GAH! MIL changed her mind. How can we manage her finances and protect ourselves?

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Just when I thought I could have some piece of mind. I have posted before.... MIL has not been successfully managing her finances and was looking to us for help. When she resisted letting us know what her cash flow was, we withdrew our help. That was last fall. Now she is behind again, has unpaid tax bills and turned to us again. Again I expressed that if she needed continuous help, we needed to be more involved. I finally came up with a plan that she accepted. We would create a separate account for bill paying, which we would manage. Her SSI check would get divided between the two accounts; we had worked out the amounts so that she would have money in her original account for just groceries, incidentals and cash; this account we would let her manage. The rest of the funds would go into the bill paying account. She seemed to be comfortable with the amount that would be left under her control; the amount going into the bill paying account would not quite cover everything, but the amount we would end up supplementing was more comfortable for us. When I went to the bank to ask how to go about setting this up, they said we would first need to obtain power of attorney to do this. Yesterday she was ok with this. Today she called a legal resource who advised her not to sign the POA - that it was something done when someone was determined to be incompetent. So she's changed her mind. Yet she seems to like not having to manage the bills.She wants to just write us a check each month - the same amount that would have gone into the bill paying account. We would deposit into one of our own accounts and we would pay bills from there. So at least she is accepting of some financial management help. But I am worried that this arrangement, in the absense of POA, would also leave us vulnerable. My husband only has one sibling who has not been directly involved as much. Would we end up getting accused of taking her money? Should I have MIL sign some kind of agreement/contract stating she is giving us this stated amount each month, of her own free will, for us to manage her bills? Any advice would be appreciated.

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Be aware that if you set up an online account and for some reason get locked out ( new bank takes over and changes website for example) and the older person cannot remember their security questions, the only way you will be able to get back in is to give the bank a POA.
Another option is the be representative payee ( SS or SSI) and this is the web page:https://www.ssa.gov/payee/faqrep.htm
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'IsntEasy' - He's a real estate appraiser and the fees to belong to various orgs and the E&O insurance are what outweigh his income. I agree that he won't know what to do with himself unless he works. My MIL is very controlling and he has no hobbies. Maybe he has to work or else she'd drive him crazy (although he is an excellent husband to her). Its not my kids, its my FIL's kids (as in my hubby and bro/sis-in-law) who bail their parents out a few times a year. It is coming to a head, that's for sure, which is why I appreciate reading the questions and answers here.
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'tikihit' – I'm just curious...what line of work is your FIL in that he has expenses greater than income??
I bailed my parent out more than once until I finally realized that I was just enabling a bad situation. Chances are your FIL isn't getting a sense of self worth out of "working". It's just that he doesn't know what else to do with himself. That's not uncommon for elderly men.
If your kids are shelling out thousands of dollars a year, they are either very well off for young adults or they are sacrificing some of their own future financial security to indulge their grandparents' reluctance to reign in their wastefulness.
Sounds like dementia. A rational business man (as I assume your FIL once was) would see that he's throwing away his money and would not want to be bailed out by his grandchildren.
We had to have a 'day of reckoning' with my Dad to get him to turn over control of his finances. He did so reluctantly, but after a few months wanted nothing to do with bill paying and bank statements. He doesn't even open his mail now. He leaves it in a pile for me. I think it's been a real relief for him to not have to worry about it because it confounded him. I've found that to be the case with virtually every person I know who had to battle with their parent over finances.
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These forums are so helpful.

I'm not quite to the same point y'all are but 2 of the 4 kids (other 2 have no extra $$) have to bail my in-laws out of trouble a couple times a year to the tune of $4k or so. Mostly because my 80'yr old FIL refuses to stop 'working' altho his income doesn't come close to matching his business expenses and when we tried to help them budget we discovered they had hid various expenses from us. Further offers to help budget are met with resistance.

We don't want to force FIL to stop 'working' for fear he will lose his vibrancy.

My MIL spends hundreds of dollars on unproven herbal and homeo'pathetic' supplements.

Right now, we figure it is a small price to pay for my FIL feeling like he contributes to society.

I read your questions and answers knowing that these situations are coming our way at some point. Thank you for your honesty, people!
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I think it's a really good idea to keep her informed, being "in the know" might make her feel "in charge" (even though of course she isn't actually DOING anything). My Grandmother was similar (Aunt who took over bill-paying is 40-yr accountant who regularly works with million-dollar-month payroll -- STILL took convincing! Sheesh!). We did find that she soon lost interest in following the bills once she hadn't had to worry about them for a bit, so maybe once your Mom can see that everything is being taken care of she'll be glad to let it just happen on it's own (ie you taking care of everything LOL). At least you got the will done -- we kept hearing "I'll be dead anyhow, so it doesn't matter to me!" ARGH! Finally found a great semi-retired Estate attorney in a rural area who had figured out that the easiest way to get people do do trusts is to have a flat rate (Big estate, small estate, family gets along/doesn't get along -- doesn't matter. $495. ). That was my Christmas present to my parents one year, & when my Gma found out how inexpensive it was she got one to! Hoorah! Problem solved!. That cascaded (with some pressure from my aunt) into DPOA, co-signed accounts, & FINALLY we got everything in order. It definately helped that my Aunt, Uncle & Mom were all on board, working together, & only concerned about Gma's care - they are all OK if every dime of her money is spent on her care, as long as it isn't being wasted.
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Another update. First, again thanks to all for your replies, suggestions, and insight. I think I have gone through the most stressful week in my life and this forum definitely helped me through it.
good news. Went over to MIL's today, and she actually had all the envelopes of her bills all organized for me. She basically said, however you want to handle these, I won't interfere. She did indicate the key ones that she doesn't want to be late on, even if I have to play the game of "catch up" on some of the other ones. So it was a good afternoon, I was able to get everything organized and the game plan set up. Her SSI check doesn't get deposited til the end of next week, but after this afternoon I don't anticipate any resistance when it comes time for her to write out the check that will get deposited into the separate account we've set up for paying the bills. I also told her I would keep her posted on the status of things, so she won't be left in the dark, and she will know the general state of her affairs. She actually seemed to be a bit relieved.
What I am hoping for now, is that this will ease the way for a future conversation about a DPOA, to try to gain her understanding of establishing this before her mental/physical situation worsens. Good point from horserider that we should point out that this is something she can change her mind about while she is still competent. She does have her will all set, so that's taken care of.
One step at a time.......
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Patathome01 -- since you are looking at 2 years of spend-down have you considered having your mother "pay" you for some of the things you will be doing for her over the next two years (reasonable rates only!) so that you can put some of that money into an account (NOT in her name) for her after-medicare-kicks-in extras? I think you may have to have a talk with your Mom in a few months about the situation to figure out what things you CAN spend on that she can keep without worrying about claw-back from Medicare. Good bed (the ones with pulsing air that prevent bedsores!), good shoes, etc. might be on the list since Medicare can hardly call those extravagent.
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"that might not stick"...ie she might not believe the "real" lawyer -- better chance if SHE chooses the lawyer via recommendation of a friend or whatever.
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Wonder if what she heard was what was actually said. Agree with former poster that suggested a REAL lawyer, though that might not stick. The suggestion about WRITTEN CHECKS put into the account sounds like a really good one.
I don't think your Mom's judgement is good anymore, & that makes me think that the lawyer stuff (DPOA, trust, will, etc.) needs to be in place sooner rather than later. She CAN back out of POA while she is still competant, so maybe the knowledge that she can back out will get her to sign (and then you hope for apathy of her never getting around to changing it).
Best of luck!
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PatatHome01
You have my support. My mother is also very self centered (narcissistic) and independent. At 101 she still manages her finances, and does a good job. I have POA (Canadian so durable and both medical and financial). We do not have Medicare and Medicaid as in the US, but I do foresee some battles in the future, unless she passes while still having the capabilities/resources she has now. I have suggested that she put me on her accounts so I can "keep an eye on things". as she has been thinking people are "stealing" from her. She has some paranoia, though does not have dementia, but has BPD. She is 5 hrs drive away so I will try to set up online banking. At some time she may accuse me of interfering with her accounts/finances and I will deal with that if it comes. Even two years ago she would not have accepted this suggestion, but, although pretty healthy, she is not as strong as she was 2 years ago and knows it. I have said that this is just in case she needs the help. Should she come towards the end of her financial resources, or needs nursing care, it will be a battle, I know, as she would have to move out of her ALF (where she gets maximum care available now) into a nursing home -something she dreads. She has already said that if her money runs out she expects my sister and myself to supply the difference. It is not going to happen. I am retired too, and although fine financially, cannot afford to support someone else. It is difficult I know. Take one step at a time, go over one hurdle at a time. I have decided that I cannot afford to worry too much about what may come for her or for me, but just make sound decisions for today, keeping the future in mind but not worrying about it. Mother always gets mad about something, but I can't let that drive my decisions, so I have detached emotionally. Do what you think is right and if she gets mad, so be it.
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