The National Council on Aging suggests that planning for the inevitable need to take over your parents’ finances should begin with a family meeting, ideally while they’re in their early 60s. Another watermark can be when they retire. Even if those years have passed, family caregivers should still be on the lookout for signs that “the time has come!” One thing is sure, you mustn’t let any awkwardness you feel prevent you from stepping in to assist, because if you don’t, others will, and they probably don’t have your parents’ best interests in mind.
What You Need to Know
Even if you currently have no worries about your parents’ physical or mental health, start to familiarize yourself with their finances. The sooner you integrate yourself into that element of their lives, the more comfortable they’ll be including you in important decisions, and the easier it will be to take full control when the time is right. It’s never too soon to gather the information you’ll need, so you will have it when your elderly parents can no longer take care of their finances. This is a list of 10 pretty standard things that all family members should know:
- If they have named a durable power of attorney (POA) to manage their finances
- Where they keep their financial records and how you can access them
- Their bank account numbers and the names of their financial institutions
- What their monthly expenses are
- How they pay their bills: by check, auto pay, online banking, etc.
- What their annual income is, and where it comes from
- Who has permission to manage their Medicare, Medicaid or Social Security accounts
- Do they have medical health insurance in addition to Medicare
- Do they have long-term care insurance
- How to contact their accountant, financial planner or attorney
Not My Parents
Regardless of the underlying reasons, it is highly likely that your mom &/or dad will require help someday. Yet, many of us miss the warning signs. It’s common for loved ones to overlook the subtle indicators that something is not quite right. We don’t want our parents’ abilities to decline. Subconsciously, perhaps, we don’t want to know that they already have. Unfortunately, most aging parents will need help for a variety of reasons that can develop slowly or abruptly. Be observant. If you notice a problem in any aspect of self-care, there might be problems managing other areas of independent living, including finances.. If you do suspect that cognitive abilities are beginning to fail, one key thing to look for is disorganization.
What to Watch For:
Difficulty with activities of daily living, such as eating, bathing, getting around, housekeeping, meal preparation, and managing medications are often indicators that there could also be an increased risk of inability to manage finances. Physical illness, side effects of medications and loss of a spouse are common causal factors.
Caring.com has a great list of trouble signs that your parents are beginning to lose track of their finances:
- Unopened mail begins to pile up in their house
- They become forgetful about cash
- They start getting calls from creditors
- Their house is filled with expensive new purchases
- Their gambling increases in frequency and amount
- They complain often about not having enough money
- They have difficulty with simple tasks, like bill paying or balancing their checkbook
Some related indications might be:
- Can’t get the checkbook to balance; checks bounce
- Buy unneeded items from TV shopping channels or mail order catalogs
- Charge medications and forget to pay the credit card bills
- Donate money to charity that they can’t afford to give
- Buy lottery tickets or make other unwise investments
Are they Susceptible to Fraud?
Before I completely took over his finances, my dad fell victim to fraud. He lost $4,000 so quickly that, even though I suspected something was amiss, I couldn’t prevent it from happening. The one good thing to come from it was he finally agreed that it was time for me to oversee all his purchases and pay all his bills. It was a hard lesson to learn. This scam started with a phone call from “a nice young man.”
How can you tell if your loved ones are susceptible to fraud? A recent study shows that psychological challenges like depression make some senior citizens much more vulnerable than others. “Feeling lonely, disconnected or ignored made people more likely to respond to the friendliness and ‘caring’ exhibited by scammers.” Those who exploit the elderly already know this. But this discovery gives concerned family members the opportunity to assess, intervene and perhaps prevent some of the fraud.
For any age, the best way to prevent fraud is awareness. The FBI maintains a list of the most common scams directed at seniors. Make time to discuss safety and personal protection with your elderly loved ones and give them some tools to help fraud awareness. Report any mail scams like sweepstakes, free prizes and vacations, and fake donation requests to the U.S. Postal Service.
It’s Still Their Money
As long as your aging parents are competent, they have the right to choose how to spend their money and make their own mistakes. The goal of other family members should be to help them retain their independence and their financial security for as long as possible.
There’s no one best way to take control of your parents’ finances, but waiting too long and doing nothing increases the chance that the people you love might fall into a financial tailspin from which they might not be able to recover. In next month’s blog, we’ll talk about some “best practices” for how to take over elderly parents’ finances. In the meantime, begin the process of becoming involved with this part of their lives.
Dakota Home Care provides services to help seniors who need assistance with the chores of daily living. An experienced registered nurse will visit your home to evaluate and assess the patient’s and the family’s needs. We work with the patient, family and home care staff to draft and implement an individualized plan of care.