Managing Mom’s Money

28 January 2013 · 20 comments

My mother is sixty-four. She’s struggled with mental illness for over a decade. About eighteen months ago, my family came to the tough conclusion that Mom needs constant care. Though she’s still relatively young, we found help for her at a nearby assisted-living facility.

Mom is doing better now that she has round-the-clock professional care. In the meantime, her three boys have been watching the homefront. We each have our own responsibilities.

Every month, for instance, I pay Mom’s bills. You’d be surprised at how much it costs to keep a house, even when nobody’s living in it. It costs $250 every month for electricity, maintenance, and more. Plus, it costs $4118 per month for the assisted-living facility and there are a host of medical expenses (even after health insurance).

It’s not the big expenses that worry me, though — it’s the little things that have a tendency to slip through the cracks.

When I took over Mom’s finances eighteen months ago, I found a number of odd recurring charges, both to her credit cards and her checking account. When I began calling the phone numbers listed on the statements, I discovered that most of these charges were different types of credit and life insurance.

I was able to cancel a couple of these charges by phone, but most required more effort and more detective work. In other words, they needed more time. Because time is scarce in my life, I put off the problem until the next month. And the next. And the next. Eventually, a year slipped by, during which time I continued to diligently pay these miscellaneous fees.

Finally, last Tuesday I took action. I spent an entire morning calling around in an attempt to cancel these charges. I didn’t have much luck.

While companies make it easy to obtain services, it’s much more difficult to quit. I’m certain they didn’t ask Mom for any sort of ID verification when she signed up, but in order for me to cancel, it’s not enough that I know her name, address, birthday, and Social Security number. It’s not enough that I have Power of Attorney. In order for me to cancel, they need me to sign forms, to fax copies of the Power of Attorney, or to have my mother herself grant approval. So, my work isn’t finished yet.

I also discovered that Mom has six different life insurance policies through two different companies. “I wonder why she has so many policies,” I said to my brother. “She doesn’t even need one — nobody relies on her income, so there’s no need for her to have it.”

“You have to be careful,” my brother said. He’s been getting Mom’s mail. “I’ve noticed that sometimes these places send what look like bills, but if you send in payment, you’re actually signing up for yet another insurance policy. It almost fooled me once. There’s no way Mom would have caught it. No wonder she has six different life insurance policies.”

Together, these life insurance policies are costing Mom nearly $1500 per year. And for what? We’re not sure. We can’t find any sort of documentation, so we don’t know what her coverage is.

After spending a few hours digging into her accounts, I was able to track down about $2500 of wasted annual expenses. No, that’s not a fortune, but it’s enough to pay half of one month’s rent at her assisted-living facility.

Mom doesn’t have a lot in savings. She only has about $25,000 total to her name. Because she’s the president and majority owner of the family business, she receives an income every month, which — coincidentally — comes to about $4000 after taxes. That’s enough to pay for her room and board.

The bottom line is that Mom isn’t even treading water financially. She’s losing a little bit every month. Her meager savings are being eroded by a variety of unnecessary small recurring expenses.

My experience has made me much more aware of the difficulties older people face when it comes to money. My mother believed she was doing the right thing when she signed up for an $8/month credit protection service through her credit card, but it never occurred to her that the $96/year was largely wasted. If she’d asked me, or if I’d talked with her, I could have explained that there are other, free ways to monitor her credit.

If you have aging parents, take the time to talk with them about money. Ask if they need help with their finances, if there are any questions you can answer. Volunteer to go through their credit card and bank account statements, searching for unusual charges and suspicious activity. Pull their credit reports to be sure everything’s as it should be.

1 PawPrint53 January 28, 2013 at 08:12

While I totally agree with this, it’s easier said than done. As an adult, your parents can do whatever they want with their money, and many don’t want their children messing around in their financial affairs. It wasn’t until my father didn’t feel up to paying bills, etc. that I took the financial reins and discovered the same kinds of charges that you discovered plus that he wasn’t paying some bills. When the scary letter from the IRS came, well, that was interesting trying to get that snafu rectified. I’d tried to talk to him about finances earlier, but he was convinced that he was doing just fine. What would you have done if you’d talked to her, but she didn’t listen to your explanations? What if your parents think they don’t need your financial help? Where is that point where children should step in legally to stop people who prey on the elderly and how do they do that?

2 Betsy22 January 28, 2013 at 08:45

Good for you (and your brothers) for helping out your mom — I know from family experience that elder care can often be soooo hard, with extremely challenging logistics in addition to the emotional issues. My thoughts are with you and your family.

3 William Cowie January 28, 2013 at 09:50

You’re right – there are so many small print things that need to be taken care of. Question for you, though: for life insurance (or any insurance for that matter) I thought if you simply canceled the payments the policies lapsed. For relatively small policies it doesn’t pay the insurer to spend money (time) to get them reinstated. Is that true, or am I missing something?

4 Brent Pittman January 28, 2013 at 10:01

Thanks for sharing this personal and tough subject. I’m sure many of us will end up taking over our parent’s finances at some point.

5 Tyler Karaszewski January 28, 2013 at 10:51

When my wife got sick, we had to hire a nanny to help watch our daughter, as she was no longer able to be an effective mom. We had never considered this as a possible expense, because we had always structured our finances around me going to work and my wife staying home. All of a sudden, our expenses shot up by about $20,000/year. I had to cut and cancel pretty much everything that wasn’t strictly necessary just to keep us in the black every month.

Since last Friday, my wife has been home on hospice care. I didn’t realize how hard this would be. I think the only realistic solution is for me to take time off work to care for her. Luckily, the state of California provides for three months of family medical leave in which I can continue to receive 60% of my pay (and my health insurance). But since I have already cut my expenses to the limit, this means I will be bleeding several thousand dollars a month with the 40% salary reduction.

Our biggest expense is the mortgage, and I’d like to move into a smaller place, but I can’t really sell a house with a hospice patient living in it, and I can’t really move my wife or any of her things with her in her current condition, anyway. I may sell my wife’s car (it’s only one year old) but I know she’d feel awful if I did, so hopefully I can keep it while she’s here, and if I need the money later, I can sell it then.

I have life insurance for myself, but not for my wife, because we figured we wouldn’t need it, as “nobody relies on her income”.

6 Kristen Wallway January 29, 2013 at 12:48

My heart goes out to you, Tyler. I am at a loss for words other than that.

7 Tracy January 29, 2013 at 12:57

I wish your wife and your family comfort and peace, Tyler.

8 chacha1 January 29, 2013 at 14:00

Tyler, I was wondering how you are doing. So sorry you and your wife are going through this. I hope you have family and friends nearby who can help you.

A thought for others: My husband and I each have a $100K term life insurance policy, even though each of us could pay our rent on our own, and even though we have no kids. It’s a form of security against all the things that hit you when you lose a partner, and that you have to cope with that your partner used to, even things like relocation (easier for us renters).

9 Kristin S January 30, 2013 at 09:04

Tyler my heart goes out to you, but this does remind me that both my husband and I need to get life insurance if only to pay the bills if something happens to both of us

10 mary w January 28, 2013 at 12:36

If you have other things you need to cancel/change try calling up and pretending to be your mother. (Or have Kim do it.) I did that with some issues for my father. As a middle-age woman I don’t think I sound like an 80-year old man but no one questioned me.

This won’t work with a bank or anything else that really needs a signature but for minor things (cable co, credit ins, etc) it should.

11 Del January 28, 2013 at 13:25

Tyler, I’m absolutely speechless. My heart goes out to you. Your story reminds me that I NEED to get life insurance. My husband has it for the same reasons you stated…but this is a wake up call.

12 Elaine January 28, 2013 at 21:40

Thank you for posting this story. I just wanted to let you know that you’re not alone- right now I’m dealing with a similar situation. My father is 64 and I believe he’s been suffering from mental illness for the past few years. At this point my sister and I are working on getting him a proper diagnosis and appropriate medical care. We think he needs to be in assisted living but he doesn’t think anything is wrong. Very tough.

Recently he signed over financial power of attorney to me. I haven’t been able to look through all of his finances yet, but the small portion I’ve seen is so sad. He’s made so many bad decisions and he bought a lot of things he can’t afford because he was talked into it. He’s also gotten himself involved with people that are living off of him. We have a long road ahead of us to take care of this mess: legally, financially, and medically. It makes me so angry that people out there are taking advantage of the elderly. I wish I could have been able to prevent this. Thinking about you and your family.

13 Joe January 29, 2013 at 09:14

Can’t you just stop paying the life insurance? I thought they’ll just cancel the policy if you stop paying. My mom is also 64 and she needs a little help too. It’s just a few things right now, but I’m sure she’ll need more help as she age. She is staying with us for a while to see if it will work out. She helps so much with our kid too. We’re trying to see if she can move into a condo nearby at some point.

14 Sandy January 29, 2013 at 12:25

This is so unbelievably common…I’ve been reading through the comments. I work for financial advisors (I wanted to learn how to manage my money and how better than have good advisors teach you!) and our clients come in with their parent’s accounts and over and over and over again we see that corporations/people just prey on the elderly. The elderly refer to them as “their friends” or say oh, “they” would never take advantage of them, or “they” are such nice people I couldn’t say no. Meanwhile, literally, they are being led down the path of financial ruin.

It is so very sad. It is nothing short of elder abuse by these companies. And it is so difficult for the families because Mom and Dad still get to make decisions because they are competent in the eyes of the law. It’s very difficult to help them until a family member can break thru to them that they are being taken advantage of.

15 Tracy January 29, 2013 at 12:54

I can sympathize with how long it takes to handle some of the these seemingly minor expenses before they add up. One suggestion is to also contact her credit card companies – I had a bill charged to my card every month continue after I canceled the service and moved. Amex took it off my card and have been working with the merchant to refund my portion of the money. Perhaps your mom’s cards can have a hold on them for no new charges?

16 stellamarina January 31, 2013 at 22:17

I remember when you wrote about your mom on the other blog. The lesson I took away from it was to watch my mothers check book as a way of checking up on her ability to keep finances straight. I told my daughter to do the same to me as I get older.

I think some elderly people start to hedge their bets before death. They start giving to charity to help them get through St Peters gate into heaven. :0) It is good to keep an eye on charity donations of the aged parent. I know it is their money to do what they want with but it can get out of hand.

An elderly aunt, who I would consider very bright and alert, had problems with Readers Digest books. I guess she had bought a book and somehow they kept sending her more that she had not asked for but may have signed ok on without knowing. When the books arrived she just felt like she was obliged to pay for them. I told her to just send them back and not pay anything….they will soon get the message.

17 first step February 6, 2013 at 17:53

One of the easiest ways to get rid of the recurring charges on credit cards is to “lose” the card and get a new account number, unless the charges are generated by a subsidiary of the credit card company. If your mother doesn’t need the cards, just cancel them altogether.

Another way to get around some companies wanting to speak to your mother is to use online chat. I used chat to resolve some incorrect interest charges on my father’s AMEX card, and it was much easier.

I pay my father’s bills for him, and making necessary changes can be difficult. I’ve set up a separate email account for his bills, and it helps me to keep everything straight. Good luck with canceling the charges.

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