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Checking Account Balance Question
Old 12-23-2010, 07:35 AM   #1
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Checking Account Balance Question

We recently became aware that my MIL has a checking account balance of over $50K. Aside from the obvious questions about whether the money should be invested in some other way in order to generate a return, should we be concerned otherwise? To me, it just seems like the money is too easily accessable.

She is in her late 80's, lives modestly and frugally in her own home, and is of sound mind, but has this "thing" about worrying that she'll run out of money and it makes her feel better to have the money in the account. For years, we knew she was running a balance of over $20K, but I was shocked that it had gotten so big.

When her husband died 15 years ago the children marshalled all her resources into a trust account that is managed to provide her with a steady income, in addition to a small pension and SS. The investment account has worked very well over the years but she continued to stash the income she receives in CDs. (It's hard to get her to spend anything). Now I think she's given up on the CDs and is just letting her checking account grow. I guess there are many worse problems to have, but I was just wondering if we should be concerned about the security of such a high checking account balance.
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Old 12-23-2010, 07:39 AM   #2
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I honestly don't like it. She could be scammed out of it pretty easily. My MIL has 1 year CDs, which aren't great, but at least they keep the money out of potential harm's way. Even if she isn't gullible, what if her purse got stolen or something? They could drain that account in short order.
What about taking her to the bank yourselves and getting some more CDs? I understand if she doesn't want to invest in something "riskier" at her age, but at least the money would be out of the checking--heck, even a simple savings account might be better.
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Old 12-23-2010, 08:04 AM   #3
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I'm a retired fraud investigator, and you are wise to be concerned. That said, it depends on how well she can cope with attempts to scam her, how easily she trusts too soon, and the like. But women in their 80's are the scammers ideal target.

FIL here was scammed out of $1,100 that he can ill afford to lose just last month. We only knew about it because DW talked him into allowing her to have Internet access to his accounts so she can "look over his shoulder" without being intrusive. He doesn't use the Internet - doesn't own a computer and has no interest in it. He was embarrassed of course, but at least the damage didn't go any further.

A stolen checkbook is not a big deal, disregarding for the moment the cash flow complications, as long as one finds out about the forged checks in time (60 days). Fill out an affidavit of forgery at the bank and they will replace the lost funds. Eventually. Wire transfers to another country, as in FIL's case, are another matter entirely. That money is gone for good.

So at least try to talk your MIL into CD's, no matter the interest rate. That doesn't prevent her from walking into the bank and demanding the money, but it does present another hoop to jump through and gives the bank people an opportunity to question her about why the rush.

At the very least try to get her to allow you to have the Internet access so you can watch what she's doing with her money.
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Old 12-23-2010, 09:19 AM   #4
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Encourage her back into CDs and remind her she can still get the money out of them early if she needs to and she won't lose the principal.
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Old 12-23-2010, 09:29 AM   #5
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Thanks for the replies. I think you both have confirmed my concerns. The checking account just seems too visible and accessable. She will be with all three of her children this weekend so this might be a good opportunity for them to take her financial "temperature" (she doesn't know that we know about the high balance) and to recommend that she at least move some of the money into CDs. She'd never feel comfortable moving it into the investment account and at least the CDs will be insured and not quite as accessible. Thx.
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Old 12-23-2010, 09:56 AM   #6
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Is it possible to set up an account such that two signatures are necessary for any amount over x?

This is how my Mom was scammed a few years ago:

Hello?
Hi, Louise?
Yes, who's this?
This is your favorite nephew.
Jeff?
Yes, it's Jeff. How are you?
blah blah.
I need $350 for blah blah. I'll send over my friend to pick it up.

They actually caught the guy and he went to jail.
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Old 12-23-2010, 12:10 PM   #7
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We had a wake-up call last summer. Took 90yo MIL to the grocery store like I do every week, dropped her off. Got a call 45 minutes later; her purse had been snatched from the shopping cart. A middle-aged woman had followed her, waiting for her to turn her back, picked up the purse and walked out of the store.

We spent the next six hours with police, store managers, bank officers at two banks, locksmiths, etc. With help from everyone, the police discovered the thief at a bingo parlor 10 miles away, after she had used the ATM card in the purse.

What we discovered: MIL's house had been robbed 35 years ago, so she felt the safest place to keep her valuables was in her purse because she always had it with her. So inside the purse was a large amount of cash, safe deposit box keys, extra keys to my husband's classic car, a convenient list of bank accounts WITH atm PINs, statements from two banks listing her various accounts, a couple sentimental pieces of jewelry, her Social Security card and various other goodies.

The purse and most belongings were recovered, but the cash was gone, and we had all the locks to the house changed. We had to close all the various accounts and reopen new ones.

Since then, we monitor her accounts very closely. The bank suggested that we establish an online account linked to my email address, so I can check her transactions occasionally. They pointed out that this also prevents someone else from getting online access to her accounts, which we hadn't thought of.

The point is that they have their own ideas of what is safe, and that is not always so. My MIL is usually a very smart and cautious woman, paranoic at times, and because of that we never dreamed of asking her what she kept in her purse. She went through a lot of trauma, and was very fortunate in how it turned out, but we've all learned a lesson.

I hope you can work with your MIL and the bank to come up with a safe solution.
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Old 12-23-2010, 12:33 PM   #8
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Originally Posted by misanman View Post
We recently became aware that my MIL has a checking account balance of over $50K. Aside from the obvious questions about whether the money should be invested in some other way in order to generate a return, should we be concerned otherwise? To me, it just seems like the money is too easily accessable.
It could be a different kind of danger signal. My father, who is showing dementia symptoms, has allowed his checking account to bloat. He says he wants to make sure there's enough in the account to cover his bills if he makes a mistake balancing it. The reality is that he can no longer use a computer and may even have stopped balancing the account.

If she won't go for a joint account then one (hopefully palatable) option might be to ask for one of you adult children to have "authorized viewer" access. It's not joint but if the bank's website is set up for it then you could view her account transactions and possibly even get an e-mail for large deposits/withdrawals. If she's not watching it online then you'd find out about problems before she did.

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Originally Posted by Sarah in SC View Post
She could be scammed out of it pretty easily.
Yeah, and that includes the bank's friendly account manager encouraging her to put the money in one of their affiliate's many fine investment products...
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Old 12-23-2010, 12:35 PM   #9
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Encourage her back into CDs and remind her she can still get the money out of them early if she needs to and she won't lose the principal.
I don't know if they are still available but a few years ago Bank of America had CD's with no early withdrawal penalty unless the money had been in the account for less than five days.

Also, aren't there limitations (related to anti money-laundering laws) on bank withdrawals over $10,000? Can a customer just walk up to a bank teller, cash in a CD of over $10K, and walk out of the bank with the full amount in cash?
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Old 12-23-2010, 12:40 PM   #10
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Since she is in her late 80's, it may be time to bring up the idea of having a trusted relative handle her finances or at least some of them. You could start with the checking account and bills.

My mother was quite sharp until about a month or two before she died (at 98), but my brother still handled things for her once she was in her mid 90's and had a joint checking account with her, power of attorney, and so on. He handled most things online and we had no more worries.

With her, our main worry was all of the con-artist letters she was getting from strangers who presented themselves as starving but worthy students with no money for tuition but laudable ambitions, and this type of thing. Even though she wasn't senile, she grew up in a kinder, gentler age and she was a sweet and sympathetic woman. We worried that she might be vulnerable to this type of con. I used to say that she might give all her money away before she died, and although I would say it in a joking manner, we all thought that was a distinct possibility. But with my brother monitoring her accounts and paying her bills, at least we knew what was going on.

You might try urging her to see a lawyer with you and get power of attorney and the like set up. She might want a living will. You could suggest to her that nobody lives forever, and that it is time to get her affairs in order.
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Old 12-23-2010, 01:00 PM   #11
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I don't know if they are still available but a few years ago Bank of America had CD's with no early withdrawal penalty unless the money had been in the account for less than five days.

Also, aren't there limitations (related to anti money-laundering laws) on bank withdrawals over $10,000? Can a customer just walk up to a bank teller, cash in a CD of over $10K, and walk out of the bank with the full amount in cash?
There is no law stopping anyone from withdrawing large amounts of money. The bank just has to fill out a form to send to the feds.
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Old 12-23-2010, 01:12 PM   #12
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My now deceased, FIL had about $40K in his checking account when he died. I would have liked to have moved some of it - but he did not understand CDs, money markets or even credit cards for that matter. He was not comfortable with the idea. He did agree to let DH be on his checking account, pay his bills, and after a very poor experience with buying a used truck on his own - he agreed not to buy something with at least talking to us. It seemed like a reasonable compromise. He was comfortable and we knew what was going on. He didn't carry his checkbook around, so that wasnt a concern. Pretty sure he didnt know what an ATM card was.

My mother, on the other hand, is showing signs of early Alzheimer's and refuses to let any of us help in any way. She is starting to make some questionable purchases - with the statement "it is my money and I can do what I want" - which is true. Every conversation with her is a battle. I do have POA, but that is pretty useless unless the person agrees they want you to use it. So other than using her ids and passwords to check her accounts periodically, there isn't much we can do. She does call one of us now and then to ask what we think about something - but she generally has forgotten what we said by the next day. My mother was never a very trusting person. I sometimes think that the older we get the more "pronounced" our personality becomes.

I guess this is my long-winded way of saying what you do/can do/should do really depends on your mother, her experiences with money, and your relationship with her. I am sure it must be hard for elderly parents to start trusting their kids, who are still adolescents in their minds.... I keep telling my kids that I truly hope that I trust them when I get to that point. But none of us know how we will react.....
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Old 12-23-2010, 01:48 PM   #13
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My mother was never a very trusting person. I sometimes think that the older we get the more "pronounced" our personality becomes.
Truer words have never been spoken, KM.
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Old 12-23-2010, 03:43 PM   #14
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There is no law stopping anyone from withdrawing large amounts of money. The bank just has to fill out a form to send to the feds.
That might be true; however, you can set up accounts with some limited fraud protection. You can ask the bank to have your account password protected so that you can only do teller transactions at your bank by providing the teller with a password.

My financial institution required this for one of my accounts after someone wrote three large checks against the account and cashed them at another depository institution. I'm still trying to figure out how the culprit got my checking account number (and he then proceeded to get forged/electronic checks using that number). The account later had to be closed.

With older people becoming senile or forgetful, I think you just have to continue to closely monitor the behavior to avoid rip-offs. My mother was always a prime target (and she got Murphy-scammed once with the money in the bag trick). Also, there are situations where the elderly person just keeps on doing unwise but harmless stuff; like my mother kept on "paying" a water bill, thinking the amount credited to her was the amount she owed. She did this for around 2-3 years -- even though the water company kept on telling her to stop paying! She couldn't understand the problem until we told her she had a credit of nearly $5000.
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Old 12-23-2010, 05:55 PM   #15
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Thanks, all, for the advice. Several of you have brought out the how difficult this can be. It's like the relationship that you've had for 50 - 60 years is all of a sudden reversed and it can be uncomfortable for all.

There is another thing with my MIL that I'm trying to keep an eye on. She has become good friends with a younger couple (~60, I'd guess). They get together every week to have dinner and play games. She enjoys it a lot and as far as I know there is nothing other than good intentions. I just want to make sure that it isn't too easy to get a hold of her cash.
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Old 12-23-2010, 05:57 PM   #16
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Although it may be a good idea to make the money less accessible, I decided when managing my Mom's money towards the end, that there was no point in worrying about getting better returns.

Quote:
her purse had been snatched from the shopping cart.
I'm amazed at how many women, of all ages, leave their purses unprotected in the shopping cart. Every time I see one I think "There's someone who's never lived in a big city."
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Old 12-23-2010, 06:22 PM   #17
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My father (age 90 and of semi-sound mind) has put my brother and me on his checking accounts as co-owners. This is in addition to the durable POA and health POA we have.

I worry about his handling of money - he has a lot in an account but I think it's in CDs - the bank manager seemed to know him well. Most of the money (since my mother died) is in a trust my brother and I manage.

Maybe you can use all the responses to your post as information to talk to your MIL about "this is a concern and your money could be unsafe this way" - and why. And I KNOW that's not going to be easy...

You could also take her to the bank and talk to the bank manager about what could happen with all that money in her checking account. Good luck!
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Old 12-23-2010, 09:57 PM   #18
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My mother was never a very trusting person. I sometimes think that the older we get the more "pronounced" our personality becomes.
I really hope that is not true in my case. Mine is already pronounced enough.

Ha
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