So--now I've got DPOA for Dad. What do I do next?
So, my 91yo dad (depression, Parkinson's) was diagnosed with 'moderate cognitive impairment' in mid April. He's currently in a geriatric psych ward (for the next 1-2 weeks), but, fortunately, I had already gotten health care proxy and POA signed, and my name is on his checking account. We've got most of his finances under control, but I have a couple of questions...
1. Can/should I cancel his credit card? I don't believe he has it in his possession any more. I'm assuming we will need to pay the balance if we do? And how exactly do I cancel it?
2. The good news is that he has longterm care insurance, and I'm told they will be sending him a check pro-rated for the premiums he paid while in the 90 day deduction period. With POA, would I be able to cash that check and deposit it into his account?
3. We established a revocable trust for the house; our elder lawyer has suggested getting bank accounts in the name of the trust. There's only $10K left in checking, so I'm not sure it's worth the trouble--and Dad's got a home equity home loan, and I'm not sure how to handle that.
Any suggestions appreciated...
31 Answers
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2. Read the LTC policy carefully, avoid mistakes.
3. If you are going to ignore the lawyer, you might regret it later.
4. Home Equity---again, read the terms carefully, avoid foreclosure. If the house is going to be sold, the loan will be paid off at the closing. Your lawyer will get a closeout figure and take care of that.
5. I hope your name is on there only as a signatory and not as a joint account. If it is joint, his bad credit rating could become your bad credit rating.
Paying the card down and off would be the right thing to do, if the funds exist to do so. To cancel, call the number on the credit card statement and tell the customer service representative that you want to cancel the card. If you're an authorized signatory, the issuer should be able to accept that direction.
Since you're joint on the checking account, you should be able to just deposit the insurance check in the account. But do you want to cash it, as in get it in dollars, or do you want to deposit it? I'd deposit it; you never know when the funds might be needed.
Having a trust checking account depends on how the trust is funded, whether it receives regular income, and who the joint or successor trustee is. Given that your father likely wouldn't be considered able to manage the funds, the successor trustee should have signatory authority to open the account (read the POA terms), unless succession occurs only on death.
If there are any funded assets producing income now, you will need a specific trust account for depositing them. We went through that. The bank will want a copy of the trust and ancillary documents (such as Certificate of Trust Existence and Authority). Banks are particular about segregating trust and nontrust funds.
You might find that there are overlaps between your authority as POA proxy and Successor Trustee. It wouldn't hurt to clarify these with your attorney, but if the documents are clearly drafted and funds segregated between trust and nontrust funds, this issue might not be problematic.
The home equity loan payments raise an interesting question. If the house was funded into the trust (i.e., retitled in the name of the trust), then payments probably should be made from a trust savings or checking account.
If the house was NOT retitled, and therefore not funded into the trust, the HELOC payments should be made from the checking account and not from trust funds.
If this doesn't make sense, just say so. Sometimes it's hard sorting out these issues mentally. I have to go over our own issues a few times to make sure I've gotten them straight!
The same issue may apply to property taxes, another reason to keep the credit card if the taxing authority takes credit card payments (some do, some don't).
My elder attorney says that trusts MUST have their own active financial account. For a trust to be taken seriously and the house is in the trust, you must show that the taxes paid on it and normal maintainance come out of the trust account. Please do not ignore your attorney. Sure it sounds like unnecessary paper work, but later you may be glad you did it. Additionally, you always need a good legal advocate! (He can coach you and BACK YOU UP while straightening all these things out!)
As a matter of fact, 6-7 years ago he started to take some of his coin collection to the bank to cash them in! When he actually closed out his accounts (forgetting about his SS direct deposit), we were lucky that he "fessed up" and were able to open new accounts with myself as joint owner. He then added me to his 1 remaining credit card account (authorized signatory only). And fortunately, we were able to contact an elder care attorney to obtain DPOA/MPOA before it became too late.
This attorney advised us, before it becomes a critical issue, to consider "spending down" remaining assets for things like funeral expenses, home repairs/appliance replacements, safety measures and anything else that might make Dad's home a safer or more comfortable environment. Done!
We also keep additional copies of DPOA/MPOA at the ready for un-anticipated circumstances when that info might be needed.
At this point, with Dad's advancing dementia and declining bank balance, he will be rapidly approaching Medicaid intervention should any additional health issues require care in addition to what we are able to provide and we are confident that there will be few complications, if any.
Although we try to keep a step ahead on medical and financial issues, we find that there are surprises at every turn. It is comforting to know that we are in good company and not alone in trying to keep Dad safe, healthy and as happy as he can be at this time in his life.
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