With power of attorney, you can monitor mom's credit
By Erica Sandberg
May 22, 2015
We just learned that my mom is in the early stages of Alzheimer's. I'm in the process of taking over the management of her accounts, but it occurred to me that maybe I need to be paying attention to her credit, as well. Is there someone I should contact to let them know she has dementia? Are there ways to keep her (or someone else) from opening accounts I don't know about? Any advice would be appreciated. — Juanita
Oh, what a difficult position to be in. As much as you probably do not want to assume all of your mother's financial affairs, she too may be loathe to give up control. However, it is smart and caring to prepare for what could happen as her state deteriorates — she could make harmful credit decisions. This way you can offset serious problems.
Since you're taking on Mom's financial duties, make sure you obtain what is called a “durable power of attorney for finances.” In the absence of that, your words will have no weight with her existing and potential creditors. She's an adult and can make her own choices.
For you to get power of attorney, ask your mother if she would like you to act as her agent so she doesn't have to worry about debt and bill paying. Posing the offer in a kind way can lay fears of economic abuse to rest. Also, make it abundantly clear that you love and respect her. Your aim is to simply ensure that she is protected.
In the event that she says no, but her Alzheimer's takes a turn for the worse, it is possible to force the matter. Your mother would have to be deemed incompetent by the court. Her doctor would play a large part in that determination, so if you really feel that this is the direction you'll be going, begin the discussion. After that, you'll have to involve lawyers who specialize in these proceedings.
If you are awarded power of attorney, you will possess authority to handle all of your mother's financial affairs. What does this mean? Pretty much everything you do with your own money and credit management system. For example, you can open her mail, send payments using the cash in her checking account, contact creditors on her behalf and check her consumer credit reports. If she tries to open new accounts, you'll know about it, and can contact the lender to close them. You'll also be able to monitor it for fraud. You can pull credit reports annually for free at AnnualCreditReport.com.
You can also “freeze” her credit reports. This tool, which you would sign up for on the credit reporting agencies' websites (for a fee), restricts lenders' access to credit reports. Without seeing what's on her file, they can't grant the card or loan.
You can also hire a daily money management company. Of course, you will need to tell her (and if you don't get power of attorney, her buy in), but many people find it a lot less aggravating to deal with a third-party than a close relative doing the job, which can feel like a hostile and insulting takeover.
Explain it to your mother as you would hiring a housekeeper to keep a tidy home. Sure, she can get down on her knees and scrub the floors and wash the dishes, but why not let an expert jump in so she can enjoy her leisure time?
Daily money managers help senior citizens and younger folks alike with basic personal finance duties, including bill paying, monitoring a budget and negotiating with creditors. There is a monthly cost from as low as $25 to as high as $100 per hour. Most clients sign up for a couple of hours of monthly management time.
There are many companies that provide this service, so don't just focus on the price. Identify one that has been around a long time and has an excellent rating with the Better Business Bureau. The best place to start is with the American Association of Daily Money Managers, as this association can provide a referral to a certified member of the organization. When you work with a daily money management firm, you may be listed as a client on your mother's paperwork. If she does try to open a credit card account, you will be alerted and can deal with the situation immediately.
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