| Dear Mr. Premack: I live in Texas but my Mom
lives in N.C. She is beginning to have difficulty handling her financial
affairs, neglecting to pay her bills, losing checks, and even forgetting
that she moved a large amount of money to another bank. I had thought a
trust administered by her bank would be good, but she is not happy with
this. Currently, I am joint owner on all her accounts and have a durable
power of attorney, but I have found from talking with these varying banks,
savings and loans, and credit unions that their rules differ. I don't want
to simply change everything over to my name only, because I don’t want to
incur the tax nor hamper Mom's ability to write small checks. What can I
do long distance to safeguard her from herself? -- S.C.
The fact that your mother has already created a durable power of
attorney and has already listed your name as cotenant on her account is
immensely helpful. This gives you the legal authority that you need to put
together an action plan and to implement it.
The idea you suggested to your mother, using a trust, is actually a
very good one. She is hesitant to give up management rights by letting the
bank’s trust department make all her decisions (which is very
understandable). Look into this alternative: get a N.C. attorney to create
a revocable trust for her assets. In it, she can name you as Trustee (so
that you have management rights, but do not have tax problems). The trust
should specify that all its resources are dedicated to her care.
After she signs the trust, work with your mother to change all her
accounts out of her name, individually, and into the name of the Trustee
of the trust. The banks will be happy to set up the accounts that way, and
you will be rid of the hassle of dealing with each institution’s differing
policy on durable powers of attorney.
At the same time, leave one checking account outside the trust (so that
it is still in your mother’s name and your name, individually). That is
the checkbook she’ll take to the grocery store, and you can transfer money
into as needed from the trust (but in small enough amounts to minimize the
risks).
When you select the bank, be sure they offer some type of Internet
banking arrangement. Some banks have signed-on with the two major retail
accounting software packages, Quicken™ and Microsoft Money™. These
programs can get pretty complex, and some banks opt to use their own
systems that work directly over the Internet.
Either way, you will then be able to monitor your mother’s spending on
a daily basis. Using your home computer, you can balance her accounts,
verify that her bills are being paid – even pay her bills directly from
her accounts. You can transfer money, monitor her spending, and generally
keep an eye on her finances even though you are in Texas and she remains
in North Carolina. |
