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Elder Law and Estate Planning Blog - Lancaster, PA

Monday, July 23, 2012

Helping Aging Parents Manage their Finances

At some point in time roles are going to be reversed.  No longer will Mom and Dad be telling you that you can't buy this item or that item, but you will have to be keeping an eye on their finances.  As your parents age, they will become more likely to be a victim of a financial predator, something millions of caregivers try to protect their parents from.  This role reversal won't be easy, but here are a few tips to get started.

  • Watch for red flags.  Families are unique, and so are the situations that they live in.  But when your mom or dad stops taking care of themselves, its time for adult children to speak up.  If you notice one thing, something that they're not doing but normally would, chances are that your parents are forgetting a few other things as well.
  • Start small.  As your parents get older, they are going to act like teenagers at times.  You can't tell a teen what to do, and they will not want to be told how to handle their finances.  Several financial advisors recommend giving your parents a book or an audio book on financial matters to show your concern and jumpstart the conversation.  Adult children may also ask permission to see if their parents will give them access to copies of bank statements or set up online banking and automatic bill pay.  Whichever you choose, whether these ideas or your own, make sure you are showing your parents that you want to help, not take over.
  • Stay in touch with people in your parents' lives.  You can't be there all the time, especially if you live in another part of the country.  But you can stay in touch with the people that your parents will see on a frequent basis, whether it be neighbors, friends, or church members.  Also make it a point to meet their financial advisor to buld trust.  The advisor will then know that you, too, want to help and can keep you in the loop about what mom and dad are doing.
  • Keep siblings in the loop.  Sharing responsibilites can cause friction in some families, especially when concerns over inheritance come into play.  Try delegating different tasks to different people, for example your sister living across the country from your parents could monitor finances online while you, since you live down the street from your parents, could handle in person tasks like doctors appointments.
  • Set up a power of attorney.  This legal document authorizes an agent to make financial decisions on behalf of the grantor.  If your parent is willing to sign and notarize one, it could give you greater oversight of their finances.  This can be a touchy subject, but is highly recommended so that should your parent become incapacitated, someone else can still access their finances.

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