Aging Parents, Money and What to Do!
Getting old is hard. Your parents’ ability to manage their own finances may decline as they age. Helping them with money matters is a sensitive issue you need to approach carefully.
When you hit a certain age of your life, you may realize that one topic keeps coming up in conversations with your friends: care for aging parents. The concerns aren’t limited to health care. Managing money is also a big problem.
Parents aren’t likely to recognize their own declining abilities, so knowing when and how to step in to help is important. Here are some tips:
1. Be mindful to maintain your parents’ dignity at all times and remember that they raised you.
2. Watch for warning signs. When visiting your parents, take a look around the house. Are there unpaid bills piling up on the counter? If the things that are normally done are not, it may be a red flag that your parents are struggling with the upkeep. Are your parents becoming more forgetful than normal?
3. Be aware of the people in your parents’ lives. Make sure that you have a list handy of people you can contact, and keep the lines of communication open. Friends, caregivers and church members can offer insight to any changes in your parents’ behavior. Don’t forget your parents’ professional contacts, such as their attorney, doctor, insurance agent and financial advisor. In my experience, we had a caretaker for my mother who turned out to be a bad apple. I was mindful upon my first interaction with the caretaker, but followed my father’s lead. I quickly noticed signs that we should not have this individual in our lives. Others who interacted with my mother and the caretaker, also noticed that things seemed to be off. I brought my case to my father and he agreed and we had the caretaker removed and found a more suitable replacement.
3. Be subtle. Most people have a difficult time relinquishing control over their finances. Try offering guidance and help instead of taking over their finances completely. Keep in mind that your parents have managed their finances for 20, 30, 40 or even 50 years. This becomes less about control than it is a case of independence for your parents.
Suggest that you can help balance their bank statements or set up online banking and automatic bill payments. This offers an excuse to start a discussion on their financial matters and helps relieve the stress on your parents to stay on top of everything. You can also start the conversation by purchasing a book about financial concerns and discuss the book with them.
4. Work with your siblings. Sharing responsibility can be tricky, but keeping everyone in the loop is critical. If one sibling lives closer, in-person tasks may be easier for him or her. Develop a plan of action with your siblings. Set up monthly telephone meetings with siblings to make sure that everyone is aware of the situation and can make decisions together. Keep in mind during the early discussions what each sibling is comfortable and proficient at handling. There is nothing wrong with a sibling voicing their limitations as long as they are able to make up in other ways.
I have a client who is caring for her elderly mother along with her sister. My client knows that she cannot handle the day to day care of her mother, while her sister has no problem doing so. The sisters in this case have worked out an arrangement by which one sister handles the day to day operations of caring for mom, while the other sister funds whatever means are necessary. Both sisters have open communication, are comfortable in their own roles and comfortable with the role of the other sibling. This also goes a long way to prevent resentment and anger when a parent passes away.
5. Prepare a power of attorney. This is a form that authorizes you to make business or financial decisions on your parents’ behalf. If they are willing to sign and notarize a power of attorney, you have greater oversight of your parents’ finances. Your parents must also be mentally competent to sign on their own. Make sure that you notify the family and that everyone knows who has power of attorney. I would also recommend filing this power of attorney with your local county official records and remember to remove all personal information before filing the document as the document becomes a public record.
6. Keep yourself from becoming legally obligated to pay for your parents’ affairs. By this, I mean do not sign as a guarantor for any of your parents’ financial obligations. In my situation, I placed my mother in a nursing home, by way of a power of attorney. I was simply acting as a liaison by choosing the best home for my mother and paying her financial obligations from her resources. The nursing home was insistent on me becoming financial responsible for her affairs by signing as a guarantor. I refused even at their constant request. They were attempting to collect funds from me beyond the death of my mother. Their attempts fell on deaf ears as I had no legal responsibility to my mother’s financial affairs. Many children make this mistake and are left with undue debt after the passing of one or more parents.
No one likes to lose independence. Helping your parents with this transition is difficult, but it’s in their best interest and yours.