Helping Elderly Parents with Finances
Partner
As our parents age, we may find it necessary to help them with their financial affairs. Here are some practical steps to consider:
1. Start the conversation with your parents early
As a child, it is hard to ask your parents about their finances. On the flip-side, it is hard for independent parents to discuss their financial affairs with their children. However, the information shared will be more accurate and helpful if these conversations take place while your parents are able to think more clearly and the situation is not of an urgent nature.
2. Help your parents keep good records
You need to understand your parents’ finances before you can help. Help them establish and keep up a system of record keeping of items such as bank statements, investment accounts, retirement accounts, insurance policies, and estate planning documents. Keeping good records not only will help you be able to understand their financial situation, but it will be helpful if you need to produce records to qualify them for some type of benefit.
3. Make sure estate planning documents are in place and current
In estate planning, there are what is referred to as the “Big 3”: will, power of attorney and advanced care directive. Each of these documents are needed to ensure that your parent’s wishes are known and carried out. Make sure to consult with legal counsel to draft these documents in the state that your parents are residents.
4. Monitor for scams and fraud
Elderly people are targets for fraudulent schemes. Continue to encourage your parents to never give out any personal information to anyone. You may also want to monitor and review their bank and investment accounts and also their credit card statements.
5. Respect their independence
Balancing helping your parents while respecting their independence can be difficult. Offer help without being pushy. Make sure to involve them in decision making so they feel part of the solutions.
The key to helping your elderly parents with their finances is to have thoughtful and open communication with them. You need to approach this task with respect and understanding to help them navigate this stage of life with dignity and security.