On Managing Parental Finances From Afar
My parents are physically healthy. They’re also capable of (and committed to) living independently.
But they’re no longer capable of managing their own money. This has been proven by foreclosure, flirtations with bankruptcy, and legal woes. Last year I was asked to take over my mom’s finances, while my stepsister began managing my stepdad’s.
There have been some hair-pulling moments along the way, but here are some of the things that have made it possible to deal with my folks’ finances while living thousands of miles away.
1. Obtaining credit reports and cutting up credit cards. My parents either didn’t know or didn’t want to tell me the extent of their financial hole. So it was necessary to do some digging to know what we were dealing with.
2. Checking in often. I visit twice a year, instant message a few times a week, and call whenever the guilt becomes overpowering. Bureaucratic matters are often easier to deal with in person, and I can buy my parents things like pre-paid gas cards to partially compensate for them not having credit cards. Also, checking in with my parents often tips me off to financial or medical issues that they might not otherwise tell me about. But this has to be supplemented by:
3. Relying on a person living nearby. I’m lucky that my stepsister lives close enough to my parents that she can see them weekly, help them with unexpected issues (like car tires giving out), and give them cash for day-to-day expenses. Which brings us to:
4. Redirecting mail. This might seem like a drastic step, but my parents can’t be trusted with credit card offers or dodgy debt consolidation letters. Also, plenty of finance-related notices still go through the mail. My stepsister initially set up a temporary mail forwarding service so that mail sent to my parents would be redirected to her place. Then I visited the closest major post office to make this indefinite. This was only possible after:
5. Obtaining power of attorney. This was a crucial step. My mother’s psychiatrist signed a document establishing my mother’s incapacity to manage her own financial affairs, and I had that document notarized. I soon learned to make lots of copies of this document, and to keep it online for easy access. This smoothed lots of processes, from being able to close and check on bank accounts, to the big one:
6. Becoming the representative payee of my mom’s Social Security payments. Dealing with the Social Security Administration is no joke. There was a lot of waiting on the phone and at the local administration office to have my mother’s Social Security payments made over to a bank account I set up especially for that purpose. This involved:
7. Creating a bank account to deal exclusively with parental matters. This account is designated as a representative payee account, so both my mom’s and my names appear on it. It’s also linked to the one bank account my mom still has, which never has more than $40 in it. Having an account just for the payments I receive and make on my mom’s behalf is useful both for organization and for transparency. If the Social Security Administration or another agency ever wants to check up on my management of my mom’s affairs, they’ll all be in one place.
8. Switching to automated payments and online billing. This is an obvious one, but it bears mentioning. My stepsister is responsible for paying the mortgage, while I pay for my parents’ phones, cable, water and power, gas, car insurance, home insurance, credit card debt, underpaid tax, and (when possible) property tax. The latter was a case of:
9. Instituting triage. The utility bills and the mortgage needed to be paid first, to keep water and electricity flowing and avoid the seizure of the house. My stepsister and I had to look at interest rates and the imminence of creditor action to determine, for instance, that the property tax due could be left for later.
10. Negotiating payments for large but non-essential bills. Something I, perhaps naively, didn’t know before all of this is that certain creditors are willing to negotiate lower payments on outstanding debt. This saves these creditors from the hassle of dealing with debt collectors and lawsuits. I cleared certain credit card debts by settling for a smaller amount and paying in one go, and managed other debts by establishing monthly payment plans based on what was feasible.
11. Getting familiar with service providers and arranging payments by card. I’ve met my parents’ accountant a few times, and now I pay him over the phone. My parents’ prescriptions get refilled at Walmart, which—despite its dubious corporate ethics—has the major advantage of offering an “Rx Express Pay” option. My card is registered with Walmart, so payments for my folks’ meds are automatically debited from my representative payee account.
12. Taking photos of everything. I’ve got folders on my phone and in my Dropbox account with vital contact details, registration numbers, medicine dosages, etc. Having this information at my fingertips has been a lifesaver when wading through bureaucratic requirements.
13. Coming to terms with the emotional side of things. It’s often frustrating to deal with administrators who require documents to be faxed (in 2017!); who make a practice of never answering the phone, expecting me to leave voicemails so that they can screen calls and call me back (but then refusing to call me because of my international phone number); or who demand that I essentially do their job for them by arranging billing with medical insurance companies.
But these are minor issues compared to the emotional weight of dealing with my parents’ resentment at their loss of financial independence. This was a resigned resentment; my mom willingly signed over her Social Security payments to my representative payee account, and my stepdad often thanks his daughter and me for taking over the finances. But that doesn’t mean it’s been easy for them. In the course of a year, my stepfather and I switched roles; he used to give me $100 every time I saw him, and now it’s the reverse. My parents’ pride suffered, and I’d be lying if I said I didn’t also occasionally give in to resentment.
Other people’s mileage may vary when it comes to the practical steps of taking over parental finances, but the psychological impact, I suspect, is universal. Bills can be paid, debts can be cleared, but relationships are living things.
Christine Ro writes promiscuously at ChristineRo.com, but is faithful to The Billfold when it comes to writing about money.
This story is part of The Billfold’s Parents Month series.