Helping a Disabled Relative

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Ducks
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Helping a Disabled Relative

Post by Ducks » Wed Nov 28, 2012 2:48 pm

Hi Bogleheads, I was hoping you folks might have suggestions for me on how we might go about helping a mentally disabled relative. Here's the situation.

He is a ~50 year old man who is somewhat mentally disabled. "Somewhat" in that C can take care of his day-to-day needs, but he is unable to plan even a little bit when it comes to finances. He misses dr.'s appointments because he didn't have money for the bus, probably because he took himself to Starbucks and the Movies the day before. His income is Social Security. My dad has bought him a condo, and we send him groceries about twice a month. His expenses are his condo dues, utilities, and personal items. He has one minor daughter who lives in the same area but not with him who he might want to buy a birthday present for. This sort of thing.

So what happens is that he blows through his social security check on who knows what -- eating out, etc. -- and then calls my dad for money, which annoys my dad, who feels like he already gave him a roof and groceries, so he really should be able to do the rest of it on his own. Except that he can't. He will (and has) overdraft his checking account if he's able. I don't think it's malicious, but I think he uses his ATM card and thinks if the charge goes through there must be money there, and when there isn't, he overdrafts, the bank gets angry with him and takes it out of his next check, and so he's already spent half of his next check, etc. and so on.

I told my dad that if he wanted to turn the situation over to me to run, I'd deal with it, but things would get a lot harder for for him, because I would put him on a pretty tight budget.

What I need are ideas for budgeting mechanisms for someone who is not living with you on a day-to-day basis and needs hardfast limits aside from just telling him not to overspend. I can get him a bus-card and load some money on it so he will always have access to transportation. But handling spending money, I'm not sure how to do? I could send it to him in the mail, but that's not a great idea, and visa gift cards want to charge $5 right off the top. Are there bank cards that won't let you overspend? Or is this something they all want to ding you for overdraft and reap the rewards in fees?

I appreciate any advice you have.
Last edited by Ducks on Wed Nov 28, 2012 3:41 pm, edited 1 time in total.
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ddunca1944
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Re: Helping a Disabled Relative

Post by ddunca1944 » Wed Nov 28, 2012 3:05 pm

Your relative is fortunate - both for the roof and the groceries that your dad provides, and for your willingness to help. The idea of a bus card for transporation is a very good one.
For his cash flow issues, I'd consider a debit card that he can use to pull cash out (assuming he can use an ATM). But I'd set it up so that if there is no money in the account, he will be declined so it would not incur fees. Anymore, you have to "opt in" for overdraft coverage which entails those outrageous fees. So all you (or he) would have to do is make sure he isn't opted in.
You could deposit money to the debit card on a regular basis, perhaps weekly.

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dm200
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Re: Helping a Disabled Relative

Post by dm200 » Wed Nov 28, 2012 5:31 pm

So what happens is that he blows through his social security check on who knows what -- eating out, etc. -- and then calls my dad for money, which annoys my dad, who feels like he already gave him a roof and groceries, so he really should be able to do the rest of it on his own. Except that he can't. He will (and has) overdraft his checking account if he's able. I don't think it's malicious, but I think he uses his ATM card and thinks if the charge goes through there must be money there, and when there isn't, he overdrafts, the bank gets angry with him and takes it out of his next check, and so he's already spent half of his next check, etc. and so on.
Isn't this a strong indication that there might be a justification/need for a "Representative Payee" for the Social Security? I would consider checking with Social Security about such a setup. A "representative payee" account can not be accessed by him.

This is the link to the relevant SS site http://www.ssa.gov/payee/index.htm

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deanbrew
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Re: Helping a Disabled Relative

Post by deanbrew » Thu Nov 29, 2012 9:58 am

My wife's family is in a similar situation. My BIL thinks if he goes to the ATM and takes out $50 and the slip says the account balance is $1,000, then he has plenty of money, and doesn't hesitate to take more out the next day or a few days later. In reality, he has monthly expenses for utilities, cable, gasoline, groceries, etc., that he doesn't think about when he sees the checking account balance. He ran up credit card debt, and he thinks of the minimum monthly payment as "paying his bills", even though he is paying 20+% on the debt. When my wife finds out my BIL has taken extra out of the account, he tells her he needed money for a restaurant or bowling or something and he has plenty of money in his account. She then reminds him there are outstanding checks that haven't cleared yet, as well as bills due, so he really doesn't have all the money in the account. This happens every week or two, and he just doesn't understand why the slip tells him he has money in the account and his sister is telling him something else.

After finding out about the CC debt and monthly restaurant spending, my wife has taken physical custody of his checkbook and is helping him to pay down the CC debt and monthly bills, and tells him how much he can take out of the ATM, spend at restaurants, etc. every week. Similar to the OP's relative, my BIL's house is owned by a trust, and another trust pays his health insurance. So, those two big expenses are taken care of.

It sounds as if the OP's relative should not have a credit card or ATM card, and a responsible relative should have control of his checking account to pay the bills and give him a certain amount of cash each week. If using a card is preferable, perhaps the SS check and any other income could go into one account that has no card, and a certain amount is moved weekly into another account that has a debit card. That way, the relative could only spend what was in the second 'cash flow' account and nothing more. I know my bank allows me to have several checking accounts, and I can move money from one to the other online instantly - and could probably set up a recurring transfer if I wanted. I don't use a debit card, so I don't really know if you can overdraw an account with one, or if you can set up an account so that it can't be overdrawn or run up fees.

I know there are prepaid "credit" cards which can be loaded with money, but again I don't know the details regarding overdrawing those cards or the fees. I'm thinking cash on a weekly basis might be the best idea.
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Ducks
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Re: Helping a Disabled Relative

Post by Ducks » Fri Nov 30, 2012 7:45 pm

I got some good advice on this thread and via PM, and I've appreciated everybody's suggestions. I'm still processing it, but here's what we've done so far.

- My dad has informed him that I'll be handling his financial needs from here on out. He is unimpressed by this new change.
- I've opened up an account at Wells Fargo (I even got a pony! :D), where my relative does his banking, in order to easily fund his account when he needs it.
- I've researched qualifying for a reduced fare bus card through our city's transit.

I did find out that what is happening is that he is taking draws on future checks every month (which no doubt the bank dings him for), so that is how he is always in arrears. He pulls it out in cash, and pays for things in cash, not via ATM. He has been doing this for ~5 years. He used to pull out $400/month (the max allowed by the bank), but my dad has slowly gotten him down to taking out $200/month. I'm considering whether to pay this extra $200 and just say "no more draws!" or let the bank ding him a few more times while he takes smaller and smaller draws until he's done.

Two thoughts:
1) The homeless people you see on the street are my relative, who don't have family who support him the way we do.
2) If there was no online grocery delivery, this would be a LOT more difficult. Thank goodness for technology.
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celia
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Re: Helping a Disabled Relative

Post by celia » Fri Nov 30, 2012 10:41 pm

ddunca1944 wrote:For his cash flow issues, I'd consider a debit card that he can use to pull cash out (assuming he can use an ATM). But I'd set it up so that if there is no money in the account, he will be declined so it would not incur fees. Anymore, you have to "opt in" for overdraft coverage which entails those outrageous fees. So all you (or he) would have to do is make sure he isn't opted in.
You could deposit money to the debit card on a regular basis, perhaps weekly.
I would do something like this. Use the original checking account to auto-pay regular bills, such as utilities. Give him an ATM/debit card for another checking account where an automatic move of $x each week goes from the original checking to the new "cash-withdrawal" checking.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

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