Managing Money for Someone Else / Published 2014 / by Karen Haywood Queen

planit-manage-moneyMaybe your dad just had a stroke and can no longer handle his money. Maybe your mom’s decline has been gradual, but you realize she’s not keeping up with her bills.

Managing your own finances is tricky enough. But when you become the financial agent handling a relative’s finances, you’re navigating a minefield of legal, financial, and relationship issues. Here’s what you need to know.

About 22 million people age 60 or older have designated someone to make decisions for them as an agent under a power of attorney (POA) document. Millions more have court-appointed guardians or other fiduciaries, according to the Consumer Financial Protection Bureau (CFPB), Washington, D.C.

“It’s a big responsibility,” says Naomi Karp, project manager for the CFPB’s guides to managing someone else’s money.

“When people are given legal authority to manage someone else’s money, it’s important for them to understand their legal duties. They’re standing as a bulwark between the people in their charge and people who want to rip off vulnerable older people.”

As a fiduciary, you must observe four basic rules:

  1. Act in the person’s best interest.
  2. Manage money and property carefully.
  3. Keep money and property separate from your own.
  4. Maintain good records.

There also may be issues related to Medicaid eligibility for nursing home care. At risk are the elderly person’s assets and your family relationships. Even if you’re only managing money on an unofficial basis, these are good guidelines to keep in mind.

Obtain power of attorney

If you don’t have a POA in place for your aging parents or relatives (or yourself), get one to avoid the need for court-appointed guardianship or conservatorship in the future.

As a court-appointed guardian or conservator, “You have to file these horrendous annual accountings that can take hundreds of hours,” says Evan Farr, of the Farr Law Firm in northern Virginia. You will have to file some documents with POA but it’s not nearly as time consuming.

But although you can get a POA document free or cheap online or from office supply stores, that upfront savings may cost you and your loved one in the long term. “Not all power of attorney (documents) are created equal,” Farr says. A good POA must have asset protection authority with the ability to make unlimited gifts, create trusts, take money out of trusts, and terminate trusts, he says.

Consult an eldercare attorney

Your next step is to consult an attorney. “Go to a really good eldercare lawyer in the same state as your parent—state laws vary quite a bit,” says Roxanne Nelson, of Bellingham, Wash., who shares POA responsibilities with her brother for their ailing mother in Florida. “It’s worth the investment. We paid $10,000 up front and it’s been invaluable.”

Protect assets

With the proper legal measures in place, the person in need of care can legally and ethically qualify for Medicaid-funded nursing home care without spending assets down to near zero. “Medicaid is the most complex area of law in existence,” Farr says. “It’s a minefield. If people don’t check every box properly, it can blow up and cause huge financial problems.”

An eldercare attorney will help you with what’s called Medicaid asset protection legally protecting your elderly parents’ assets from the high cost—for example $12,000 to $14,000 a month in northern Virginia—of nursing home care, enabling you to legally and ethically file for Medicaid on their behalf, says Farr, one of only about 450 certified eldercare attorneys in the country. In perspective, the cost of an attorney’s help is about the same as a month or two of nursing home care paid out of pocket.

If you have assets that you want to protect, it pays to plan ahead. Farr says the cost of hiring an eldercare attorney to shield assets five years or more from when the person needs nursing home care is $5,000 to $7,000, and 100% of assets can be protected.

The cost of hiring an eldercare attorney to shield assets in a crisis situation—at the time nursing home care is needed—is $12,000 to $25,000. In the case of a married couple, usually 100% of assets can be protected. For an individual, 40% to 70% of assets can be protected.

“Seventy percent of people are going to end up in long-term care at some point and they’re going to want to do Medicaid asset protection to shield their assets from the catastrophic expenses of nursing home care,” Farr says. “Most couples who don’t do Medicaid asset protection wind up going broke.”

Act in the person’s best interest

With a financial POA, you’re legally required to act in the person’s best interest—and that means putting your mom’s or dad’s best interests ahead of your own, Karp says. If you use your dad’s or mom’s money to buy a car to take him or her to doctor’s appointments but use the car more for your own errands, that’s putting your interests first, she says.

“Remember it’s not your money,” Karp says. “If you stray, you may go to jail.”

Manage money and property carefully

You have to avoid conflicts of interest—or even the appearance of a conflict—says Jan McCurdy, co-owner of Senior Care Management in Ewing, N.J. For example, if your son is mowing grandma’s yard for $75, get a written estimate from a local lawn care company. Then if someone—a jealous family member or judge—questions you, you can show the $200 estimate from the lawn care company.

“You have to account yearly to Social Security how that money was spent,” McCurdy says. “Adult children are always shocked to know they’re held to a fiduciary standard. It can be really devastating if you get accused of misusing someone else’s money.”

Keep money and property separate

No matter that you and your mom have always shared everything. Once you’re managing her finances, keep separate accounts.

“People put money into their [own] account just for ease of access and then they go to apply for Medicaid and realize this is big mess trying to figure out whose money is whose,” McCurdy says.

Maintain good records

You and your parents may have been flexible about taking turns to pay for a meal out, but those days are probably over, too. Whether you’re talking about a $50 meal or $5,000 to help with a grandson’s tuition, maintain a paper trail by keeping receipts, copies, or logs, for example. Karp says if your parent ends up seeking Medicaid eligibility for nursing home care, your state may “look back” to five years’ worth of records.

Avoid paying in cash. “We’re used to going to an ATM and doing business,” Karp says. “But then it’s going to be hard to account for what you did. It’s a good thing to have those records to show you did the right thing.”

Allow yourself time

Even with a good lawyer, dealing with these issues can take hours and hours, especially at first. “Be prepared,” Nelson warns. “When my mother broke her hip, my brother and I spent a week in Florida going to banks, filling out forms, talking to them in the nursing home. It was a lot of legwork. It was extremely time-consuming.”

Talk to the people at your parents’ credit union. They can help you streamline management of parents’ funds to comply with your fiduciary duties and keep things running smoothly at the same time.

Assets online? Plan your estate for the digital age / Published 2014 / By Karen Haywood Queen

Help heirs find your paperless accounts after your death we spend more of our lives online — banking, collecting credit card rewards points, playing virtual reality games, creating photo albums, emailing, tweeting — it’s increasingly important to consider how beneficiaries can access those accounts and any assets they hold, once we’re gone.

“It used to be when someone passed away, there were all these clues — a paper trail around the house about what the deceased person owned and owed,” says Karin C. Prangley, an estate attorney at Krasnow Saunders Kaplan & Beninati in Chicago. “Now there is no more paper trail. All of that is digital. It’s a big deal because it’s hard to get at that digital information.”

Ignorance can be costly. “If you can’t get into this person’s email account, if you have no idea where this person banks … the [deceased] person may have a million dollar account at Fidelity, but you just don’t know, says Prangley.

“Maybe the person had an insurance policy, maybe the person had an online store selling a specialized product, maybe there was some sort of business you as the heir don’t know about. The money goes right to the grave.”

Not having access to the deceased’s online accounts or email alerts could mean that bills normally paid online go unpaid. Since the estate is responsible for existing debt, missing those payments could cause headaches as you straighten out the problem, says Deborah L. Jacobs, author of “Estate Planning Smarts.” “If you don’t find credit card accounts quickly and bill paying is delayed and finance charges are assessed, you can most likely get the credit card companies to forgive the finance charges,” Jacobs says. “But you may have to fight them.”

The opposite situation is also a problem. Recurring bills that are on auto-pay may continue to be paid even after the product or service is no longer needed.

“We’ve seen instances where someone has been dead for years and they’re still paying for The Economist online,” says Jacobs.

Finding financial accounts

Without a list of financial accounts, finding them can be tricky, but there are steps you can take. The easiest: check the person’s wallet, pocket, desk and drawers for the receipts, Jacobs says. “Even if you’re doing almost everything online, those receipts may be in their pockets.”

To find open accounts, such as credit cards that aren’t regularly being used and generating receipts or bills, you can get a copy of the deceased person’s credit report from one or all of the three consumer credit reporting agencies, TransUnion, Experian and Equifax. But you’ll need documentation, agency representatives say.

For example, all three require a copy of the death certificate and proof that you have power of attorney or are executor of the estate.

Beyond banking

In addition to banking and investment accounts, many people access their airline, hotel and other rewards programs online, says Glenn C. Williamson, CEO and founder of WebCease Inc. in Portland, Ore., which helps heirs track down those digital assets. “I personally have half a million Hyatt points, valued at $35,000 to $45,000,” Williamson says.

… Maybe there was some sort of business you as the heir don’t know about. The money goes right to the grave.
— Karin C. Prangley, Estate planning attorney

The potential dollar loss goes beyond financial accounts and rewards programs to items you may not think of immediately, Prangley says. “What’s the cost of losing a lifetime of photos? What happens to unique weapons held by a World of Warcraft master? What about wins in offshore, online poker accounts?”

North American respondents to a survey by security giant McAfee valued their digital assets at an average of $54,722 with listed assets including music downloads, photos, emails, financial and health records, career information and contacts, and hobbies and creative projects.

Even a great-grandfather may have digital assets if he’s been online, says Williamson. “We did one 91-year-old guy who didn’t even have an email address and he had hotel points,” he says. Another man in his 80s had a separate Facebook account for selling RVs — news to his family, Williamson says.

Finding assets online can be time-consuming. First, heirs have to know an account exists. Second, they have to be able to gain access to that account via usernames and passwords.

“People are grieving,” says Jacobs, the author. “This is adding an extra hardship.”

Williamson estimates it took him 25 hours to find his mother’s online accounts after she passed away, which gave him the idea for WebCease. WebCease routinely searches about 60 nonfinancial online accounts, including photography sites such as Flickr, hotel and airline rewards programs, social media sites and e-commerce sites including Amazon, PayPal, Netflix and eBay.

WebCease researchers will personalize the search and look for additional accounts when necessary, Williamson says. For instance, in the case of the RV enthusiast, they searched various campground websites to see if the deceased had a membership with valuable rewards or resale potential. “We wouldn’t typically search on those, but when my researchers make a correlation they will go further than our standard list.”

WebCease lets its clients know what it finds, and then gives them each site’s policies and information on how to transfer the digital assets and how to shut down the account, Williamson says.

Rescuing vital records

Passwords are the next hurdle. Even if you as the executor or heir have written permission from the deceased account holder to access accounts, without the proper passwords, online providers may not give you the content, says Hazel Sanchez, estate planning attorney at the Law Offices of Rhonda H. Brink in Austin, Texas.

Some online providers, if they were to find out the account holder is deceased, would simply close the account and delete all the information on it.
— Hazel Sanchez, Estate planning attorney

“Each one has different procedures,” says Sanchez. “Some online providers, if they were to find out the account holder is deceased, would simply close the account and delete all the information on it.”

Sanchez recommends that if you do have access to usernames and passwords, you print out hard copies of financial information so that even if the accounts are later deleted, you’ll have the information you need.

Technically in these cases, you could be liable for unlawful access of data, but it’s not likely an heir would be prosecuted. “They talk about liability of unauthorized access, but nobody ever enforces it,” Sanchez says. “It’s more important for the fiduciary to gain control of assets and prevent deletion of information before anything happens.”

Sanchez says a little pre-emptive action can prevent any problems related to unauthorized access. “We recommend will provisions that give the executor authority to access the deceased’s digital assets and accounts,” she says.

Shutting down fraud

Eventually, though, you’ll want to make sure you close accounts for security reasons. The identities of nearly 2.5 million people are misused every year to apply for credit, according to a 2012 study by ID Analytics.

“You don’t want mom’s profile out there,” says WebCease’s Williamson. “When you die, it’s public record. It’s so much easier to steal a deceased person’s identity.”

When you die, it’s public record. It’s so much easier to steal a deceased person’s identity.
— Glenn C. Williamson, CEO and founder of WebCease

To prevent fraud and identity theft, notify credit card companies and other lenders that the person has died, says Maxine Sweet, president of public education at Experian. “They will report the deceased status to the credit reporting companies and it will automatically become part of the file, preventing fraud,” she says. “If the deceased was receiving Social Security benefits, the Social Security Administration also should be notified and [SSA] will also report that information to us.”

Even if you’re not looking for open accounts, you still should contact the credit reporting agencies with a copy of the death certificate, so the credit file can be updated, says Clifton O’Neal, vice president of corporate communications at TransUnion.

You may also want to contact the Direct Marketing Association to have the deceased removed from marketing mailing lists, Sweet says. “Having those arrive in the mail can be painful for the relatives,” she says.

Planning your digital afterlife

You can prevent many of these hassles for your own heirs by making preparations now. A few simple measures can lessen or eliminate the need for your loved ones to become online sleuths after you’re gone.

Keep a snail mail trail

Even if you do business mostly online, elect to receive some paper statements so your heirs will find out about your accounts from mail delivery, says Jacobs, the author. “Even though I favor cutting down on the paper in our lives, this is not the place to do it,” she says.

Consolidate your accounts

Combining financial accounts or at least moving assets to a small number of providers makes them easier to keep track of, Jacobs says. “I know of a number of elderly people who have certificates of deposit at 50 different banks,” Jacobs says.

Finding the records could be sheer luck. Jacobs and her husband went to one bank her mother-in-law used to cash in one of her CDs and the bank officer told the couple she had a second CD that they hadn’t known about.

List account information

Make a list of accounts with the name of the financial institution, account number and how it’s titled and put it in a folder if you’re comfortable having that information at your house, Jacobs says.

If not, make one list of user IDs and a separate list of passwords, Sanchez suggests. Give each list to a different person and tell your executor those people’s names so the two lists can be put together when you pass away, she says.

She acknowledges that keeping the list up to date could be time-consuming, but says it’s necessary. “We think it’s very important for everybody to make a list inventory of what they have,” Sanchez says.

Name an online executor

As you make that list of user names and passwords, consider naming an online executor, who could be separate from your overall estate executor, says Prangley, the estate attorney. An online executor would identify and provide information to your family about your online accounts and digital assets and they could sell what might be useful to others, she says. Further, the online executor could delete any emails or other online communication that might hurt your family members, she says.

“Some people have separate online lives,” she says. “Your executor might delete your online flirting.”

Additional resources

An industry has cropped up to cater to today’s digital estate planning needs. For example, Eterniam, founded in 2013, preserves all your digital assets — photos, videos, documents and content from social media sites. You can bequeath each asset to chosen beneficiaries.

The Digital Beyond, created by John Romano and Evan Carroll, is a think tank for digital death and legacy issues. Its website,, maintains a list of online services designed to help you plan for the future of your online content.

How to protect a foster child from ID theft / Published 2013 / By Karen Haywood Queen

Keep yourself or someone you know safe from credit fraud kids are at greater risk for identity theft than the general population because more people have access to their private information. Their families may be cash-strapped and view the young person’s clean credit as an easy fix to a financial problem.

Help protect yourself or a young person you know by following these tips.

Keep personal information private

  • Friends don’t need to know a child’s Social Security number or the mother’s maiden name.
  • Don’t disclose a youth’s Social Security number unless absolutely necessary. If someone is asking for it, ask why they need it and what they’ll do to keep it safe.
  • Beware of people selling fake IDs. Besides the obvious risk of getting caught with a fake ID, the people involved can misuse the information given to create the ID.

Keep personal information safe

  • Store important documents such as Social Security cards and birth certificates in a safe place, preferably locked up — not on you or the child, in a wallet or backpack.
  • Shred unneeded documents that have personal, financial or medical information.

Be safe online

  • Delete unsolicited emails that ask for personal information.
  • Use strong passwords, updated virus software and firewalls for online accounts and computers.
  • Monitor what personal information children are posting online. To ensure a website is secure, look for the lock icon in the address bar and a URL that begins with https//.
  • Never store a password on a computer or allow a site to recognize the password every time.

Check and protect credit

  • Order and review a credit report from or directly from the three credit reporting agencies, Equifax, Experian and TransUnion. If a child is under the age of 18, a parent or guardian may have to initiate a written request.
  • Check the youth’s name with date of birth, and then check the Social Security number separately. Identity thieves often use the Social Security number with a different name and birth date.
  • Opt out of preapproved credit offers by going to or call toll free 888-5-OPT-OUT (888-567-8688).
  • Monitor the mail and be suspicious of preapproved credit offers addressed to a child or teen.

After a theft

  • Report the theft to the Federal Trade Commission at Or call 877-IDTHEFT (877-438-4338).
  • Have the youth work with a trusted, financially stable adult to clear up credit problems, preferably before they turn 18. The child should shadow the adult to learn how to handle problems next time.
  • Place a fraud alert or freeze on the child’s credit reports to help prevent identity thieves from opening new accounts using that name.
  • Go directly to the businesses involved with a copy of the birth certificate proving that the victim was underage when the credit was taken out.
  • File a police report.
  • Teach the child what you’ve done wrong or right with your own credit, and advise them on the importance of building good credit.