elderly parents- banking online access and credit card

[swimmingforever]

Hi,

I wanted to see if I could get some feedback.

Current situation:

both parents 87- They both live together in community made up of people 55+, no major medical problems but are slowing down

Dad driving some and has a lot of added responsibility taking care of my mom who doesn't drive. Dad has separate bank (local bank...doesn't exist where I live) that has all of the day to day business done on it. He only has a debit card...no credit cards.

Mom has separate bank with debit card and rarely uses it. See has expressed she doesn't to mess with it. Social security is deposited here.

Just recently my dad's account was hacked/frauded. The debit card was frauded and the bank account itself too. Zelle was compromised. We don't know how it happened. It could have been via email or text schemes and/or in a store.

Things that have been done:

The bank opened a new checking and savings accounts. They also issued new debit card. I live a few hours away. I personally drove down, and we went to his bank together. He was open to the idea of setting up a joint checking/ savings account. We did this. He has debit card. I do not. I am a joint member and have my own user name/ password to access account.

Questions:

I am not a fan of debit cards...except for maybe an ATM. I don't like the real time payment and less protection. I like a credit card that is paid twice a month (1st/15th) so I can review charges and then pay it. That is what I do personally. If something is not right, I investigate it. I would like to do something similar with my dad.

If he opens a credit card at his bank and I'm on it, I assume I would not be the primary card holder. If we had real issues, I may not be able to control the situation.

I would like to open a new credit card at Wells Fargo (branch in both towns) and have my mom and dad on this account with cards in each of their names. My dad could use his debit card mainly for ATM. Their credit cards would be used for their day to day business. I want to provide them independence in their daily lives concerning how they spend their money. I would pay the credit card and 1st/15th like I do mine. I would give my dad the password so he could view account. This might include me texting code to him because of 2FA. We could vet the charges before I pay the balance.

If I did this credit card, I would probably close my mom's separate bank account and stream to SS into my/dad joint account. She does not want to mess with her current account.

I have told my dad to start using cash for any restaurants, gas stations, small purchases.

I would appreciate any feedback on best practices and personal experiences. I would not do anything unless I had my parents approval. I am the person designated to take care of the financial business in their wills.

My brother and his wife live in the same town as my parents. His visits our parents weekly. They are both supportive of the things I have mentioned above. I update them regularly as things develop.

[lthenderson]

Just recently my dad's account was hacked/frauded. The debit card was frauded and the bank account itself too. Zelle was compromised. We don't know how it happened. It could have been via email or text schemes and/or in a store.

Or the fraudsters just randomly guessed the 16 digit code and used it like a credit card on sites that don't require a PIN like they did my debit card that I never ever used.

If it were me, I would get them an ATM only card that can only be used to withdraw cash from an ATM. I would then get them a credit card for all their purchases/bill paying, etc. and set it up on automatic payment from their bank account and then review their bill monthly for fraud. This is about the simplest way with most built in fraud protections.

[7eight9]

My sister talked my father into adding her as a joint account holder on all of his bank accounts. Ostensibly to "help" him in her words (I found out about this activity only after his death). When he passed those accounts became hers. I was not pleased. You and your brother may have a different relationship but I for one would have serious objections to your father adding you as a joint account holder if I was your brother.

With respect to debit cards - the recommendation to get an ATM only card is good. Or your father could do what mine did and just cash a check when he wanted some money.

[Coastfical]

This happened with elderly parent also - not sure how but could have been a care giver at community. we cancelled everything and just got her a credit card - not as much fraud protection on debit cards as credit cards. If she needs cash she can write a check to herself at local bank and cash it. Put everything on auto pay that we could. Also set up two factor authorizations with my phone and email / text notifications for every transaction to keep an eye on it. Recommend change email address (if they even have one). Cancel / reduce as many accounts to minimum needed. Smart to have joint with you. Disable Zelle. Eventually took over all bill paying and do not have any statements etc going to parent. Good luck. And if he is driving consider transitioning to something else soon - or at least getting evaluated for competency.

EDIT to add: report fraud to police dept and also freeze credit if not already done so -

[stan1]

I would try to get them a credit card in their names only, but I think a debit card is better than carrying around cash into gas stations and fast food restaurants. Whether you use Wells Fargo or his local bank you or your sibling should have access to the account. Best to do that officially through the bank's process; if he won't do that but will give you the password then that's what you are working with.

Best to get this sorted out now before their health deteriorates further.

If we had real issues, I may not be able to control the situation.

Not sure what you mean by that, are you saying he is independent and might not take your advice or something else?

[swimmingforever]

If I got a credit card, I would want to be the primary holder. I would put their names on account and both have credit cards with dad's card/dad name on it. Mom's card/ mom's name on it. It would help in being it was their card with their name.

I appreciate the responses, it really helps.

[lereh]

I understand the big advantage of credit cards, but in your case it might be a problem because nowadays they aren’t joint accounts. So you would have to find a bank that offered authorized access not just authorized use but also access.

You could share passwords and user IDs, but that voids some of the fraud protections.

An alternative would be to stick with the debit card, but have only a small amount of money in the account, that way it can be a joint account and you could see everything that is going on. Do not put any direct deposits in that account. Fund it some other way. I like to call these “burner accounts” lol.

Find a bank that offers fraud protections on debit cards, Wells Fargo, or capital one as two examples.

do not use cash or have them carrying around large amounts of cash.

[lereh]

One advantage of debit cards that is often overlooked is that most banks allow you to set your ATM withdrawal limit and your purchase limit. So you can customize it to say $1,000 a day whereas a credit card might have a $30,000 credit limit.

[lereh]

I wouldn’t be too keen on the idea of you being the primary holder and them just being authorized users. How would you pay it? What would be the audit trail? How much money is gonna be going through there? Will there be a form 709? Will a bank start asking questions about elder abuse because you’re taking money out of theiraccount to pay “your own credit card”.

Not to mention you’re on the hook if they go off the rails, I know you think they won’t, but still…

[Mainiac207]

Slightly off topic, but related. You state "I am the person designated to take care of the financial business in their wills." I presume this means you are the executor (personal representative) for each of them in their wills. This indicates they trust you to carry out their wishes after death, but you also need legal authorization to assist them while they are alive. What you should also do now, if you haven't done so already, is to have each of your parents name you, or possibly your local brother, POA (power of attorney) for finances and for medical (two separate documents). It's highly advisable to have these drawn up by a lawyer. Then, the POA would go to the bank(s) with the document in hand so the bank(s) have this on record. Same for any other accounts, e.g., brokerage, retirement. It's unfortunate, but many organizations, especially brokerages we've found, don't just accept POA documents as is but require their own documents to also be completed. It would also be good to have your mom and dad designate someone (you?) in advance as their rep payee for social security, since the SSA doesn't recognize POA documents. This is easy to do online once they each have a ss account set up.

[stan1]

I'm not sure why you want them to be an authorized user on your credit card. What problem are you trying to solve with that approach? I'm not sure if there is more here that you aren't telling us leading to your approach, such as a past history with financial irresponsibility (gambling, shopping) or if they just have never had a credit card before.

[swimmingforever]

There is no history of credit card abuse, gambling, ect. They have never had a credit card. They have no outstanding debt. They live a very modest lifestyle. That is basically how they are wired. They own their house. Travel is not practical just trips to store locally.

[lereh]

and scams? The “bank” calls and convinces them to hand over the credit card deets. if you are a Reddit user, go check out r/scams.

Elderly have been targeted by scammers, and some of their pitches are very creative.

And if they fall for that, no fraud protections cause they’re willingly given over the deets.

I wouldn’t give them your credit card, a small balance credit card or debit card is what you want

[swimmingforever]

The 709, IRS, and audit comment raises concerns.

My wife and I are retired...both 61. Our insurance is via ACA. I use Roth conversions to keep income just under standard deduction. I pay no income taxes. Our insurance premium is $0. I want to keep this exclusive from my parents situation with no complications.

If I open a credit card as principal card holder and pay parents expenses and then pay myself back from mine/dads joint bank account, this might appear messy. Trigger audit and hassles. I am thinking from an IRS reporting standpoint from my part...709 or something else.

I sounds like I may need to take a more watchdog approach instead of pay all the bills and send money back to reimburse me. I am on his joint account and can see directly what is going on and communicate with bank directly if needed. I don't think being on a joint account and receiving no interest or dividends is going to impact me personally.

Maybe keep the balance relatively low to limit a big risk. Let him keep his debit card from our joint account. I could still move mom into account and close hers. She doesn't use it.

Thank you for all of your responses.

[PatrickA5]

I understand the big advantage of credit cards, but in your case it might be a problem because nowadays they aren’t joint accounts. So you would have to find a bank that offered authorized access not just authorized use but also access.

Just an FYI, my Fidelity (Elan) credit card is joint. Pretty simple process to set up.

[LikeNumbers]

My mother, passed away a few months ago at age 99, never learned to use a computer so I performed all those tasks as required .

Your parents are lucky you are involved.

The following is what I did for my mother.
We created a jointly owned account at Wells Fargo.
She was the primary owner but no longer able to keep up with the bill paying task, so I took over about 8 years ago.
She had a check, savings, and debit card (no credit card).
Her Social Security and pension were auto deposited monthly.
I notified all of vendors she used and had them change her billing address to my address (different town), but kept her
name on the bills. The above entirely removed her from having to worry paying bills.

I contacted all her utilities and arranged an auto debit from checking arrangement - this reduced my time.
When talking with the trash pickup company, they offered to walk up the driveway and put the trash in their truck and
return the can to her designated location - no charge, just a service they performed for elderly customers. This
was GREAT, especially in the winter. When I contacted the small mom-and-pop pharmacy she used they offered
to deliver her medications and check up on her to verify she was taking them - another GREAT thing.

I contacted the newspaper delivery person and offered to pay him to keep a watch out for anything unusual
e.g. lights still on, door open, etc. He refused the money and said he was happy to help. He put my phone
number in his phone.

All other bills I paid online using the Wells Fargo Bill pay service.

I took pictures of her debit card and created an Amazon account for her using the debit card.
As she needed some items she would call me to order them so she did not have to drive around looking for that item.
When she stopped driving, I arranged grocery delivery to her door.

The above approach worked out great. I kept the accounts open until the estate was settled, then closed it.

[stan1]

The 709, IRS, and audit comment raises concerns.

My wife and I are retired...both 61. Our insurance is via ACA. I use Roth conversions to keep income just under standard deduction. I pay no income taxes. Our insurance premium is $0. I want to keep this exclusive from my parents situation with no complications.

If I open a credit card as principal card holder and pay parents expenses and then pay myself back from mine/dads joint bank account, this might appear messy. Trigger audit and hassles. I am thinking from an IRS reporting standpoint from my part...709 or something else.

I sounds like I may need to take a more watchdog approach instead of pay all the bills and send money back to reimburse me. I am on his joint account and can see directly what is going on and communicate with bank directly if needed. I don't think being on a joint account and receiving no interest or dividends is going to impact me personally.

Maybe keep the balance relatively low to limit a big risk. Let him keep his debit card from our joint account. I could still move mom into account and close hers. She doesn't use it.

Thank you for all of your responses.

This will not in and of itself trigger an audit if you are ordinary folk not billionaires.
The IRS is not broadly concerned with children taking care of their parents.

Since you already are on the joint account already just pay bills out of that account. No reason for you to pay their bills out of your account then seek reimbursement. Especially if there is any chance they would spend down their assets and need Medicaid. If they might go on Medicaid you do not want a paper trail of transfers going from them to you. That's something the state Medicaid program will look at closely.

[viveks]

My mother, passed away a few months ago at age 99, never learned to use a computer so I performed all those tasks as required .

Your parents are lucky you are involved.

The following is what I did for my mother.
We created a jointly owned account at Wells Fargo.
She was the primary owner but no longer able to keep up with the bill paying task, so I took over about 8 years ago.
She had a check, savings, and debit card (no credit card).
Her Social Security and pension were auto deposited monthly.
I notified all of vendors she used and had them change her billing address to my address (different town), but kept her
name on the bills. The above entirely removed her from having to worry paying bills.

I contacted all her utilities and arranged an auto debit from checking arrangement - this reduced my time.
When talking with the trash pickup company, they offered to walk up the driveway and put the trash in their truck and
return the can to her designated location - no charge, just a service they performed for elderly customers. This
was GREAT, especially in the winter. When I contacted the small mom-and-pop pharmacy she used they offered
to deliver her medications and check up on her to verify she was taking them - another GREAT thing.

I contacted the newspaper delivery person and offered to pay him to keep a watch out for anything unusual
e.g. lights still on, door open, etc. He refused the money and said he was happy to help. He put my phone
number in his phone.

All other bills I paid online using the Wells Fargo Bill pay service.

I took pictures of her debit card and created an Amazon account for her using the debit card.
As she needed some items she would call me to order them so she did not have to drive around looking for that item.
When she stopped driving, I arranged grocery delivery to her door.

The above approach worked out great. I kept the accounts open until the estate was settled, then closed it.

This is a great list.. only suggestion for another firewall, depending on balance in checking/savings account just get an ATM card (without Visa/MC logo) and use a credit card for all transactions.

[swimmingforever]

If both my mom and dad get credit cards (replace debit cards), would you suggest me to have my name on the credit card account? They would each have their own names on their cards. I would also have a card with my name. If something needed to be paid, medical bills, ect.

Or let them get their own credit cards without my name on account. I could have the user name/PW to monitor the account and pay card via the joint account I'm on if it came down to that.

I would get the ATM card.

[lws]

A durable power of attorney with you as agent may be useful.

[angelescrest]

The 709, IRS, and audit comment raises concerns.

Seems overblown to me. How much cash flow are we talking about? The IRS won’t be concerned with you. Your parents can “gift” you a combined $38,000 next year, and you can “gift” the same in reverse. That’s a lot of money to cover basic cc expenses.

[swimmingforever]

update

Both my parents have a Durable Power of Attorney. Each parent has their spouse as successor. I am listed listed as the first successor agent.

As mentioned earlier from a few replies, is this a document that my dad's bank should have on file? He also has a Vanguard that was not previously mentioned. It has very little transactions. My parents income stream from social security pays more than their yearly expenses.

[RickBoglehead]

I'd suggest a much different approach.

Eliminate debit cards. Get 1 credit card. Dad, with you as an authorized user. Mom if she needs to use it.

Stop paying cash. There is almost zero need for it. My father in-law carried a lot of cash, I explained that opening that big fat wallet in public made him a target. There is no need for it. In their 80s, they switched to credit. He went to the bank monthly and withdrew $700 whether he needed it or not, and stacked it in the safe. Thousands in non-interest earning money...

If they must use cash, no ATM. Go inside and withdraw money. But again, no need for cash. If you see them weekly, you give them the small amount they need.

They get a monthly credit card bill in the mail. Why do they need online access? And why do they need to pay it twice a month?

Getting a credit card from a local bank vs a non-local bank is meaningless.

Consolidate bank accounts to one bank. Parents joint. Do NOT put yourself on the account, but setup financial power of attorney with the bank so you can use online access to monitor it.

You should not setup any joint accounts with you on them. Zero reason to do this. You do not want to share your liability with them, or theirs with you. That is what a POA is for. It can be put into place immediately.

[swimmingforever]

I have read the suggestions concerning not using cash and not carrying a lot of cash

My thought is to not carry cash. If you are going to pick up $30 in food at a local restaurant, why not grab $40 from your "petty cash" box you have at your house? Replenish from ATM money from time to time...keep a few hundred dollars. Wouldn't it prevent the chance of fraud at a restaurant? A local restaurant would be considered a high-risk fraud location.

Only grab what you need. My dad is able to carry out these type of transactions responsible. Wouldn't it be peace of mind that you have a clean transaction?

[goingup]

The problem you're trying to address is the debit card fraud and bank account hacking. The way to fix that is to use a credit card. Unauthorized charges on a CC are usually an easy fix. It's happened to us several times. Bank alerted us, charges reversed, new card issued.

I'd go into Wells Fargo with your dad. Open a CC account. Discuss with the banker how you can help monitor charges. Have the CC linked to a checking account for auto payment. Ask the banker how you can monitor the checking account.

Paying for take-out in cash or credit seems like a minor thing.

[swimmingforever]

yes, this is the heart of current situation.

From my standpoint, is it better to be on the credit card account? Or not be on the account and monitor with his login?

I hear advice on not to be listed on the credit card. I would like to monitor the account. I have the joint checking account that I can log in to view that things are on track there. If a health event happens, I would be authorized to use the credit card account to manage the bills temporarily or permanently if I was on the credit card. The auto pay seems like a good idea.

[stan1]

yes, this is the heart of current situation.

From my standpoint, is it better to be on the credit card account? Or not be on the account and monitor with his login?

I hear advice on not to be listed on the credit card. I would like to monitor the account. I have the joint checking account that I can log in to view that things are on track there. If a health event happens, I would be authorized to use the credit card account to manage the bills temporarily or permanently if I was on the credit card. The auto pay seems like a good idea.

I tried to search and only found an AI answer, but you want to go in person with him to a well-staffed Wells Fargo branch office and ask about authorized signers, powers of attorney, authorized users, and guest users. They are a too big to fail bank, they have solutions for this because many clients have the same problem. Best to have the account in THEIR names not yours.

[RickBoglehead]

yes, this is the heart of current situation.

From my standpoint, is it better to be on the credit card account? Or not be on the account and monitor with his login?

I hear advice on not to be listed on the credit card. I would like to monitor the account. I have the joint checking account that I can log in to view that things are on track there. If a health event happens, I would be authorized to use the credit card account to manage the bills temporarily or permanently if I was on the credit card. The auto pay seems like a good idea.

Father opens account. You are added as authorized user. This means you can log in and view transactions. Your father has no need to log in, he'll get monthly statement (or you turn that off, and you review it online).

Everything should be on autopay that can be.

I have read the suggestions concerning not using cash and not carrying a lot of cash

My thought is to not carry cash. If you are going to pick up $30 in food at a local restaurant, why not grab $40 from your "petty cash" box you have at your house? Replenish from ATM money from time to time...keep a few hundred dollars. Wouldn't it prevent the chance of fraud at a restaurant? A local restaurant would be considered a high-risk fraud location.

Only grab what you need. My dad is able to carry out these type of transactions responsible. Wouldn't it be peace of mind that you have a clean transaction?

Why does anyone need to "grab cash"? In 2024, per Quicken, I have the following transactions where I spent cash:

Local thrift store that charges for credit card - 5 times
Tips at hotels while traveling for maid service - 4 times
Buying trash tags at town hall - 2 times
Bought paint samples at a paint store that charges 4% for credit cards - 1 time
Brewery where they charge for credit card - 1 time
Donation at concert - 1 time

14 times a year, for a total of under $100.

Your father SHOULD NOT BE USING AN ATM. I put that in all caps, because OLD PEOPLE ARE TARGETS. People can a) see his pin get typed in, b) see his balance, c) rob him of cash. GO INTO THE BANK IF YOU MUST GET CASH, or have your children drop off $50 from your account when they visit...

[goingup]

swimming forever-
I’m not sure the best way to have your dad’s CC set up. If you could be on it as an authorized user that might afford you the best access. The WF banker can advise.

The suggestion that your dad not use outside ATMs seems like a good one. I fully understand that many men of that age carry cash. Our WF branch has an ATM in the lobby which I prefer myself.

[stan1]

update

Both my parents have a Durable Power of Attorney. Each parent has their spouse as successor. I am listed listed as the first successor agent.

As mentioned earlier from a few replies, is this a document that my dad's bank should have on file? He also has a Vanguard that was not previously mentioned. It has very little transactions. My parents income stream from social security pays more than their yearly expenses.

No, you need to talk to the bank and Vanguard if you aren't comfortable looking at the websites and figuring this out.

They will probably want them to sign the banks own power of attorney form. Vanguard definitely wants them to use the Vanguard forms and process.