Convincing an ailing senior parent to turn over management of their finances to an adult child can be more challenging than taking away their car keys.
After all, Mom and Dad taught their kids the importance of spending less, saving more, and investing for the future. Their sage advice: Pay bills as soon as they arrive, but check them for accuracy. Anything left over after covering your living expenses goes into savings accounts or conservative investments.
It’s heartbreaking when your longtime role model for making smart fiscal decisions starts having trouble managing their basic living expenses.
Bounced Checks, Spendthrift Behavior
It’s important to keep an eye on your aging parents, especially if you seen some serious red flags in your parent’s or grandparent’s actions concerning money. Some behaviors to watch out for:
• Your “every penny counts” father has bounced several checks and incurred overdraft fees. A review of his checkbook shows he mistakenly paid the same supplemental insurance bill twice. His desk used to hold a straightforward filing system for financial statements and other important documents, but now it’s stuffed with massive amounts of junk mail because he’s too afraid he might throw out something important.
• Your mother has, more than once, mistaken an explanation of benefits statement sent by an insurance provider for a huge medical bill. Mom called you in a panic, thinking she could be sued by a medical bill collector. She swears off seeing a doctor ever again!
• Your historically frugal grandfather has uncharacteristically paid $6,500 for sweepstakes entries over the last year and written hundreds of dollars’ worth of checks to a TV evangelist – the one recently arrested for fraud!
It’s scary, and you begin to fear that your parents may make a devastating financial move and lose everything they built up over a lifetime. You don’t want to upset Mom or Dad by offering to “take control” of their money, but you’re not sure how to break the ice.
Start with a Compromise
If your parents are reluctant to cede control, suggest starting with an “unofficial” role of financial monitor. The first step is to set up online account monitoring. Gradually, you can move into a more official role of money manager as your aging parent gets comfortable with sharing control.
In addition, your parents could request that the U.S. Postal Service forward their mail to you. By this time, you should have signing authorization on your parent’s checking account. You can then monitor your parent’s bills and ensure that payments are made on time.
A more formal step is to enlist our help, to draft a Durable Financial Power of Attorney. This legal document allows a loved one (you) to handle a person’s finances when he or she no longer can. It can be written to go into effect immediately, or upon a doctor’s certification that the parent is incapacitated.
Options for Outside Help
Another solution for some families is to hire a licensed and bonded private fiduciary to pay the bills. There is a growing body of professionals who help seniors with no family available to help, or whose loved ones are overwhelmed by the prospect of dealing with a senior’s financial problems.
Most large cities have a Council On Aging. They have bonded representatives who visit the elderly at home and can assist in financial matters.
There are a variety of strategies to address handling a senior parent’s finances. We are here to help you get through this type of challenge, and to help you have the peace of mind you get through solid advice and planning.
We hope this information is useful to you. If you have a specific question, please don’t hesitate to call our office and schedule a consultation.