March 8, 2021
Tips to Manage Aging Parents Finances
As unfortunate as it may sound, there will come a day when your parents are no longer able to manage their finances on their own. After being your caretaker for many years, it can be hard for them to ask for help, even if they know they need it. Therefore, it is very important to be both sensitive and positive in your approach to assisting your parents with their finances as they grow older.
The sooner the conversations begin, the better. It is much easier to handle things before issues arise. It is a difficult subject to bring up, but it is better to start a dialogue sooner rather than later so that everyone is on the same page.
Like all things personal finance, it can take much patience and waiting even years until parents want to accept your help. Therefore, you want to understand as much about your parents’ finances as you can as early as you can so you are prepared for when the time does come. At the very least, they should decide who will handle their financial affairs if needed and give written consent in advance.
When beginning the transition to managing some of your parents finances, increase support a little bit at a time. You can do things together first, and then only fully take over if necessary. Start with the basics - where are their financial records kept, which financial institutions are used, how the bills are getting paid, what their insurance coverage is, and for passwords to any important accounts. Once you have more information, you can help organize all of their documents and accounts. You should be sure everything is secure, valid, up to date, and in good standing. Another step to simplifying financial tasks is setting up direct deposits for income from retirement retirement accounts and automatic bill payments.
As you take over more and more of their day to day finances, it is necessary to keep the rest of the family looped in. Estate planning among siblings is extremely important to start as early as possible to avoid the possible chaos that can ensue. These disputes can lead to lengthy and expensive legal actions, and even worse, family turmoil. The key is to prepare early and gradually, always remembering to work together towards helping your parents manage their finances.