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When caregiving entails handling finances

One in four American families _ about 22-million households _ cares for someone 50 or older. In addition to providing help with their physical needs, such as bathing, dressing and monitoring medications, caregiving often involves money management.

When it comes to finances, the typical caregiver helps with or arranges bill paying, deposits, insurance and benefit claims, and savings and investment decisions.

Some caregivers' duties may entail monitoring a relative's finances while the elder continues to live on his or her own. Whether overseeing a relative's money matters from down the street or across the country, there are ways to streamline the process.

Usually the best approach is to take preventive steps before an older relative becomes ill or disabled. In a special issue on financial caregiving, the Federal Deposit Insurance Corp. (FDIC) quarterly Consumer News publication offers the following preventive tips for caregivers.

+ Make sure the family knows where to find personal and financial documents in an emergency. Explain to the older person that your interest is not to pry into personal financial information but to know what documents to look for and where to find them in an emergency. That way you can help protect their assets, including dividends, interest, insurance, pension, Social Security benefits and the contents of their safe deposit box.

+ Obtain access to bank and brokerage accounts in an emergency. To write checks or withdraw funds, you or someone else your relative trusts should become a joint owner of a bank account or simply make arrangements through the bank to be authorized to conduct transactions. Because of the possible pitfalls or complications of giving someone else access to an account, a banker, attorney or other qualified professional should be consulted.

+ Consider automatic payment of important recurring bills. You can arrange for water, electricity and other utility bills, along with health insurance, mortgage or rent and other regular commitments to be paid electronically out of your relative's checking account. This makes bill paying easier and prevents interruptions in service if required payments aren't made. You can also arrange to be notified if your relative misses a payment.

+ Consider direct deposit of pay and benefit checks into bank and brokerage accounts. Many consumers are leery of direct deposit and other forms of electronic banking. But most experts believe direct deposit is safer and more convenient than paper checks. There are no delays in getting funds deposited, no checks are lost in the mail, and you can request notices of each payment and deposit for an accurate accounting record. Beginning in 1999, all federal wage and retirement payments must be sent electronically.

But what happens if an elderly family member needs help managing finances, and you aren't able to help? Because so many seniors today don't live near their families, and so many women _ the traditional caregivers _ are working outside the home, a new service industry has evolved: Daily Money Managers (DMM). Adult children sometimes use a DMM if they don't have the time or ability to maintain their parents' financial affairs.

DMMs provide personal, business and social support to clients who have difficulty managing their personal finances. Their services range from organizing and keeping track of financial and medical insurance papers to assisting with check writing and maintaining bank accounts.

Social services may include arranging for in-home care and medical appointments and providing information regarding community resources available to meet other needs.

DMMs do not take the place of professionals in the accounting, investment or social services fields. Rather their work complements the work of those professionals by completing day-to-day tasks. For example, a DMM can compile the necessary documents that an accountant may need to prepare a client's tax return and then make sure the check is written and the return is signed and mailed.

To find a DMM, seek referrals from someone you trust such as a friend, relative, doctor, accountant or social worker. You can also contact your local Area Agency on Aging, senior center or church. Or you can contact the newly formed American Association of Daily Money Managers at 1006 Playford Lane, Silver Spring, MD 20901; (301) 593-5462. Fees usually range from $25 to $60 an hour, depending on where you live.

The American Association of Retired Persons is also a good source of information for caregivers, including lists of support groups around the country and guides on financial matters. Write to AARP at 601 E St. NW, Washington, D.C. 20049.

Mary Beth Franklin writes the personal finance column for Third Age News Service. Find her online at