dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

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cas
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dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by cas » Tue Sep 12, 2017 9:46 am

Like many of you, I have Power of Attorney for elderly parents. (I also am trustee of their revocable trusts, but that probably isn't relevant to this post, which is a question about credit freezes and other identity security measures.) One parent already has moderate dementia. The other parent is fine now, but family history says dementia is a distinct possibility in the future.

Does anyone have any experience with how extra identity security measures for my parents, like credit freezes or the IRS tax return PIN, might interact with me trying to deal with their financial affairs using the POA, if that becomes necessary in the future? (Obviously *I* need to know what their PINs are. But beyond that.)

My parents have discussed getting their credit frozen with me before, but we were always a bit leery of possible unknown, unpleasant side effects of frozen credit if they developed dementia, and I was running their financial affairs. (For example ... suppose I need to unfreeze their credit (application to assisted living or some such?) and encounter some sort of problem with the process. Would the credit reporting agency be willing to talk to somebody with POA to try to resolve the problem? Or would they just tell me it was illegal for me to be trying to unfreeze someone else's credit, regardless of POA? Or would they tell me there was some special in-house form my parents were supposed to have filled out while they were still competent in order to make me an authorized agent? Or ???)

This Equifax thing has lit a fire under our tails on the credit freeze issue again.

I've also looked into the IRS PIN that makes tax return fraud more difficult, and they are eligible to get one. (They live in a place (Florida, Georgia, District of Columbia) with the pilot program that allows anyone - no prior identity theft necessary - to get a PIN.)

But, there have been plenty of reports of people encountering problems using POA with basic stuff like bank accounts. I'm worried about getting into a tangled mess trying to use POA with less common stuff like credit freezes and tax PINs. Of course, identity theft would be a worse tangled mess.

(Both parents are currently capable of putting the credit freeze on for themselves. (Probably. I'd probably have to be sitting with them helping them with the online stuff.). I wouldn't need to initiate the credit freeze/IRS PIN as POA. I just might need to administer them in the future.)

Any insight into how all this plays out in the real world? Thanks so much.
Last edited by cas on Tue Sep 12, 2017 6:36 pm, edited 1 time in total.

pshonore
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by pshonore » Tue Sep 12, 2017 10:21 am

As far as a strategy for tax returns, the best may be to plan withholding to owe a very slight amount of tax (no refunds).

furwut
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by furwut » Tue Sep 12, 2017 10:30 am

pshonore wrote:
Tue Sep 12, 2017 10:21 am
As far as a strategy for tax returns, the best may be to plan withholding to owe a very slight amount of tax (no refunds).
Familiarize yourself with the safe harbor rules. I use the previous years tax owed as my guide. This works well so long as your income does not widely vary year to year.
Last edited by furwut on Tue Sep 12, 2017 11:08 am, edited 1 time in total.

furwut
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by furwut » Tue Sep 12, 2017 10:33 am

Re bank accounts:
Is setting up joint accounts with you a possibility?

cas
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by cas » Tue Sep 12, 2017 10:51 am

furwut wrote:
Tue Sep 12, 2017 10:33 am
Re bank accounts:
Is setting up joint accounts with you a possibility?
The revocable trust/trustee set-up takes care of most financial accounts.

But being trustee isn't applicable to much of the other administrivia of financial life, like credit, taxes, utilities, insurance, etc. In theory, DPOA takes care of all the remaining financial administrivia, except that in more recent years people are reporting that real life experience does not match legal theory, and their DPOAs are being refused.

NotWhoYouThink
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by NotWhoYouThink » Tue Sep 12, 2017 11:03 am

Keep in mind that your having POA does not keep them from acting on their own. You'd have to have conservatorship for that.

cas
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by cas » Tue Sep 12, 2017 11:05 am

pshonore wrote:
Tue Sep 12, 2017 10:21 am
As far as a strategy for tax returns, the best may be to plan withholding to owe a very slight amount of tax (no refunds).
It would be nice if this strategy was possible, but my parents belong to a generation that did most of their saving and portfolio construction before 401(k)s or index funds (or Vanguard) existed. They made many good, reasonable decisions given the environment they had to work with, but it all adds up to highly unpredictable, variable taxable income (some not known until after the final estimated tax payment is due) in their old age. Gotta go with safe harbor estimated tax rules.

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Runaway
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by Runaway » Tue Sep 12, 2017 11:12 am

Best wishes for what you are going to need to deal with. At some point you may need to become a legal guardian or conservator, every state is different. We went to an attorney that specializes in "elder care" and got some great advice and help with developing a plan. Money well spent and not all that expensive, we could also have found that same information with lots of research and study.

Even with a plan, we ran into lots of roadblocks with finances and institutions, each one required a different set of bureaucratic jumps to gain what we wanted. They are dealing with the same issues daily with the aging population so it's never the first time, just time consuming YMMV.

cas
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by cas » Tue Sep 12, 2017 11:27 am

NotWhoYouThink wrote:
Tue Sep 12, 2017 11:03 am
Keep in mind that your having POA does not keep them from acting on their own. You'd have to have conservatorship for that.
Right. But my question in this particular post is dealing with the situation I've been seeing my older cousins dealing with, where a parent is physically (e.g. stroke) or mentally (e.g. dementia) unable sign documents, look at a computer, talk on the phone to customer service, leave the house, or otherwise deal with their financial affairs. A DPOA (in theory) does allow someone else to deal with many financial affairs in that situation. My question is whether credit freezes/thaws and talking to credit bureau customer service falls under the umbrella of things that can be administered with a DPOA. (And more particularly, whether people have real life experience with this. For example ... in theory, bank accounts can be administered using a DPOA, but in real life people have been encountering increasing problems with banks rejecting the DPOA and requiring agent authorization using their own in-house forms.)

(My question in this particular post isn't dealing with another common dementia situation, which is the elderly parent acting on their own and getting themselves in financial messes.)

However, if what you are saying is that a credit freeze can not legally be lifted (or credit bureau customer service talked to) unless someone has conservatorship (i.e. legally, DPOA is inadequate), then that is exactly what I need to know. But I don't think that is what you were saying?

ResearchMed
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by ResearchMed » Tue Sep 12, 2017 11:33 am

The problem that increasingly worries us is how more and more financial institutions will not accept a valid DPOA (same problem could occur with an SPOA: D= Durable; S=Springing) unless it is on their "own" form.

And this is despite some state laws mandating that any valid PoA must be accepted by a company doing business in that state.
Poster Child/Business here is Vanguard.

[And no, it is NOT correct that Vanguard's own forms provide *all* of the same actions using Vanguard's own "Agent Authorization". This is a problem with 403b plans, and perhaps other types of accounts. It is not possible even to see the 403b account holdings of the incapacitated person at Vanguard, if one is logged in as "agent". If one wants to "check balances, e.g., "as agent" for any unauthorized activity, or the history, one must have a Vanguard rep read line by line, date by date, all of the individual transactions, including every monthly dividend, short or long term cap gain, balances, whatever. And then the Agent must verbally request that any desired transaction be made, and get a verbal "okay, it's done"; no way to "see" that the accounts reflect what was requested... without calling in again, etc. Vanguard flat out and explicitly REFUSES to abide by the PA law, effective for a few years now.
Of course, if the person is still competent, one way to deal with this is to have the person "sit there on the computer, logged in as self..." :wink:
Then the full account screens are obviously visible. But that rather obviates much of the advantage of the PoA in the first place, and it won't work for someone already incapacitated.]

:annoyed

There are also other financial institutions that require their own PoA forms, but at least those forms, once accepted, will provide FULL 'Power of Attorney" access, not just limited access.

--> But once the person is incapacitated, it's obviously too late to complete the specific preferred "own form" from specific financial institutions, even so that accounts can be transferred to a vendor that *does* allow full PoA access, etc.
So try to identify *al* financial institutions (including insurance and ?) to make sure that the DPoA/SPoA forms are completed on the specific papers required, and that the forms are accepted/filed prior to some later need.
For plain vanilla PoA's while person is still "capable", it's an inconvenience, but not a sort of temporary dead end (one that might later require legal assistance).

RM
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cas
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by cas » Tue Sep 12, 2017 11:50 am

ResearchMed wrote:
Tue Sep 12, 2017 11:33 am

--> But once the person is incapacitated, it's obviously too late to complete the specific preferred "own form" from specific financial institutions, even so that accounts can be transferred to a vendor that *does* allow full PoA access, etc.
So try to identify *al* financial institutions (including insurance and ?) to make sure that the DPoA/SPoA forms are completed on the specific papers required, and that the forms are accepted/filed prior to some later need.
For plain vanilla PoA's while person is still "capable", it's an inconvenience, but not a sort of temporary dead end (one that might later require legal assistance).

RM
What ResearchMed said is what I'm trying to get at for the specific case of credit freezes and IRS tax PINs.

Have other people run into situations where it seemed at one time like a good idea to put these identity theft protection measures into action for an aging person, but then time went on, the aging person sadly became incapacitated, and the person in charge of admininstering their financial affairs found themselves "stuck" due to the credit freeze or IRS tax PIN? And, potentially, the person with DPOA was left saying "I wish we had just left well enough alone, not gotten the credit freeze/IRS PIN, and just risked identity theft."

Or, conversely, any experience with "No problem at all. With DPOA, was able to thaw credit, talk to customer service when there was a problem with the PIN, etc. etc. The credit (or IRS PIN) people have already long since figured out how to deal with DPOA situations."

dbr
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by dbr » Tue Sep 12, 2017 11:59 am

There are multiple areas of transactions that a DPOA will not help with including (correct me if I am mistaken)

1. Any transaction with the IRS.
2. Any transaction with the Social Security Administration
3. Any transaction with Medicare/Medicaid
4. Attempting to retrieve documents such as birth certificates, record of military service (except a surviving widow or dependent), etc.
5. Any transaction involving a cell phone, cable, or internet provider.

Anything you can do to still be able to get the individual to actually sign any necessary documents will be helpful. It is a federal crime to access the electronic tax, SS, or Medicare records on behalf of another person.

The way out of this is presumably that you get conservatorship. Until that happens the individual is legally their own person and POA does not give the attorney in fact right to violate privacy even with permission in some cases.

I am not a lawyer. This is not legal advice. I could be mistaken on any of the above points and would welcome better explanation from anyone who knows.

pshonore
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by pshonore » Tue Sep 12, 2017 12:04 pm

dbr wrote:
Tue Sep 12, 2017 11:59 am
There are multiple areas of transactions that a DPOA will not help with including (correct me if I am mistaken)

1. Any transaction with the IRS.
2. Any transaction with the Social Security Administration
3. Any transaction with Medicare/Medicaid
4. Attempting to retrieve documents such as birth certificates, record of military service (except a surviving widow or dependent), etc.
5. Any transaction involving a cell phone, cable, or internet provider.

Anything you can do to still be able to get the individual to actually sign any necessary documents will be helpful. It is a federal crime to access the electronic tax, SS, or Medicare records on behalf of another person.

The way out of this is presumably that you get conservatorship. Until that happens the individual is legally their own person and POA does not give the attorney in fact right to violate privacy even with permission in some cases.

I am not a lawyer. This is not legal advice. I could be mistaken on any of the above points and would welcome better explanation from anyone who knows.
I believe a POA allows you to file ie. sign, a person's tax return.

ResearchMed
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by ResearchMed » Tue Sep 12, 2017 12:07 pm

cas wrote:
Tue Sep 12, 2017 11:50 am
ResearchMed wrote:
Tue Sep 12, 2017 11:33 am

--> But once the person is incapacitated, it's obviously too late to complete the specific preferred "own form" from specific financial institutions, even so that accounts can be transferred to a vendor that *does* allow full PoA access, etc.
So try to identify *al* financial institutions (including insurance and ?) to make sure that the DPoA/SPoA forms are completed on the specific papers required, and that the forms are accepted/filed prior to some later need.
For plain vanilla PoA's while person is still "capable", it's an inconvenience, but not a sort of temporary dead end (one that might later require legal assistance).

RM
What ResearchMed said is what I'm trying to get at for the specific case of credit freezes and IRS tax PINs.

Have other people run into situations where it seemed at one time like a good idea to put these identity theft protection measures into action for an aging person, but then time went on, the aging person sadly became incapacitated, and the person in charge of admininstering their financial affairs found themselves "stuck" due to the credit freeze or IRS tax PIN? And, potentially, the person with DPOA was left saying "I wish we had just left well enough alone, not gotten the credit freeze/IRS PIN, and just risked identity theft."

Or, conversely, any experience with "No problem at all. With DPOA, was able to thaw credit, talk to customer service when there was a problem with the PIN, etc. etc. The credit (or IRS PIN) people have already long since figured out how to deal with DPOA situations."
Not to beat a dead question, but don't forget that even IF the <whichever entity> has "long since figured out how to deal with DPOA situations" - make sure you have the *correct* DPoA *forms*.
That might be only for their *own* forms, not the nice fancy forms that your attorneys have already drawn up, had several originals signed/notarized, etc.

Another concern is any delay while the appropriate DPoA is being set in place. Even if they "accept" an outside PoA form, they'd presumably need to have it in hand, and filed, etc. It (obviously) won't work to tell them over the phone, "Hey, it's okay, I've got a DPoA here..." :twisted: And when it's "needed", it might be needed fast in some instances.

So an additional question is... should one make sure that DPoA's are filed in advance with just about every company someone does business with? That could, would, get unwieldy pretty quickly, all the way around.

This is all quite tricky, and we definitely need to get a better grasp of what needs to be done, at least where there are DPoA's available/accepted.

RM
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dbr
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by dbr » Tue Sep 12, 2017 12:20 pm

pshonore wrote:
Tue Sep 12, 2017 12:04 pm
dbr wrote:
Tue Sep 12, 2017 11:59 am
There are multiple areas of transactions that a DPOA will not help with including (correct me if I am mistaken)

1. Any transaction with the IRS.
2. Any transaction with the Social Security Administration
3. Any transaction with Medicare/Medicaid
4. Attempting to retrieve documents such as birth certificates, record of military service (except a surviving widow or dependent), etc.
5. Any transaction involving a cell phone, cable, or internet provider.

Anything you can do to still be able to get the individual to actually sign any necessary documents will be helpful. It is a federal crime to access the electronic tax, SS, or Medicare records on behalf of another person.

The way out of this is presumably that you get conservatorship. Until that happens the individual is legally their own person and POA does not give the attorney in fact right to violate privacy even with permission in some cases.

I am not a lawyer. This is not legal advice. I could be mistaken on any of the above points and would welcome better explanation from anyone who knows.
I believe a POA allows you to file ie. sign, a person's tax return.
Here is some information about that: http://budgeting.thenest.com/power-atto ... 29609.html

I have used the Form 2848 in the past. I am not sure a DPOA in general is accepted by the IRS, but maybe so. I had the impression not. Even if you have a DPOA you still have to file with 2848 or equivalent.

I think a good rule with any of these things is to establish exercise of the POA before the grantor is unable to excercise grants of authority.

Nutmeg
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by Nutmeg » Tue Sep 12, 2017 12:41 pm

I would also be grateful for answers to the OP's specific questions. I think that I can freeze credit for my elderly relative who has given me a DPOA, but would like to hear about real-life experience with someone unfreezing credit under a DPOA. I am researching whether I should freeze credit today, but don't want to do so if this will cause problems later.

RM noted disappointment with Vanguard's customer service regarding a POA. While I am not dealing with a 403(b) as RM is, I have never had any problems with dealing with my relative's accounts. I am able to do almost everything online. I have found that Flagship representatives are better-informed than regular customer service representatives. To obtain Flagship status, I believe one's household's accounts must total over one million dollars, and an accountholder must request it.

donall
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by donall » Tue Sep 12, 2017 12:52 pm

I think that a number of things can be accomplished with the forms that allow one to share information with persons that are designated on the form. Medicare and insurance forms have these. Not sure about social security. If one is a POA it is important to also get online access so one can monitor, etc. accounts. Better yet is to have trust accounts set up, as a POA is not valid after death.

ResearchMed
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by ResearchMed » Tue Sep 12, 2017 12:54 pm

Nutmeg wrote:
Tue Sep 12, 2017 12:41 pm
I would also be grateful for answers to the OP's specific questions. I think that I can freeze credit for my elderly relative who has given me a DPOA, but would like to hear about real-life experience with someone unfreezing credit under a DPOA. I am researching whether I should freeze credit today, but don't want to do so if this will cause problems later.

RM noted disappointment with Vanguard's customer service regarding a POA. While I am not dealing with a 403(b) as RM is, I have never had any problems with dealing with my relative's accounts. I am able to do almost everything online. I have found that Flagship representatives are better-informed than regular customer service representatives. To obtain Flagship status, I believe one's household's accounts must total over one million dollars, and an accountholder must request it.
I'm forgetting what Vanguard gave as the reason that 403b's were handled this way and taxable or IRA accounts weren't.

(I'm not sure about other ERISA accounts. Maybe it's all of those, or maybe just 403b's? Our 403b is an ERISA account, and not all 403b's are, so I'm not sure just what if the key "factor". And I'm not inclined to contact them again to find out. Most of the reps, including supervisors, kept insisting that it *was* possible for an "agent" to view the other person's 403b info, just like with the IRA, etc. But it kept "not working". Finally, Employer had to intervene to find out why we were getting a run-around, and only then were we told that it wasn't possible after all, and our accounts were "working as planned", i.e., not displaying 403b info in the Agent's login screen.)

Once DH (eventually!) retires, we'll probably move most of the money out of Vanguard, or at the least, roll it into an IRA at Vanguard, where we can better manage it all.
I don't think there are (many?) other holdings there than can't be moved elsewhere.
It's not like TIAA, where the Trad Annuity and their TREA cannot be 'moved'.

RM
This signature is a placebo. You are in the control group.

ChrisC
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by ChrisC » Tue Sep 12, 2017 1:03 pm

dbr wrote:
Tue Sep 12, 2017 12:20 pm
pshonore wrote:
Tue Sep 12, 2017 12:04 pm
dbr wrote:
Tue Sep 12, 2017 11:59 am
There are multiple areas of transactions that a DPOA will not help with including (correct me if I am mistaken)

1. Any transaction with the IRS.
2. Any transaction with the Social Security Administration
3. Any transaction with Medicare/Medicaid
4. Attempting to retrieve documents such as birth certificates, record of military service (except a surviving widow or dependent), etc.
5. Any transaction involving a cell phone, cable, or internet provider.

Anything you can do to still be able to get the individual to actually sign any necessary documents will be helpful. It is a federal crime to access the electronic tax, SS, or Medicare records on behalf of another person.

The way out of this is presumably that you get conservatorship. Until that happens the individual is legally their own person and POA does not give the attorney in fact right to violate privacy even with permission in some cases.

I am not a lawyer. This is not legal advice. I could be mistaken on any of the above points and would welcome better explanation from anyone who knows.
I believe a POA allows you to file ie. sign, a person's tax return.
Here is some information about that: http://budgeting.thenest.com/power-atto ... 29609.html

I have used the Form 2848 in the past. I am not sure a DPOA in general is accepted by the IRS, but maybe so. I had the impression not. Even if you have a DPOA you still have to file with 2848 or equivalent.

I think a good rule with any of these things is to establish exercise of the POA before the grantor is unable to excercise grants of authority.
The IRS won't accept a DPOA when I tried that route and only would permit one to represent the taxpayer with a completed Form 2848 and issuance of a CAF number from the IRS. Moreover, one has to be very careful in filling out form 2848, complying with the literal instructions -- my form got kicked backed when I said I wanted to represent my BIL for "tax years 2013 and beyond" -- they required me to specify 2013, 2014, 2015, 2016 and 2017. Transactions with the SSA require completion of their forms for Representative Payee status. Don't know about Medicare or the other governmental units, but one has to be very careful here.

Regarding the OP's issues, I'm not sure there's there's much else he can do, other than having the DPOA, filling out all requisite POA forms required by the Government and Financial Institutions, completing appropriate Medical proxy and healthcare forms, perhaps placing credit freezes, and otherwise daily monitoring banking and other financial accounts. Now that I think about it, with the Revocable Trust in place too, don't see any major gaps.

littlebird
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by littlebird » Tue Sep 12, 2017 1:43 pm

As a member of your parents' generation, although possibly a decade younger, I've been giving this issue a lot of thought in the past few days,

One of my main financial goals for the past few years has been simplifying my financial life, in anticipation of diminishing cognitive abilities and the ultimate turning over of responsibility to my daughter as co- or successor trustee and attorney in fact (holder of POA). The tasks surrounding credit freezing and un-freezing are not compatible with this goal.

I am reluctant to freeze my credit for many reasons, most pertinently here because, as you point out, an eventual assisted living home might want to see it. I keep a notebook with all my important information at both my home and my daughter's, and if I did freeze my credit, the PINs would be in the notebook, but experience with on line transactions, especially given my age, has been that glitches occur with some frequency. I would absolutely hate to cause my daughter any further burdensome issues at such a time. And I cannot foresee now, what other matters frozen credit might affect. Against that, I am trying to weigh what burdens might arise in case my or my even more elderly spouse's (who is already in assisted living , no credit check, and whose trustee and attorney-in-fact I am) identities are stolen. Most of us are hampered in these weighings of issues by not being able to for see what larcenous minds can concoct.

And then there's the more immediate issue of do I myself want to deal with locking and unlocking credit X 3 or 5 with PINs and fees and computer glitches, or am I willing to take my chances with theft of (possibly never-again needed ) credit, as I age. I am able to competently handle things I've been handling all along, but am less capable with all things new, irritating, and in my mind unfair and a gross imposition. Right now, I lean toward chance taking.

btenny
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by btenny » Tue Sep 12, 2017 2:08 pm

When my wife and I went through this back when with my FIL we found making my wife a co-signer on his stuff was the best solution. She was on his checking account and his safe deposit box. He did his own taxes and messed them up several years but she was sort of helping so she was aware. So she had copies of his taxes and the various forms and letters.

Being on the checking account meant she could pay the bills as needed for 2-3 months after he passed (or was incapacitated) with no need for a POA or other paper. Same for closing his safe deposit box. We did not need to pay to have it drilled or other special issues due to death or incapacity of the owner. All his other accounts and home and car were in his trust and we had to wait 6 weeks or more to get access. It took that long for the paperwork from the state and the reviews at the brokerage and so forth. It was slooowww.

Good Luck.

btenny
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by btenny » Tue Sep 12, 2017 2:18 pm

I also wanted to note that my FIL had total 100% supplemental insurance coverage above medicare. So taking care of his medical bills was a breeze even though he was in and out of the hospital 2-3 times in the last few months.
Medicare paid part and the insurance company paid the rest. So NO extra bills or issues to look after.

This is one excellent reason to buy and pay for Group F Supplemental insurance. NO bills for your relatives to figure out and manage.

Good Luck.

pshonore
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by pshonore » Tue Sep 12, 2017 3:18 pm

ChrisC wrote:
Tue Sep 12, 2017 1:03 pm
dbr wrote:
Tue Sep 12, 2017 12:20 pm
pshonore wrote:
Tue Sep 12, 2017 12:04 pm
dbr wrote:
Tue Sep 12, 2017 11:59 am
There are multiple areas of transactions that a DPOA will not help with including (correct me if I am mistaken)

1. Any transaction with the IRS.
2. Any transaction with the Social Security Administration
3. Any transaction with Medicare/Medicaid
4. Attempting to retrieve documents such as birth certificates, record of military service (except a surviving widow or dependent), etc.
5. Any transaction involving a cell phone, cable, or internet provider.

Anything you can do to still be able to get the individual to actually sign any necessary documents will be helpful. It is a federal crime to access the electronic tax, SS, or Medicare records on behalf of another person.

The way out of this is presumably that you get conservatorship. Until that happens the individual is legally their own person and POA does not give the attorney in fact right to violate privacy even with permission in some cases.

I am not a lawyer. This is not legal advice. I could be mistaken on any of the above points and would welcome better explanation from anyone who knows.
I believe a POA allows you to file ie. sign, a person's tax return.
Here is some information about that: http://budgeting.thenest.com/power-atto ... 29609.html

I have used the Form 2848 in the past. I am not sure a DPOA in general is accepted by the IRS, but maybe so. I had the impression not. Even if you have a DPOA you still have to file with 2848 or equivalent.

I think a good rule with any of these things is to establish exercise of the POA before the grantor is unable to excercise grants of authority.
The IRS won't accept a DPOA when I tried that route and only would permit one to represent the taxpayer with a completed Form 2848 and issuance of a CAF number from the IRS. Moreover, one has to be very careful in filling out form 2848, complying with the literal instructions -- my form got kicked backed when I said I wanted to represent my BIL for "tax years 2013 and beyond" -- they required me to specify 2013, 2014, 2015, 2016 and 2017. Transactions with the SSA require completion of their forms for Representative Payee status. Don't know about Medicare or the other governmental units, but one has to be very careful here.

Regarding the OP's issues, I'm not sure there's there's much else he can do, other than having the DPOA, filling out all requisite POA forms required by the Government and Financial Institutions, completing appropriate Medical proxy and healthcare forms, perhaps placing credit freezes, and otherwise daily monitoring banking and other financial accounts. Now that I think about it, with the Revocable Trust in place too, don't see any major gaps.
I e-filed several returns as a preparer when a POA signed the return. The POA copy has to be sent in with a transmittal form. I'm talking about filing a return, not representing someone before the IRS which is a different matter.

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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by Lexi » Tue Sep 12, 2017 4:11 pm

Social security does not accept POA but does have a process to become a representative payee, which recognizes you for Medicare as well. It can be set up after the person is no longer able to handle his or her affairs. In fact, it probably should not be set up until then, at which time they want a responsible party to look after things.

Being trustee of their trust is relevant because you will be able to handle financial matters more easily in that role. I would encourage them to put whatever they can in their trust.

My mother had a small joint bank account with me which let me pay small bills but I deliberately kept the balance small.

Be willing to hire experts as needed. If you have siblings that can help reassure them and promote good relationships in the long run.

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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by dbr » Tue Sep 12, 2017 5:15 pm

The SS rep payee brings with it the obligation to report annually on what you did with the money.

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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by Lexi » Tue Sep 12, 2017 5:28 pm

dbr wrote:
Tue Sep 12, 2017 5:15 pm
The SS rep payee brings with it the obligation to report annually on what you did with the money.
You need to be prepared to report what you do with any assets to authorities or other interested parties. This report is easy if the person is receiving nursing home or other care for dementia.

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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by dbr » Tue Sep 12, 2017 5:50 pm

Lexi wrote:
Tue Sep 12, 2017 5:28 pm
dbr wrote:
Tue Sep 12, 2017 5:15 pm
The SS rep payee brings with it the obligation to report annually on what you did with the money.
You need to be prepared to report what you do with any assets to authorities or other interested parties. This report is easy if the person is receiving nursing home or other care for dementia.
That is true. The SS one is for them and they ask for it. Probably it is better to get into a routine on a report where there is a formalism to do it than to wonder who is going to ask you for what after the fact someday. You are correct that "every penny was paid to Nursing Home Inc." is pretty simple provided you have the documents to show that is where the money actually went.

Note: I have done and am doing even today all of these kinds of things, so my comments are not hypothetical. Some of the stuff you have to document in one context or another can be unbelievable. To actually function as POA for someone who is seriously unable to manage their affairs is no minor obligation.

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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by BolderBoy » Tue Sep 12, 2017 10:56 pm

furwut wrote:
Tue Sep 12, 2017 10:33 am
Re bank accounts:
Is setting up joint accounts with you a possibility?
Instead of joint ownership, just have your name added as a signer on the account(s).
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by FIREchief » Wed Sep 13, 2017 3:38 am

BolderBoy wrote:
Tue Sep 12, 2017 10:56 pm

Instead of joint ownership, just have your name added as a signer on the account(s).
How would this be different than exercising a power of attorney?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by Nords » Sun Sep 17, 2017 6:01 pm

cas wrote:
Tue Sep 12, 2017 11:50 am
Have other people run into situations where it seemed at one time like a good idea to put these identity theft protection measures into action for an aging person, but then time went on, the aging person sadly became incapacitated, and the person in charge of admininstering their financial affairs found themselves "stuck" due to the credit freeze or IRS tax PIN? And, potentially, the person with DPOA was left saying "I wish we had just left well enough alone, not gotten the credit freeze/IRS PIN, and just risked identity theft."
Yeah, I had that problem.

My father developed Alzheimer's in 2008 and lived independently until early 2011. He told us "boys" about his "slipping memory" in 2009, and by then he refused all offers of assistance, let alone POAs. (Alzheimer's makes the word "No" the default vocabulary.) He has a will and a medical directive but he didn't have a revocable living trust. When he was eventually diagnosed with Alzheimer's and had to move into a care facility, we had to file for conservatorship.

You'd think that a conservator appointment from a state probate court would be the magic wand that lets you manage an elder's affairs for them. You would be wrong.

When I put away Dad's credit cards and froze his credit reports, that part went fine. I did it all online (conservator appointment clutched in my sweaty hand) and nobody objected to me logging in as my father.

A year later I tried to enroll Dad in Social Security Online. The system wouldn't take it, so I finally called the SS office and asked for help. It turned out that their database verified account IDs by using the credit bureaus (in this case, Experian) but the freeze was locking out the SSA. I tried unlocking Dad's freeze (several times, including paying the fees) and we could never get it to work. I gave up on SS Online.

After enduring the hassle of regaining access to my father's checking account (conservator appointment + lawyer phone call), I tried (several times) to open accounts at other financial institutions to put some of Dad's assets in CDs. Almost every one of them insisted they could only deal with guardians, or they needed an "original copy" (whatever that may be) of the appointment, or that they needed Dad's written permission. In other words if they even understood conservatorship, they didn't care. They wanted their forms their way. Don't even get me started on HIPAA or his long-term care insurance company.

USAA was the only exception to this issue. I was able to upload a copy of my conservator's appointment on their website and follow up with Dad's DD-214. The member service rep & I talked through a financial transfer from Dad's Fidelity account. When the financial institution understands how conservatorship is supposed to work (and who's liable), it works great.

Since then I do business online whenever possible. I log in as Dad and do the transactions as him. I've opened up checking accounts & CDs and filed his tax returns without bothering the corporations (or the IRS) about the details. If anyone asks then I'm ready to provide my conservator appointment and verify my identity and discuss the issue with them, but so far nobody has asked. If anyone ever objects, I'll close the account and move elsewhere. If the IRS objects, well, that's too bad. I'm caring for Dad's assets in a fiduciary manner and I'm pretty sure the courts (and the media) would agree that the intent of the law was followed.
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by BolderBoy » Sun Sep 17, 2017 10:33 pm

FIREchief wrote:
Wed Sep 13, 2017 3:38 am
BolderBoy wrote:
Tue Sep 12, 2017 10:56 pm

Instead of joint ownership, just have your name added as a signer on the account(s).
How would this be different than exercising a power of attorney?
It survives her death (if you're a signer, you can still write checks on the account after her death - not so with only POA).
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by cas » Mon Sep 18, 2017 8:08 am

Thanks for taking the time to type your story out for me.
Nords wrote:
Sun Sep 17, 2017 6:01 pm
I tried unlocking Dad's freeze (several times, including paying the fees) and we could never get it to work.
That isn't encouraging.

I wonder what percentage of people who are trying to do thaws for themselves (never mind the added complication of trying to deal with it for someone else) run into problems with the thaws.

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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by cas » Mon Sep 18, 2017 9:00 am

Nords wrote:
Sun Sep 17, 2017 6:01 pm
A year later I tried to enroll Dad in Social Security Online. The system wouldn't take it, so I finally called the SS office and asked for help. It turned out that their database verified account IDs by using the credit bureaus (in this case, Experian) but the freeze was locking out the SSA. I tried unlocking Dad's freeze (several times, including paying the fees) and we could never get it to work. I gave up on SS Online.
Thinking about your post for a bit longer ... I guess one small bright spot is that SS Online is the only place you mentioned encountering problems because of the credit freeze. Nothing about "Once Dad got to the point where he had to move into a care facility, all of a sudden there were a bunch of businesses I had never thought about before insisting on pulling his credit report during this new phase of his life."

littlebird, in his/her post up above, also said that there was not a credit check when his/her spouse entered assisted living.

Although... it sounds like you perhaps froze the credit after the flurry of a crisis point, so maybe I shouldn't get my hopes up too much about there not being a widespread need for thawing the credit of an incapacitated person.

(I can be convinced that it doesn't make sense for the elder care industry to be pulling credit reports on someone who is mostly incapacitated ... in many cases, that person isn't going to be the person making the decision on whether to pay their bills or not. But, not all things in the world of bureaucratic procedures make sense.)

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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by dbr » Mon Sep 18, 2017 9:32 am

cas wrote:
Mon Sep 18, 2017 9:00 am
Nords wrote:
Sun Sep 17, 2017 6:01 pm
A year later I tried to enroll Dad in Social Security Online. The system wouldn't take it, so I finally called the SS office and asked for help. It turned out that their database verified account IDs by using the credit bureaus (in this case, Experian) but the freeze was locking out the SSA. I tried unlocking Dad's freeze (several times, including paying the fees) and we could never get it to work. I gave up on SS Online.
Thinking about your post for a bit longer ... I guess one small bright spot is that SS Online is the only place you mentioned encountering problems because of the credit freeze. Nothing about "Once Dad got to the point where he had to move into a care facility, all of a sudden there were a bunch of businesses I had never thought about before insisting on pulling his credit report during this new phase of his life."

littlebird, in his/her post up above, also said that there was not a credit check when his/her spouse entered assisted living.

Although... it sounds like you perhaps froze the credit after the flurry of a crisis point, so maybe I shouldn't get my hopes up too much about there not being a widespread need for thawing the credit of an incapacitated person.

(I can be convinced that it doesn't make sense for the elder care industry to be pulling credit reports on someone who is mostly incapacitated ... in many cases, that person isn't going to be the person making the decision on whether to pay their bills or not. But, not all things in the world of bureaucratic procedures make sense.)
My understanding is that the issue is not credit worthiness but using the credit system to verify identity. Federal benefits programs are big on people being who they say they are.

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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by Nords » Mon Sep 18, 2017 11:34 am

cas wrote:
Mon Sep 18, 2017 9:00 am

Thinking about your post for a bit longer ... I guess one small bright spot is that SS Online is the only place you mentioned encountering problems because of the credit freeze. Nothing about "Once Dad got to the point where he had to move into a care facility, all of a sudden there were a bunch of businesses I had never thought about before insisting on pulling his credit report during this new phase of his life."

littlebird, in his/her post up above, also said that there was not a credit check when his/her spouse entered assisted living.

Although... it sounds like you perhaps froze the credit after the flurry of a crisis point, so maybe I shouldn't get my hopes up too much about there not being a widespread need for thawing the credit of an incapacitated person.

(I can be convinced that it doesn't make sense for the elder care industry to be pulling credit reports on someone who is mostly incapacitated ... in many cases, that person isn't going to be the person making the decision on whether to pay their bills or not. But, not all things in the world of bureaucratic procedures make sense.)
The only thing I did with Dad's credit cards was to redeem the rewards points. I never used the cards themselves, so a couple years later the card companies declined to renew them.

If the care facility ever checked Dad's credit in 2011, I never knew about it. He also moved to a memory care facility about 18 months ago (with the credit freeze in place) and I can't tell that anyone cared about being able to run a credit check.

My impression (from two care facilities in the Denver area) is that turnover is so high in the financial office that they can barely keep up with training to the minimum cyclic routine. I don't think credit checks are even on their radar, let alone an issue.
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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by Gnirk » Mon Sep 18, 2017 11:56 am

Deleted- duplicate post.
Last edited by Gnirk on Mon Sep 18, 2017 11:59 am, edited 1 time in total.

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Re: dementia, POA, credit freezes, and IRS tax return PIN - what am I getting into?

Post by Gnirk » Mon Sep 18, 2017 11:58 am

My mom's SS was directly deposited into her checking account. Her state retirement was also directly deposited. She added me as a signer on the account when she was in the very early stages of Alzheimer's. I used that account to pay her bills. I also had POA, but never got involved with SS POA.
I put a credit freeze at all three credit bureaus, and as far as credit cards, we never used them so they weren't renewed.

Neither her assisted living or Adult Family Home did a credit check, and I signed all papers : " Jane Doe by Jill Doe, Attorney-in-Fact". I gave a certified copy of the Durable Power of Attorney to whomever required it.

I kept an excel spreadsheet detailing all income and expenses by month, with receipts attached.
As for income tax, those were done by her CPA.

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