Life has changed dramatically from where we were just a few weeks ago to where we are today. Everything has changed, from the way we work, to the way our children learn; from the way we shop for groceries to the way we communicate with each other. Even the way we care for our loved ones has changed.
As a Daily Money Manager (DMM), I work closely -- but not too closely -- with seniors and their adult children to ensure that they stay on top of their daily financial tasks and obligations. This could be anything from opening and sorting mail to troubleshooting bills, to more complicated tasks that involve coordinating with legal, tax and financial professionals.
But, in this age of COVID-19, I and many others are faced with a new question: How does one provide these services and be empathetic from a distance? You might be wondering the same if social distancing requirements are preventing you from getting close to your parents to help them with financial tasks.
As we’ve all been adjusting to this new reality, it becomes ever more incumbent upon us, the adult children and members of the “sandwich generation,” to learn a new way to act as the financial caregivers to our parents while supporting our own families and households. These tips will help ensure that you can continue to help your parents at a time when you are forced to keep your distance.
Set up regular check-in calls
Checking in with your parents on a regular basis will help you maintain a connection with them at a time when they might feel isolated, and help them stay on top of financial tasks when they might be feeling overwhelmed. The challenge, though, is checking in when you have to keep your distance.
Video conferencing is an excellent way to check in with your parents to “see” how they are feeling, if they are comfortable or if they need anything. There are a variety of free options for video chats, including the free mobile app WhatsApp, Facebook Messenger and the FaceTime feature on mobile phones.
You could use daily or weekly video calls to help your parents sort through the mail to separate solicitations from the bills that need to be paid. This can be time consuming, but it’s an important step in helping your parents stay on top of their finances. It also keeps them engaged and helps exercise the brain. Alternatively, you could have your parents’ mail forwarded to you.
Help your parents monitor accounts and pay bills
Many of our parents still write checks and mail their bills. Get your parents on automatic bill-pay for the utilities, credit cards and any other providers who bill at regular intervals. Where some providers aren't offering an auto pay option, you may be able to schedule bills to automatically be drafted directly from your parents’ checking account.
Although not as prevalent today, some of our parents still keep deposit accounts at multiple banks. They might have multiple permanent life insurance policies (that they don’t even remember taking out) or several brokerage accounts. Everyone's life will be easier and less stressful if some of those accounts are consolidated.
Consolidating a brokerage account is fairly straightforward, and requires a signature on an ACAT (Account Transfer) form that can be obtained from your parents’ financial advisor. If it’s not feasible to consolidate accounts, at least maintain a list of all of the accounts and account numbers and store all documents related to those accounts in one location. This will make it easier to stay on top of everything.
Get permission to handle financial transactions for your parents
You might want to start discussing having your parents name you their power of attorney (POA) so you can legally make financial transactions and decisions for them. This can be a difficult conversation because Mom and Dad might feel as if they are giving up control. So approach the conversation very gently.
The POA could be limited, meaning that the language in the power will be very specific, limiting it to specific items. This may be a good way to break your parents into the idea of letting you handle some of their financial transactions.
Then, as you build trust, talk to your parents about the benefits of having a general power of attorney that would allow you to handle all financial transactions in case they no longer were able to on their own. Some families prefer not to share financial information with each other. In these situations, some DMM’s will act as agents for your parents, should they still want to maintain their privacy, which can also be beneficial to them in maintaining their dignity.
You're also going to want this authority to go into effect immediately rather than down the road. In legal terms, this means to look for a "durable" rather than a “springing” POA. If there is an emergency that requires a signature, you're going to need that POA to be immediately executable so you can act on behalf of your loved one.
Most elder care attorneys will agree that the POA is the most important document to have. I work with an elder care attorney who is open for business and practicing appropriate social and physical distancing by offering drive-by document signing because of the importance of getting these documents signed and filed expeditiously.
Without power of attorney, your hands might be tied when it comes to helping your parents with their finances. I worked with a client who was incapacitated and needed to apply for Medicaid. The application required a five-year history of bank statements, but the bank account couldn’t be accessed because there was no power of attorney. So no one could apply for Medicaid on behalf of my client.
It may be helpful to speak with a trusted professional who can help you navigate the process in a practical manner. It is very important to be proactive rather than reactive. The longer you wait, the fewer options you will have. Don’t allow yourself to be forced into a less than desirable situation.
For additional reading on the topic of POA, you can check out Carefull’s “Ultimate Guide to Financial Power of Attorney”
Protect parents from stimulus check scams
Your parents likely have heard that the federal government is issuing stimulus checks -- officially called economic impact payments -- to help Americans cope with the financial impact of the coronavirus. However, your parents might not realize that scammers have created stimulus check schemes to take advantage of people.
According to a recent New York Times article, fraudsters "are bombarding Americans with emails and phone calls that use the uncertainty around the virus to distribute malware and get people to divulge their bank information and other data, which can then be used to defraud the same people."
The article also notes that over the last month, "4,305 malicious website domains were set up to take advantage of people looking for new forms of government support, according to the security firm Check Point. The fake sites, with names like whereismystimulus and 2020reliefprogram, generally ask people to input their personal data with the promise that they can get information about their checks."
Let your parents know that they don’t have to take any action to receive their stimulus payment. According to the IRS, even retirees who don’t normally file a tax return will receive payments automatically. So if they get a call or email telling them they need to do something to get their payment, it’s a scam.
A few other practical tips to give your parents when it comes to protecting themselves from possible scams:
- You may need to train your parents not to answer the phone unless they absolutely know who is calling.
- If they do answer the phone, tell them not to provide any personal information to callers.
- Warn your parents not to answer the call using the word “yes” because their voice may be recorded and then used for voice verification.
- Tell them not to respond to any calls telling them they are ‘overpaying for their electric service’ or any offers to lower their electric bills.
- Make sure they know not to open emails from unknown senders, not to click on links and not to reply with personal information.
Help your parents negotiate with lenders or service providers
If your parents have fallen behind on bills, don't fret. Call the provider and mention that you are calling on behalf of your parents. The provider will ask if your parents are available to authorize speaking on their behalf. If your parents cannot, explain why you are calling on their behalf. Mention that we’re all adjusting to this new reality, etc. Most providers will work with you.
Make sure your parents stay on top of their taxes
Many seniors who are on a fixed income will opt to make quarterly estimated tax payments to make the tax bill more financially manageable. As a Daily Money Manager, my client engagement includes ensuring that tax documents are handled and submitted in a timely manner.
Due to the current Coronavirus pandemic, the IRS has extended the deadline to file and pay federal income taxes to July 15, 2020, which is making it easier for all of us to regroup and refocus. This relief also applies to federal estimated tax payments. The first quarter estimated payment that normally would be due April 15 must now be paid by July 15. However, check with the tax agency in the state where your parent lives to see if its tax-filing deadlines have been extended.
Get help from a professional
Financial caregiving requires a tremendous amount of time, effort and patience. Joseph Coughlin, director of MIT’s AgeLab, has said, “Many people think caregiving is mostly a physical act … But it's also very emotional. It is financial. It is logistics, transportation, getting the appliances fixed and groceries delivered.” Take advantage of the resources that are available to you to help you juggle all of these responsibilities.
Daily Money Managers are the professionals who facilitate the necessary daily financial activities. Most DMM’s charge for their services based on an hourly rate, which can range from $100 to $250 per hour, depending upon the services they provide and you may require. To put it into perspective, lawyers, accountants and geriatric care managers typically charge anywhere between $400 and $600 per hour. If you’re paying under $200 an hour to get the peace of mind in knowing that your parents are properly protected, you’re getting a very good deal.