How to Take Over Elderly Parents’ Finances

You’ve noticed some telltale signs that your elderly parents are becoming less capable of managing their finances. They may be making mistakes or letting bills pile up. (See last month’s blog, “When to Take Over Finances for Elderly Parents.”) Now comes the biggest challenge—how to help them with money matters or talk them into letting you take over completely.

The Best Approach for Your Family

Talking about finances can be a touchy subject, and you may find it especially difficult getting the conversation started. Maybe your parents have been open with you about their finances, but maybe they’ve never shared anything about how much money is on hand, coming in or going out. Some ideas to help you get started might be:

  • Share what you have done to get your finances in order. Then ask your parents if they have done similar things.
  • Share a story you’ve heard or read that’s about what another elderly person has done, as things became more difficult for them to handle their finances alone. Ask what you can do to help them.
  • Involve just a few family members. That can be less intimidating than a meeting with the whole family. You don’t want them to feel like you’re ganging up on them.
  • Focus on how helping them will help you to worry less about them. Don’t focus primarily on their physical or mental decline.
  • Make them part of an ongoing conversation. Let them give as much input as they can and make their feelings be known.
  • Get an objective third party involved, like a religious leader, a family attorney or their financial planner.
  • Preserve their dignity. Be aware of their need to be as independent as possible. Keep the conversation respectful and light-hearted.

Ways to Transition Slowly

If they haven’t already put regular bills, like utilities, on autopay, ask if you can help them set it up, or depending on their computer skills, do it for them. The same thing applies to any income they have. Put Social Security and other monthly incoming checks on Direct Deposit. Arrange for them to meet with a lawyer to establish financial power of attorney with someone in the family, in case they become unable to make decisions.

Simplify things for now and later by consolidating individual retirement accounts and brokerage accounts. With my Dad’s permission, I enlisted the help of the investment counselor I use to look over his accounts, see what could be consolidated and to manage his investments at a level of risk we were all comfortable with. Do whatever you can to ensure that a financial advisor is trustworthy and understands the difficulties that sometime arise with an elderly client.

For example, for a while Dad became obsessed with the idea of buying gold coins. I talked to our counselor, who advised that I bring him in. Without sounding condescending, he explained to Dad the problems related to owning gold that would be kept in his home—you can’t spend it, you risk taking a loss if you sell it yourself to a gold broker, etc.—and suggested that, instead, he invest some of his money in gold commodities. This would allow the counselor to sell the “gold” for Dad at the best price, and in the meantime, to he would also manage it and help maintain its value. Miraculously, Dad agreed.

Get organized and develop a system that works for you and your parents. Put everything in a binder or an electronic file, including insurance policies, property deeds, and all bills and account information. Double-check the accounts against tax returns and 1099 forms from payers. Regularly look at their credit report to make sure they’re keeping up with bills and are not victims of identity theft.

Put One Person in Charge

When it is time to take over, it’s easier to assign one sibling to handle everyday finances and then keep others informed in writing about what is going on. If you have been designated the family financial caregiver and are making decisions for your parents, keeping the rest of your siblings in the loop can cut down on misunderstandings and prevent tension and disagreements later on.

Make a comprehensive list of bank account numbers, account numbers, online usernames and passwords, insurance policies, social security numbers, and legal documents. It can make matters easier to have a low-balance checking and/or savings account be a joint account that includes your name. To make sure that there is no room for confusion, remember to talk to a lawyer about having Power of Attorney for your parent(s). This will allow you to legally make financial and medical decisions on their behalf without intervention from anyone else. A Family Trust that is the beneficiary of all your parents’ assets can help to keep property from falling into the hands of the wrong person. Ask your legal advisor if a Family Trust is right for your family. Be sure there is a will designating how assets in the trust should be allocated.

Look to the Future

Insurance policies can be easily overlooked. Make sure you know where they are. In addition to Medicare benefits, your parents may be entitled to supplemental benefits from former employers or have long-term care policies that they haven’t mentioned. Try to get copies of all policies and documents regarding possible future benefits from your parents or their attorney.

Look into state or federal benefits as well. The National Council on the Aging (benefitscheckup.org) provides information on eligibility for discounts on property taxes, utility bills, health care, and more. The Administration on Aging (eldercare.gov) lists social services available to elderly people, by county.

When it comes to managing investments, the main concern for many families is ensuring a loved one doesn’t run out of money. Whatever you do with their money, if possible, get your parents’ approval and assure them that they will continue to have sufficient funds for the future. A consultation with a financial or investment planner could reassure all of you.

Get the Support You Need

The decision to begin managing your elderly parent’s finances can take a toll on your stress levels. Be sure to seek the support that you need in order to prevent burnout. Dakota Home Care provides services to help your parents with the other chores of daily living. An experienced registered nurse will visit their home to evaluate and assess their needs. We will work with you, your parents and the family to formulate and carry out a customized plan of care. Call us today at 701-663-5373.   

Other Resources for Financial Issues and Aging

  • Area Office on Aging, typically found in every state and often by county. Offers staff social workers and volunteers who can help facilitate discussions with parents and provide advice about how and when to establish financial control.
  • SmartAboutMoney.org, an NEFE site, offers information about how to plan for yourself or for a parent’s diminished capacity to handle money.
  • AARP.org offers a variety of information about money matters for seniors.
  • National Council on Aging offers numerous resources for aging seniors and their families on their site and provides links to local resources.

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