible advice. Was her "legal resource" a friend whose son is in law school? POA CANNOT be given by someone who is incompetent. If it is not taken care of before then, then a guardianship or conservatorship is the only way to act for the person.

"Mom, we'll help you if one of us has DPOA and if you agree to the two bank accounts we talked about. Otherwise you are on you own. You are free to decide. We will respect your decision either way. But we have made our decision. No POA, no further involvement by us in your finances. To make sure we do things right. we are willing for the 3 of us to go to an attorney specializing in elder law."

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score 2 · Answer 17

You should really sit down with an elder law attorney. The money you would invest in the appointment would be more than worth it in the mistakes you'd avoid. I've been managing my father's finances with only so-so help from him. Online banking has been a godsend. Personally, I'd ignore her objections to it. You need to take the upper hand in this situation. I had to pull out all the stops to convince my father to let me clean up his financial mess. I literally told him I would be done with him forever if he didn't at least let me pay the bills. Getting his debit card away from him has been tougher!
If your MIL has both a savings and checking account at the bank, you could go online and transfer her spending money to savings and instruct her to only use her debit card on that account (if she complies, my dad often doesn't!). You can pay her bills from checking. This way, the deposit slips will provide a paper trail for the support you're giving her each month (I'd deposit your own personal check for additional documentation).
Be sure to set the "overdraft protection" on her account so that she cannot withdraw money from an empty account. Choose the option carefully. Read the definitions. During the 'wild west' years of deregulated banking, they started calling the options exactly what they weren't! My dad was tallying up $12 fees to withdraw $20 from an empty account because it had "overdraft protection"!

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score 4 · Answer 18

Power of Attorney helps a person while they are competent and ceases after the person is deemed incompetent. A durable poa is one in which power to act on person's behalf does not cease when person becomes incompetent. Not sure where she got her 'legal advice." I would get a durable power of attorney that covers medical and financial while competent and when incompetent. Online banking is the best answer, she has a complete record of where her bills are going and make sure her social security is direct deposited into her account while she is competent to make this decision, you don't need checks to be signed when someone can't or can't get to the bank. The lady's son needs to take his mother to a lawyer and get this taken care of now, plus a will, no one should die intestate.

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score 3 · Answer 19

I went through this with my dad. He too refused to pay bills, but would go to the bank and withdraw $500 at a time without telling me. I was on the account, so I could write checks, etc but didnt have POA or guardianship. When he quit driving about a year ago it made it easier since he was no longer withdrawing money. One mistake I did make though was not pushing the POA. He did not have enough to cover monthly expenses, so I started paying many bills out of my pocket to help out. Creditors were calling, and I could not even talk to them without it. They would say have him say it's ok while we can hear him, and sometimes he would just shake his head and say no, I dont feel like it. If I had it to do again, I would not have paid all his bills for so long.

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score 4 · Answer 20

If you & your MIL really want two bank accounts - one to pay her bills from, and one to pay her other personal expenses from - set up both bank accounts in HER name, with HER social security # only. She can have you (and anyone else she wants) as a signor on the account, along with herself - you both just have to sign the signature card for the account. That way, you can sign checks on the account. This would be the easiest and quickest way to accomplish what you are trying to do, for the immediate SHORT term. (I became a signor on my parent's bank accounts about 4 years ago.)
However, this does not address the critical need for a POA as mentioned by others in this thread. It MUST be done while she is still considered to be of sound mind, as the medically-declared incompetent person cannot sign legal documents.
POA is NOT just for the incompetent - it allows the person you designate, to act on your behalf in any or all situations. You can put restrictions on it, if you want. Look online for sample forms.
Sounds like your issue is more that of convincing MIL of this necessity.
Good luck to you.

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score 7 · Answer 21

Sorry to be blunt, but she has to S***t, or get off the pot. Sometimes you have to have a bright line that you tell your elder you are not willing to cross, both for their welfare and yours. If she wants your help, it has to be on your terms, because you have bailed her out at your peril and are not going down that road. If she wants to do this on her own, let her get help from the person who told her not to give you POA; they obviously know so much more than you do and clearly has her best interests at heart. I love my mother, but if she EVER tried this with me, I would walk away in a heartbeat and let her see how far she got on her own.

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score 2 · Answer 22

The incompetent thing comes into play in the case of GUARDIANSHIP not Power of Attorney. I went to court to get guardianship over my mother when she started displaying problems. I was accused of stealing her money, but things were taken care of. Some bills hadn't been pain for more than 6 months, and she received a tax bill for $16k, so mother was livid with everybody.
Please go back and ask again about the POA.

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score 0 · Answer 23

We had previously tried doing the billing together, but she hated me seeing where every dollar went. And she is absolutely opposed to online stuff, she doesn't trust it.....

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score 0 · Answer 24

San should be SSN

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score 4 · Answer 25

Why can't you just set up her account on "online banking"? I did this with my mom. We set up her income checks for auto deposit. We set up important bills like health insurance, electric and gas, telephone, as auto pay. This way we could manage those. She still could go to bank, she had full control and still got her bank statements in the mail, she was still in control. We can monitor because we have her password. She doesn't have computer so she regularly gores to bank. In this way we aren't liable and legally she has total control of her bank. We have POA if she were ever declared incompetent.

Try setting up her account online, you can do this with her San and checking acct number at most banks. This should take care of it and satisfy both of your needs.
Parents can get very distrustful even of their own children as they age. They hear and read the same stories we do about children stealing or unscrupulous acct mgt so even us honest ones bear the brunt of this distrust. I understand as I wouldn't easily relinquish my accts either.

Hope this idea helps. Works for me.

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score 3 · Answer 26

Not only could that amount leave you vulnerable, it could leave *her* vulnerable. And maybe that would hep your position in a discussion with her. (Or not, heaven knows that any discussion about future medicaid fell on deaf ears when it came to my mother.) Those checks, written to you, will be viewed as gifted money if she reaches a point where she needs to apply for medicaid. The department in your state who is responsible for determining medicaid eligibility can look back five years at the activity in her checking account and ask questions. I'm not sure whether having an agreement (and keeping the bills, of course, to prove where those funds were going) would be enough proof for them or not. She could end up in a situation where she needs nursing home care and there is no money to pay for it, and the medicaid application is denied unless you "pay back the gifts" given by MIL which are long gone to bill paying, so it's a serious concern, unless she has large sums of money for private pay skilled nursing.

I know that an estate attorney could answer what kind of documentation about the transferred funds would be sufficient for eventual medicaid purposes. Maybe someone else who has been through something similar in your state has already gotten that kind of advice will chime in so you don't have to pay the hefty legal fee for the advice.

I'm sorry to hear that she got such bad advice about the POA. Does she understand that there are lots of things that you won't be able to do for her if she does become incompetent without one? Once she is incompetent, she can't sign a POA because incompetent people aren't supposed to go signing legal documents. If they could, you wouldn't need POAs in the first place.

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GAH! MIL changed her mind. How can we manage her finances and protect ourselves?

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