How To Start Managing An Aging Parents Finances

Managing Elderly Parents Finances

There’s an old joke that goes something like, “If I had known parents were going to be such trouble, I’d never have gotten any in the first place.”

It’s unfortunate that, in many cases, as our parents age, they face more challenges when it comes to managing their finances. Physical illness, declining mental acuity, and other issues can contribute to financial woes later in life. However, it is fortunate that many parents have children who can help them through these trying times.

While this role reversal may be hard for some individuals, it’s nonetheless necessary. Here is what you need to know to get a start in helping manage an aging parent’s finances.

Know When To Step In

You may have noticed aging parents moving slower or perhaps not exhibiting the same sharpness they may have a year ago. When you first begin to see this, you have to have a hard, honest conversation with yourself about what you’re witnessing and ask yourself some questions.

• Are their bills being paid on time?
• Are they being hounded by creditors?
• Do they have all the food and any needed medicines they need?
• Does it seem like they’re being asked for money by people you aren’t familiar with?
• Do they have a lot of unopened mail? This could indicate either forgetfulness or anxiety related to aggressive demands from creditors or charities.

The hardest part of all this is having that first conversation with an aging parent. Begin by being compassionate and patient. Try not to sound accusatory or condescending. Your parent may be getting on in years, but dignity is important no matter your age.

But if the signs are clear that they’re having difficulty managing money or are making some questionable financial decisions, you need to open up a dialogue. Outline that you’re concerned they have enough resources to get along for years and years to come. Point out that people their age are often victims of fraud and identity theft and that criminals have grown more sophisticated and clever. It’s often challenging to realize they’re becoming victims of a crime until it’s too late.

Having “The Conversation”

After being confronted with the idea that they made need you to take greater control over their finances, an elderly parent may feel defensive or upset at first. If you’re having trouble getting them to talk with you, see if you can find a close family friend to help.

Some other ways you can approach the conversation can include:

• Talk about all the things they did right as you were growing up, and now you’re trying to return the favor.
• Mention what plans you’ve made for your family and their future if something happens to you.
• Ask them what their priorities are and what’s essential for them.
• Talk about how important it might be for them to hold on to their assets like their home, cars, savings, etc.

Focus on security and how you want them to feel secure as they get older and not have to worry about what the next day might bring. If they allow it, they can rely on you to help.

The Legal Tools For Managing Your Parents’ Finances

While you don’t have to draw up legal documents to help your parents, it’s often a good idea. This gives you legal authority when it comes to helping your parents manage things as they get older. Tools to consider can include:

• Durable Power of Attorney For Asset Management – This legal document allows individuals—in this case, an elderly parent—to appoint another person (you or another trusted relative) to act on their behalf in financial matters. This would allow you to write checks, pay bills, control access to bank accounts, manage investments, and more. However, it cannot be used to make health care decisions.
• Healthcare Power of Attorney – Another legal document allows a parent to assign another individual to make decisions concerning medical care in case of incapacitation.
• Living Will – This specifies what sort of medical treatment your parent would and would not want to be used to be kept alive. This legal document also includes preferences for such medical decisions as pain management and organ donation.

Speak with a qualified attorney to get more information on these and other legal documents that may help your family.

Action List For Getting Your Parents’ Finances in Order

To get started in helping manage your parents’ finances, go through these steps:

• Make a record of your parents’ personal information, including social security number, birth date, and place of birth.
• List all financial and investment accounts, including utilities, mortgage, rent, and credit cards.
• Gather up all statements and documents related to those accounts.
• Create a payment schedule for all bills and submit timely payments.
• Make a list of all your parent’s assets. If they have a safe deposit box, take inventory of that as well.
• Determine what professional such as attorneys or financial planners you may need to help plan your parents’ future.
• Seek the advice of an attorney with experience in elder law concerning guardianship.

Don’t Hesitate To Consult With the Experts

Dealing with aging parents can be difficult all on your own. However, an attorney with experience in estate planning can make things a lot easier for everyone involved.

The expert teams at Heban, Murphree & Lewandowski, LLC are standing by, ready to answer your questions and guide you through the process of drawing up the legal documents that will help you care for your aging parents. Call now! 419.662.3100