The mechanics of managing your money as we age

[clifp]

I know many folks have helped/taken over their elder parents' finances.

I've been managing my parents investment since the late 80s, and my sister and I have been handling all my mom's money for the last 1/2 dozen years.

The migration online greatly simplified many things. However, as website security has increased, with security questions, two factor authentication, biometrics it is becoming increasingly difficult to help our folks. I fear this is going to be even worse for us as we age to remember all the steps to log on to our accounts, and especially difficult for our kids who might want to help us.

When mom first started showing signs of dementia, she had accounts with Vanguard, Schwab, A credit union, and 4 or 5 banks and advisers. The first thing I did was consolidate, Vanguard, Schwab, one local bank.

In theory, this should not be complicated you get a power of attorney and so armed the financial institution will let you do everything you do. In practice, every major financial institution has its own power of attorney form. This means a trip to a notary while hoping your parent has a good day, and they know their name, social security #, and date of birth. (No longer true for my mom)

Even power of attorney does not do everything you want. For example, while I can write checks and move money for my mom's main Schwab account, it didn't cover the 4 educational saving accounts we set up for Great Grandchildren. So my sister just forged her name again so her great grandchild can use their ESA for college this year.

Now days managing anyone else financial account means you need access to their phone. In a few years, you may need to cut off your loved ones finger in order to get access to their money

I'm curious is there any organization, like AARP working on making this easier?
A really good starting point would be to have a universal power of attorney form that all financial institutions would have to accept. Does anyone know if such a thing exists?


I've set up my niece with password to my lastpass account, as well as contact names, and spreadsheet listing all my assets. But if die tomorrow without my phone pin, and fingerprint it won't do her a lot of good.

[donheff]

This whole process bothers me. DW and I have signed and notarized POAs. That some institutions will refuse to honor them is outrageous. I just discovered that Vanguard has a simple online form that permits delegating limited access to another party. DW and I delegated each other authority to buy and sell, transfer funds to our designated external bank, but not to change beneficiaries. Schwab doesn't offer anything like that. They require you to print, sign, and notarize their POA to accomplish this.

I thought our POAs were sufficient to enable us to get a doctors certification and take over each others accounts (or have the kids do so) when we become incapacitated. I need to talk with the brokerages to make sure what the reality will be.

[target2019]

Your password manager should have a way to assign co-authorization to another individual. If the 2FA goes to an email, that would work if you've given that email to niece. Of course you'd have to set up a new email.

We went through a long period of managing in-laws investments and paying bills. Eventually she decided to add name of one daughter to the bank account. This simplified many things, as every income and expense went through the account.

Still, things can go wrong. One sister emptied out the account by convincing an employee at another branch that she as executrix should get the money. Eventually the account was restored as it should have been. The money was divided according to mother's wishes.

For future us, every beneficiary is checked, and edited as required. We've added daughter as joint holder of core banking accounts. As executrix she will probably need to pay necessary bills. Son is aware of all, and I've added a long letter about exactly what should happen.

Some assets, like real estate, are trickier. Haven't figure that out. It would end up in probate, which I'd like to avoid.

As with most legal changes, one thing may get fixed, but it rarely simplifies what can happen in 50 competing states.

[donheff]

Quote:

Originally Posted by target2019 Your password manager should have a way to assign co-authorization to another individual. If the 2FA goes to an email, that would work if you've given that email to niece. Of course you'd have to set up a new email.

DW and my son know how to access my password manager in an emergency but this is a very temporary solution. If they access my accounts as me they are violating the terms of service and probably the law.

Quote:

We went through a long period of managing in-laws investments and paying bills. Eventually she decided to add name of one daughter to the bank account. This simplified many things, as every income and expense went through the account... We've added daughter as joint holder of core banking accounts.

Does this take the account out of your estate and make them a JTWROS? Might work OK with a smallish checking account but not with large taxable investment accounts and not possible with IRAs.

[CincyDave]

Quote:

Originally Posted by target2019 Some assets, like real estate, are trickier. Haven't figure that out. It would end up in probate, which I'd like to avoid.

Some states allow transfer on death designation for real estate. Looks like you are in NJ, which doesn't according to this link.
https://www.nolo.com/legal-encyclope...hapter5-1.html

[ncbill]

I had an eldercare lawyer setup a revocable living trust with myself as co-trustee (not successor) once mom was officially diagnosed with dementia.

I then used her durable POA to move all assets into the trust.

[Souschef]

We have a binder from our attorney that contains the POA, Advance directives, pour over will, etc,
In the front of the binder are 3 pieces of paper:
A list of our assets with current value, which I update
A list of all the accounts, with broker name, address, phone numbers and account numbers
A list of all our passwords, not only for financial institutions, but for other places such as Amazon,etc.

[target2019]

Quote:

Originally Posted by donheff DW and my son know how to access my password manager in an emergency but this is a very temporary solution. If they access my accounts as me they are violating the terms of service and probably the law. Does this take the account out of your estate and make them a JTWROS? Might work OK with a smallish checking account but not with large taxable investment accounts and not possible with IRAs.

I was referring to a feature of some password managers, where you assign co-authority to another person. This allows the other to access your login list, with your permission, but of course that does not extend authority to the actual accounts. So, in just our family, I am allowing this in password manager. I'm not suggesting anyone else do it, but it makes more sense then giving someone your logins one at a time and granting them authority to essentially "be you." That is definitely illegal, and it is covered in every agreement. Once you die, no matter how they got the login, that access is still illegal, unless through the institution you've given the other some level of access.

This does not cover the other logging in as a unique identitiy. You do want that. Institutions have that, at least Vanguard and Schwab do.

In our state, the bank account becomes the property of a survivior. Banks attach acronyms in the legal title, like POD, IFT, and so on. I think JTWROS is only for investment accounts.

In our case the executrix is the joint holder. Anyone reading this has to figure out your own approach, what state allows, etc.

[target2019]

Quote:

Originally Posted by CincyDave Some states allow transfer on death designation for real estate. Looks like you are in NJ, which doesn't according to this link. https://www.nolo.com/legal-encyclope...hapter5-1.html

Yes, we can't do that. Hence, I still think of what happens to significant real property when I'm gone.

[SecondCor521]

I don't know if AARP or someone else is working on this problem. I also don't think a universal POA exists.

When my Mom died, the estate attorney recommended consolidation. As part of that, we rolled my Mom's IRAs into my Dad's IRAs and went from two brokerage firms to one. My Dad also signed a very thorough lawyer prepared POA, which I think Vanguard and my Dad's local bank accepted and set me up with POA access.

Dementia is a tough thing. One thing my parents have done in general is to try to stay ahead of things. So once a person is in moderate dementia this creates obvious difficulties, but with the durable POA and all the health care forms already completed when my Dad had good mental capacity, we think in our case we've headed off some of these challenges.

One thing I'll add is monitoring. I now have a monthly task on my to do list to review my Dad's brokerage and bank activities to check for anything unusual. He's been taken by a few small scams and he's made a few small financial mistakes. I monitor those so I can (a) try to get his money back when it makes sense to, (b) keep my sisters informed on my Dad's mental acuity, and (c) determine how much I need to be involved. On that last point, I try to err on the side of staying out of the way and uninformed - my Dad deserves his dignity and privacy as much as possible.

I also monitor his health care wishes and beneficiary designations yearly. I figure he's entitled to change his mind about plug pulling and I should know and follow his wishes, and I've read stories that beneficiary designations can get lost. So I review his wishes with him periodically and print out beneficiary designations every year and file those away.

My parents have long kept a book with all their usernames and passwords in it. Not the best security-wise, but my 85YO Dad is not going to learn to use LastPass at this point. So I keep that password list up to date and also have my own copy.

One thing to note for @clifp is that after death, the rules change. POAs cease to have any authority. Accounts will get locked (brokerage) or closed (credit cards) immediately once the financial institution becomes aware of the death. But they also should be responsive to whomever is the executor of the estate if they show Letters Testamentary (which I understand to be the executor's credentials). So fingers and passwords and the decedent's cell phone should not be involved. Vanguard was exemplary in working with my Dad and me when my Mom passed away.

I've read that adding someone, like an adult child, to a bank account as an account owner is problematic, even though it may be easy. I have POA on my Dad's bank account and have been able to do everything necessary so far. And his bank account is not subject to liability or loss if I were to do something dumb like get sued or not pay my bills. My understanding and hope is that it is straightforward to set up an estate bank account to handle bills.

On credit cards, my Dad added me as an AU on one of them, which was the way the credit card company recommended as a pseudo-POA. I don't like that solution because that credit card shows up on my credit report, but it's workable I guess.

I've thought about impersonating my Dad on several occasions just because it would be easier. And as long as what I'm actually impersonating him to accomplish is proper, then I want to say "No harm, no foul". But so far I haven't done it, mostly because doing it the right way isn't that much harder.

There are probably some good Nolo books on this general topic.

[pacergal]

Quote:

Originally Posted by Souschef We have a binder from our attorney that contains the POA, Advance directives, pour over will, etc, In the front of the binder are 3 pieces of paper: A list of our assets with current value, which I update A list of all the accounts, with broker name, address, phone numbers and account numbers A list of all our passwords, not only for financial institutions, but for other places such as Amazon,etc.

We have something similar.
In addition, We have gone to each financial and investment company and completed their TOD/beneficiary forms.
I have also told both kids how to access our phones and emails, as almost every financial account has 2FA needing those items.

Hopefully, that is enough. But you never know. We have attempted to make things as easy as we can during what is a stressful event.

[SecondCor521]

Quote:

Originally Posted by pacergal I have also told both kids how to access our phones and emails, as almost every financial account has 2FA needing those items.

After a person dies, the financial institutions are not going to use the decedent's cell phone or email for 2FA.

They will instead follow estate law and work with the executor or beneficiaries after proper notification of death and identification of the appropriate individuals.

[MarieIG]

DF is gone now, but he added me to his checking account and his brokerage (only child). We physically went down to the brokerage and bank to do so.

I didn't need to access his brokerage for living expenses, although I used some of my mother's brokerage (who pre-deceased) to cover DF's home care when the time came.

[clifp]

Quote:

Originally Posted by target2019 Your password manager should have a way to assign co-authorization to another individual. If the 2FA goes to an email, that would work if you've given that email to niece. Of course you'd have to set up a new email.

That's a good idea. I'll add my niece/executor to my Password manager.

Honestly, death is pretty straightforward. You take your death certificate, and your executor notification and financial institutions will eventually give you the money. You do want to avoid notifying any financial institution of any changes until you have the death certificate in your hand. People have been dying forever and financial institutions know how to handle it.

It is dementia which is such a pain in the ass. Financial institutions are understandably trying to make sure that only a person owning the account has access. So if you are accessing the account from a different IP address, or its been a while since you logged in, you are confronted with remembering what your favorite ice cream is, checking your phone for an access code, and being told to change the password every 6 months. A person with even mild dementia has a better chance of landing on the moon, than completing all these steps

Now perhaps for those of us 50-70, who've been using computers for most of our lives, unlike our parents who learned them late in life, it will be easier. But I have my doubts.

What is needed is some type of electronic access authorization, that recognizes that I'm going to be using a different cellphone, password, security question. Right now financial institutions will do this on an account-by-account basis with power of attorney. But it has to be done separately for checking, brokerage, traditional ira, Roth IRA, spouse IRA, bill pay.

My financial life is far more complex than my parent's, and I suspect that's true for most folks on the forum.

Perhaps I shouldn't worry after all, I'll either be dead or out in la-la land, thinking the care giver is my high school crush.

[Scuba]

This is what scares me a lot about aging. If DH and I both deteriorate mentally at a similar time, but are still alive, we are concerned about who will manage our affairs. We have a named POA, but both our primary and secondary POA’s are roughly our age. We have no children.

[Lewis Clark]

Quote:

Originally Posted by Scuba This is what scares me a lot about aging. If DH and I both deteriorate mentally at a similar time, but are still alive, we are concerned about who will manage our affairs. We have a named POA, but both our primary and secondary POA’s are roughly our age. We have no children.

+1

My wife had a POA for her aunt and was the estate executor. We lived about 4 hours away by car but in the same state. The aunt never needed my wife to completely take charge, but my wife could have done so if necessary. It would have worked, but would have been inconvenient at times.

We are in a similar situation. No children. Our siblings are about our ages.

We are planning to ask one of our nieces/nephews to do the job if it becomes necessary. But most are far out of state. The closest one doesn't appear ready for the responsibility at this time.

[gamboolman]

ms gamboolgal and I have dealt with the death of both sets of parents and unfortunately our son who passed unexpectedly. When folks don't have their business in order it can be very time consuming, tedious and stressful in dealing with their Affairs and getting everything took care of.

We have also been witness to some of our close Inlaws and Outlaws behaviors upon deaths of their family members that I could tell lots of stories about. Suffice it to say, people can be incredibly selfish and hateful when it comes to estates, monies, properties, etc. from deceased relatives.

Seeing all that drama made a very strong impression on ms gamboolgal and we have tried our best to manage our affairs to avoid all those types of Shenanigans when the time(s) come.

Upon retirement last year, ms gamboolgal and I consolidated megaoilcorps savings to our Portfolio at Vanguard and we have a Bank Account that is linked to our VG Portfolio.

A few years before retirement we had already consolidated all Savings Accounts at other outside Management Firms to Vanguard.

We have also converted our equivalent Mutual Funds to ETF's for simplicity.

We have just recently - moved our Portfolio from Vanguard to Fidelity - the reason was/is that we can meet face to face with the Fidelity Representative here in The Woodlands just afew minutes from the house.

For ms gamboolgal and I - that is a worthwhile benefit vs Vanguard.

We were not unhappy at Vanguard but now that we are retired and not living overseas anymore, the ability to call and talk or meet face to face with the same Representative who knows us and our particulars is appealing and preferred for us.

We reviewed/revised our Wills and set up the POA's, Revocable Trust, Medical Directives...16 legal instruments all in a effort to make it easy for the remaining spouse and/or #1 Daughter when the time comes....

All Passwords and Security questions are on the old spreashiite including passwords for the iPhones. We have joint access to every account at Fidelity and our Bank.

We have tried to do all we can possibly do to make it easier as we age and our desire and abilities to manage these things decreases and for eventually crossing over the Jordan.

We have also discussed that one day it may make "sense" to go to having Fidelity manage our Portfolio. But for now we are self managing. Having the relationship established with the Fidelity Rep will make the transition to having Fidelity take over one day alot easier.

We have the Old Fashioned hard copy "Death Notebook" in the Gun Safe and Safety Deposit box along with hard copies and electronic thumb drives of all legal documents.

We also put #1 Daughter on the Approved List to access our Safety Deposit Box at the Bank. She knows where the key is in the office desk drawer. She also has a key to the House.

But thats just us.

[ERD50]

Quote:

Originally Posted by clifp That's a good idea. I'll add my niece/executor to my Password manager. ...

I think it was mentioned earlier, but this really isn't the proper way to do it.

Give them some limited authority on your account. IIRC, that can be done on-line at most places, and it the accepted way to do it.

-ERD50

[Montecfo]

Quote:

Originally Posted by donheff Does this take the account out of your estate and make them a JTWROS? Might work OK with a smallish checking account but not with large taxable investment accounts and not possible with IRAs.

Jointly owned property generally does get a step-up in basis. The jointly owned property is not out of the estate, it simply escapes the will and probate.

[clifp]

Quote:

Originally Posted by ERD50 I think it was mentioned earlier, but this really isn't the proper way to do it. Give them some limited authority on your account. IIRC, that can be done on-line at most places, and it the accepted way to do it. -ERD50

At some point I will give her power of attorney, and when I'm dead it will make her life easier

I've yet to find an institution that will allow this without a notarized wet signature on their POA form.

I think the Gamboolman idea of having a their face to face Fidelity representative involved in the process is interesting. My current Schwab rep, while, nice and competent, is near 60, and probably retiring soon.