By TODD KOCKELMAN
Every eighth American age 65 years and older has Alzheimer’s disease, and 43 percent of Americans age 85 and older have it, according to the Alzheimer’s Association. Consider those percentages in light of the Social Security Administration’s estimate that about 25 percent of today’s 65-year-olds will live past age 90. These shocking statistics have serious implications for family wealth.1,2
What are your options when it comes to helping a parent with money management? Informally, you can "lend a helping hand" and check in with mom and dad to make sure that bills and premiums are paid and deadlines are met. But if you elect to formally take the financial reins, you are looking at a two-phase process:
You can get a power of attorney and assume some of the financial responsibilities. A power of attorney is a detailed, strictly constructed legal document that gives you explicitly stated measures of financial authority. If you try to handle financial matters for your parent(s) without a valid power of attorney, the financial institution involved may reject your efforts.3
A durable power of attorney lets you handle the financial matters of another person immediately. The alternative – a springing power of attorney – only takes effect when a medical diagnosis confirms that person’s mental incompetence. Copies of the power of attorney should be sent to any financial institution where your parents have accounts or policies. It might be wise to get a durable power of attorney before your parent is unable to make financial decisions; many investment firms require the original account owner to sign a form to allow another party access to an account owner’s invested assets.4
You are going to have to hunt for information, such as:
Where mom or dad’s income comes from (SSI, pensions, investments, etc.)
Where the wills, deeds and trust documents are located.
Who are the designated beneficiaries on insurance policies, IRAs, etc.
Who are the members of mom or dad’s financial team or circle. You need to talk with them; they need to talk with you.
The crucial numbers: checking and savings accounts, investment accounts, insurance policies, PIN numbers and of course Social Security numbers.
It will also help to learn about their medical history and prescriptions.
If the disease progresses to the point where your mom or dad can’t make competent financial decisions, then you are looking at a conservatorship. In that case:
You can act to become your mom or dad’s conservator. This means going to probate court. You or your parent can initiate a request for conservatorship with a family law attorney; if the need is more immediate, you or your family’s attorney can petition the court. In either case, you would need to show documentation that your parent is no longer financially competent. You must provide medical documentation of his or her dementia to the court as well.
The court will interview the involved parties, look at the documentation and perform a background check on the proposed conservator. This is all pursuant to a hearing at which the court presents its decision. If conservatorship is granted, the conservator assumes control of some or all of the protected party’s income and assets.5
How do conservatorships differ from guardianships? A guardianship gives a guardian control over many aspects of a protected person’s life. A conservatorship limits control to the management of the protected person’s assets and financial affairs.5
What if I don’t want to assume this kind of responsibility? Some wealth management firms offer daily money management as an option in a "family office" suite of services. The firms make home visits to help with bill paying, filing medical claims and other recurring tasks; carefully scrutinize anyone offering this service. (Visit aadmm.com for the American Association of Daily Money Managers).6
The other choice is to give a relative, financial services professional or a family lawyer durable or springing power of attorney or limited or full conservatorship. Such a decision must not be made lightly.
Keep your parents away from unprincipled people. These steps may prove essential, yet they will not shield your family from scam artists. Be on the lookout for new friends and acquaintances. If your instincts tell you something is wrong, investigate.
Todd Kockelman, President of K-F Financial, is a registered Representative with Packerland Brokerage Services Inc., and may be reached at 651-204-0655 or [email protected].
1 – www.alz.org/downloads/facts_figures_2011.pdf 
3 – www.law-business.com/powers-of-attorney [4/27/12]
5 – dhs.sd.gov/gdn/guardianshipfaqs.aspx [6/2/12]