Managing Money and Dementia

When Irene’s daughter visits her mother, she sees stacks of mail on top of the refrigerator. There are countless pieces of junk mail mixed in with utility bills and a past due credit card bill.  “It’s all so confusing”, complains Irene, “I don’t even know what to do with it all.”Then there's Arthur, who always donated to his church and occasionally to local charities, but his wife is alarmed and dismayed when she learns he has withdrawn almost all of their savings and sent large checks to numerous organizations she never heard of.  

Irene and Arthur may have already received a dementia diagnosis or this may be one of the first signs their family members notice.   Irene and Arthur's families want to help but aren't sure what to do.   If the person you’re caring for has trouble walking you can get them a cane or a walker.   But what if they need assistance with daily finances?  How can you tell and how can you help them?  

Here are a few signs that may indicate a problem:

  • Confusion and frustration when paying bills
  • Mail piles up unopened and/or tucked into drawers
  • Person with dementia has difficulty distinguishing important mail from junk mail
  • Bills are paid twice or paid late
  • Checking account has frequent overdrafts
  • Credit cards have late fees and interest 
  • Increase in charitable giving (either dollar amounts or number of donees) 
  • Problems balancing the checkbook when they've always been able to do it before

If they are struggling with daily finances, what is the next step?  

Depending on the type and severity of dementia, the person with dementia may still be able to take part in managing personal finances as long as they have supervision and safeguards in place.

To help keep track of the mail, it’s a good idea to designate one special box or basket and ask that all of the mail be put there as soon as it is received (with the exception of personal cards and letters).   If the person with dementia keeps going back to the box to go through the mail or worries about it, put a cover on the box with a slit for them to slide the mail through because if it’s not visible they may not worry as much about it.  Every two weeks or so, a caregiver can sit with them as they go through the mail and pay bills.  When possible,  set up bills to be automatically drafted from the checking account.  

The caregiver who assists with personal finances can be a family member, accountant, or daily money manager, but should always be thoroughly vetted and accountable to a third party.  If the dementia becomes severe enough, the finances will eventually need to be taken over by a power-of-attorney or court-appointed conservator.  It's important to keep persons with dementia fiscally safe as well as physically safe.  

Scams, Schemes & Swindles

See Elizabeth discuss scams in a brief segment on WZZM:

Fraud is a serious threat to the well being of older adults.  According to The True Link Report on Elder Financial Abuse 2015, seniors lose about $30 billion a year to financial exploitation and criminal fraud. 

All ages are vulnerable to scams and fraud, but seniors are frequently targeted because they generally have access to cash in the form of retirement savings.  They are also more likely to have a landline and be home during the day making them more accessible.  Older adults are sometimes more trusting or polite than other age groups, which can make them more likely to stay on the phone and hear the con artist’s pitch. 

Fraud and scams take many forms and come into the home through the Internet, telephone and mail.  A common tactic is a “phishing” e-mail that looks like it is from a bank or legitimate business, complete with the logo.  It states there is a problem or question about an order and asks the recipient to click on a link or open an attachment to get more information, which opens up the victim’s computer to the scammer.  The telephone is still a common device used for scams and criminals are now able to “spoof” Caller ID to make it look like the call is coming from an organization you know, such as a utility company or government agency.  Requests from questionable charities and notices of lottery winnings are common and can come by phone or mail. 

There are a number of scams currently going around in West Michigan.  They include:

  • Phone calls or e-mails from the “IRS” and demanding payment.  Be aware the IRS will not call you for any reason and does not send payment notices by e-mail. 
  • Phone call or e-mail from someone claiming to be a family member or friend in trouble.  These phone calls are frequently late at night and the caller says they are your grandchild and need money for medical bills or to get out of jail and beg you not to tell their parents.  They are very convincing actors and sometimes even know your grandchild’s name. 
  • Imposters demanding payment for Consumers Energy bill immediately.  The scammers are spoofing the Caller ID in many parts of the state. 
  • Phone sales of fake or overpriced Personal Emergency Response Systems.  This is a high-pressure sales call that may begin by saying, “Your family wants you to have this” leaving many to believe that their family member ordered it.  It is best to purchase these systems locally from a reputable supplier. 
  • False computer message of a virus and phone calls from Microsoft imposter that software license needs to be renewed.  These hackers are trying to gain access to your computer and will then steal information or lock it up and hold it ransom until you pay them. 
  • Solicitations for questionable charities.  Many claim to be local police or fire fighting organizations but give only a tiny percentage to the cause.  Also, fraudulent charities pop up every time there is a natural disaster and try to capitalize on the sympathies of consumers. 
  • Delivery of a bogus gift intended to steal credit card information.  Someone may ring the doorbell with a large gift basket or package and say it was sent as a gift, but since it contains alcohol they need to see an ID or ask you to pay a small handling fee.  They give you the gift basket then use the credit card information fraudulently. 

Con artists use certain tactics to get money from their victims, which can serve as warning signs.  They appeal to emotions, because if someone is fearful or excited they don’t think logically and their judgment is impaired.  Scammers will try to frighten you with threats or a sense of urgency that you have to pay right now.  Or they try to get you excited about a chance to win money or save money.  Frequently, they ask for payment by pre-paid credit card, green dot card, gift card or wire transfer, because these funds are harder to trace and cannot be stopped once sent.  Being aware of these warning signs can help us spot a scam in the making. 

 There are other ways we can protect ourselves:

  • Do not click on e-mail links or open attachments unless you are certain of their authenticity
  • Screen phone calls and listen to the message before picking up the phone
  • Take your time and think carefully before giving payment to anyone.  Talk it over with someone you trust if you’re not sure
  • Research charities at www.charitynavigator .com or the Michigan Attorney General’s website
  • Do not give out your social security number, Medicare number or any account numbers over the phone
  • Monitor all statements and bills closely
  • If you are a victim or fraud or identity theft, put a Fraud Alert on your credit report by contacting one of the major credit bureaus
  • Stay up to date on current scams

See our Resources page for a list of scam alerts, agencies where you can report scams, how to research charitable organizations and more.  

When you learn about a scam tell your friends, tell your neighbors, tell your family and spread the word.  The more we talk about scams, the harder it will be for the criminals to carry them out. 

Elizabeth Zeldes, CPA

Senior Advisory Services PLLC

October 2016

Tuesday Tax Tips & Tidbits - Non-cash Charitable Contributions

How do you take a deduction for a charitable contribution without writing a check or pulling out your wallet?  The answer lies in non-cash donations.  See below for some ideas.  

Clothing and household items:  You can contribute clothing and other property in good condition to a charitable organization and claim as an itemized deduction.  You may only deduct the fair market value of an item, which in most cases is the amount it would sell for in a thrift shop.  Both Goodwill and Salvation Army publish lists that can be used as a guide.  Keep a record of items donated along with the name of the charitable organization, the date and place of the donation, fair market value of the items, the method of valuation, and approximate cost of the property.  Non-cash donations of over $500 in total value are listed on form 8283.  If you’re cleaning out your house or downsizing this can add up to a nice deduction!  

Artwork, Antiques, Coins:  These hard to sell collectibles can be a nice gift for a charity with the added benefit of a deduction for you, but are subject to specific rules, so do your homework before making the contribution.  Higher value items will require a written appraisal from a qualified appraiser.  

Stock:  Appreciated stock may also be donated to charity if it meets certain requirements.  The stock can be deducted at fair market value.  This means that a deduction for the full fair market value may be allowed even though the appreciation was never reported or taxed as income.

Mileage:  You may take a deduction for the miles you drove when doing work for a charity.  In 2015, the charitable mileage rate was 14 cents per mile.  Keep a notepad in your glove box and jot it down during the year or keep track of it on your smart phone.  

Please note:  Charitable contributions are deductible only if you itemize (with the exception of Qualified Charitable Distributions from an IRA - see last week’s Tax Tip for more).  Deductions for charitable contributions are also limited by adjusted gross income, but may be carried forward for up to five years.  It’s important to keep the required paperwork supporting the deduction.  Details available in IRS Publication 561- Determining the Value of Donated Property and IRS Publication 1771- Charitable Contributions: Substantiation and Disclosure Requirements.

This information is for general and educational use only and not intended as tax or legal advice.  Tax situations vary significantly from person to person so it's always best to consult your own professional preparer for deductions that may apply to you. 

Tuesday Tax Tips & Tidbits - Qualified Charitable Distributions

Did you know it’s possible to get a tax benefit from a charitable contribution even if you don’t itemize deductions?  In year-end legislation, qualified charitable distributions (QCDs) from individual retirement accounts (IRAs) were made a permanent part of the tax law.   This means that taxpayers 70-1/2 and older may donate all or part of their required minimum distribution to a qualified charity and not include it in their taxable income.  The distribution needs to be made directly from the IRA to the charity. There are advantages to QCDs as opposed to taking a taxable IRA distribution and then contributing the proceeds to a charity. That’s because taxable IRA distributions must be included in adjusted gross income.  This affects items such as the taxable portion of Social Security benefits, deductions limited by AGI, and possibly future Medicare insurance premiums.  QCD’s can be an important vehicle for those who wish to donate to charities and are not dependent on their IRA distribution for living expenses. 

Here's the fine print:    The amount of a QCD is limited to the amount of the distribution that would be included in income, up to $100,000 annually.  The QCD must be, aside from the percentage of AGI limits, eligible for a charitable contribution deduction and adequate documentation obtained.  See IRS Publication 590-B for details.  

This information is for general and educational use only and not intended as tax or legal advice.  Tax situations vary significantly from person to person so it's always best to consult your own professional preparer for deductions that may apply to you.

Tuesday Tax Tips & Tidbits - Little Known Medical Deductions

Did you know medical expenses that aren't covered by Medicare or Medi-gap insurance may still be tax deductible?  

Here's a list of little known deductible medical expenses:

·       renovations to increase door width to accommodate a wheelchair 

·       addition of railings, support bars or entrance ramps

·       hearing aids and hearing aid batteries

·       glasses and vision exams 

·       special telephone or television equipment for hearing impaired

·       incontinence supplies

·       window air conditioner for those with allergies

·       amounts you pay for transportation to another city if the trip is primarily for, and essential to, receiving medical services 

·       portion of entrance fee paid to Continuing Care Retirement Communities 

·       maintenance and personal care costs for chronically ill individuals

Keep in mind medical expenses are deductible only if the taxpayer itemizes deductions and has medical expenses in excess of 7.5% of income (10% if younger than age 65).   

This information is for general and educational use only and not intended as tax or legal advice.  Tax situations vary significantly from person to person so it's always best to consult your own professional preparer for deductions that may apply to you. 

Tuesday Tax Tips & Tidbits - Silver Lining: Deduction for Chronically Ill

Most everyone is aware of the high cost of long term care, but many may not realize that it is typically not covered by Medicare or Medi-gap insurance.  This expense can create a hardship for seniors and their families, but there is a way to get partial relief through an income tax deduction.  Taxpayers who meet the IRS definition of "chronically ill" may be able to deduct all of their care expenses, including personal care.  This means if they live in a retirement facility, even rent and meals could be deductible.  In some cases, it is enough to offset all of their federal income tax. 

The IRS defines chronically ill as someone who:

  • is unable to perform at least two activities of daily living for at least 90 days within the past 12 months(activities of daily living are eating, toileting, transferring, bathing, dressing, continence) 
  • OR requires substantial supervision for protection from threats to health or safety due to severe cognitive impairment

Care must be provided pursuant to a written plan prescribed by a licensed healthcare practitioner, although the services do not have to be provided by a nurse.  Obtain a copy of the care plan every year and keep with your tax records.

Here are some examples:

1)  Daisy lived in her own home until January of 2015 when she fell playing badminton and broke her hip.  After a stay in the hospital followed by rehab, she moved to Greenlawn Assisted Living in May of 2015.  Before being released from rehab, the nurse wrote out a care plan stating Daisy now requires daily assistance with dressing, bathing, and cooking. On her 2015 federal income tax return, Daisy may be able to deduct all rent, meals and personal care services paid to Greenlawn.  

2)  Harley has been diagnosed with Alzheimer's disease and, according to his doctor, is in the severe stage.  His children are concerned that he will wander at night and found an opening at Serene Place Dementia Care where he will have supervision 24-7.  All of the payments made to Serene Place are likely to be tax deductible on Harley's federal income tax return.

Keep in mind medical expenses are deductible only if the taxpayer itemizes deductions and has medical expenses in excess of 7.5% of income (10% if younger than age 65).  Also, there may still be state tax to pay since not all states allow a deduction for medical expenses.   

This information is for general and educational use only and not intended as tax or legal advice.  Tax situations vary significantly from person to person so it's always best to consult your own professional preparer for deductions that may apply to you. 

Elizabeth Zeldes, CPA                                                                                                 February 2016

New Year's Resolution: Getting Help for My Parents

When Irene’s son drove in from out of town to visit his mother over the holidays, he saw stacks of mail on top of the refrigerator. There were countless pieces of junk mail mixed in with utility bills, bank statements and a past due credit card bill.  “It’s all so confusing”, complains Irene, “I don’t even know what to do with it all.”

Arthur's daughter surprised her father by flying in just before New Year's.  He apologized for the state of his apartment saying he would have cleaned up had he known she was coming.  She helped by washing the dishes and taking out the trash, but he told her not to touch the dozens of yellow post-it notes that were stuck all over the apartment with reminders for everything from taking his pills to paying the rent. 

For family members who live far away, visiting Mom and Dad over the holidays can be an eye-opening experience.  Once they realize their parents need more help, what's the next step?  

Grand Rapids and Kent County, Michigan has a strong network of services available for seniors.  Home health agencies can provide cleaning, medication assistance and meal preparation. You can findthem in the directory compiled by the Caregiver Resource Network at    For assistance with mail, paying bills and day-to-day finances, look for a CPA or daily money manager with specialized knowledge of eldercare.  Learn more about Senior Advisory Services PLLC and the daily money management services we offer by calling (616) 920-1999.    

Medicare Open Enrollment

 Senior Advisory Services PLLC                                           October 2015


Now through December 7, 2015

CAUTION: Do not give your Medicare number to anyone who calls you about Medicare plans. Only share information when you are the one initiating the call. 

What is Medicare Open Enrollment? A once-a-year opportunity to select a different Medicare Part D or Medicare Health Plan

What happens if I do nothing? You will automatically be enrolled in the same plan you have currently, but beware your current plan may be unavailable or cost more in 2016

When do I have to decide? Select and enroll in a plan by December 7. The new plan will begin on January 1.

Why should I read this? One of the best ways to save money on healthcare is to shop around for the most cost effective Medicare Part D prescription drug plan or Medicare Health Plan (aka Medicare Advantage Plan). Now through December 7 is the only time you can choose a new plan for 2016 (unless you are new to Medicare or dis-enroll from a Medicare Advantage Plan)

How do I choose the best plan? You don't have to sift through the piles of mail you've received from insurance companies. There's an easier way! Medicare has a website that shows you all the options and annual costs based on where you live, your preferred pharmacy, and the prescription drugs you take. If you don't have a computer or need assistance, call the Michigan Medicare Assistance Program (MMAP) at (800) 803-7174 or contact us at Senior Advisory Services PLLC (616) 920-1999.

Medicare Plan Summary

If you are on Medicare you have the following choices:

  • Medicare A, B and D with a Medi-gap plan from a private insurance company OR

  • Medicare Health Plan (aka Medicare Advantage) with prescription drug coverage OR

  • Medicare A and B with supplemental and drug coverage through a former employer (such as the Michigan Public School Employees Retirement System or a private company)

    Medicare Part A

    ...helps cover inpatient care in hospitals, care in skilled nursing facilities, hospice care, medically necessary home health services.

    Medicare Part B

    ...helps cover outpatient care, doctor visits, medical equipment, preventive services.

    Medi-gap (aka Medicare Supplemental)

    ...helps cover what Medicare doesn’t; such as co-pays, deductibles, or travel outside the U.S. Sold by private insurance companies. The policies are standardized and the coverage varies according to which policy you choose. The most common policies are C, F and N. Premiums vary from company to company.

    Medicare Part D

    ...helps cover prescription drugs for those with traditional Medicare and a Medi-gap plan. These plans are regulated by Medicare and sold by private insurance companies. Plans vary by premium, deductible, coverage and co-pays. There is no "best" plan for everyone. Choose a plan based on the specific prescription drugs you take.

Medicare Health Plans

  • Replaces Medicare Parts A, B, D and Medi-gap

  • Subject to Medicare guidelines, but sold by private insurance companies

  • Most use a HMO or PPO network, and may restrict your choice of doctors

  • Co-pays and deductibles vary significantly so thoroughly research a plan to estimate out-of- pocket costs, even if the monthly premium is zero

  • If you spend the winter outside of Michigan, or travel frequently, your healthcare costs may be significantly more under this type of plan because you may need care while outside of the network