A recent survey by the National Endowment for Financial Education found that seven in 10 adults say they have difficulty talking to their families about who will make financial decisions on behalf of an aging family member who becomes unable to handle their money.
Part of the problem is the aging parent. Many elders have an attitude of secrecy about their financial situation. Deeply ingrained attitudes are not going to change. You need to work with them, by offering reassurance that you are not trying to take advantage of your parents, or take control over their lives. Reaching this emotional level in the conversation works far better than making an argument that “it’s time, and you’re getting old”. That line just might exacerbate their fears of losing control over their lives.
Most people who have discomfort with the subject of aging parents and finances procrastinate talking about it. In my practice of consulting with elders and their adult children, I see the unfortunate consequences. A crisis comes up and no one has any idea what the parents have or where to find any documents when they are needed. Unnecessary stress and panic on the part of adult children result.
Or, dementia gradually affects a parent until Dad can’t remember what he has or where he keeps records, leading to the expense and necessity of getting the court involved to allow someone else to take over. Adult children regret waiting and doing nothing until they are forced to hire a lawyer and get a court order via a guardianship to get into the parent’s records.
A smart way to prevent the worst from happening to you is to make an appointment with yourself to bring up the subject with your aging parent at a specific time. Planning to do this after a birthday, a family event or a holiday is a good choice. Family may be together. You can ask your parents to extend the visit or your time with them to discuss business. Include any willing family members who may share the responsibility for aging parents in the future. Set a date and time and invite all to be present.
Your approach is a crucial part of the path to success with the difficult subject of money. It is helpful to directly express your respect and acknowledgement of your parents’ reluctance to bring up their finances for discussion. You can put it on yourself: you are concerned that if something went wrong, you would be completely lost as to how to help them. You might also say that you want them to maintain their independence for as long as possible and you are willing to take the lead to assure that, but you can’t do so without the information anyone would need.
There are many dimensions to the conversation you need to have with your parents about money matters. Here are some of the essentials. If it takes more than one meeting, let it be, but at least get started.
1. Legal: have they done estate planning? Who is their attorney? What legal documents do they have in their possession? Is there a will, trust, durable power of attorney for finances and healthcare directive? May you speak with the attorney?
2. Healthcare: what medical insurance do they have besides Medicare? What is covered? Is there long term care insurance? Do they have assets set aside to pay for care at home should they need it one day? What amount is available? May you have permission to speak with doctors?
3. Income and expenses: What income do they have and what are their debts and expenses each month? Where are the records for these? Do they have a financial planner? May you have permission to contact that person?
4. Financial records: Where do they keep their tax returns? Who prepares them? Where are their bank accounts, brokerage accounts and other records of assets maintained? Do they bank online? Where do they keep their user names and passwords?
Keeping electronic or paper records to organize of all of this information for yourself will be essential when a health crisis occurs. If your parent loses the ability to remain independent over time, you can gradually take over responsibilities. Some people start with bill paying when a parent begins to make mistakes, such as paying bills twice or forgetting to pay them.
If you have siblings, be transparent in all dealings around your parents’ finances. Keep track in writing of every penny you spend on their behalf. Do not co-mingle their accounts with your own. This can avert suspicion and conflicts down the road.
Above all, get past procrastination and set up the time for your conversations with your own aging loved ones. You’ll be glad you did.
Check out our latest website: AgingInvestor.com click HERE to learn more
FREE Report: “One Critical Step You Must Take To Avoid Your Aging Parents Debts”
CLICK on the image Below
Testimonials by our readers
"Thank you for the article on the "grey area". It validated what I am currently going through with my Mother. It is so painful for me to go back and forth with her behavior. I just don't know what to do about the estranged sister who has exploited well over $50K of my mother's savings and my Mothers admitted " lack of "will power" to say no to her." Robert
"I do want to thank you for the Webinar you offered. It helped me a great deal as I was facing the need to lead our family in finding a safe living situation for our mother. That information and the other information you offered as downloads gave me much needed guidance when I was feeling tremendous anxiety and uncertainty." Betty
FREE Report: 10 Warning Signs Your Aging Parent Needs Help With Money
Get Quick Tips – Newsletter FREE…. Just CLICK Below
Carolyn L. Rosenblatt, RN, Elder Law Attorney, AgingParents.com Banks and the government collect data on financial elder abuse. No matter how much data the government collects, the problem does not seem to be getting better by any measure. The Office…Read more ›
Carolyn L. Rosenblatt, RN, Elder Law Attorney Death and dying are almost taboo to talk about. Since most folks avoid this topic altogether, we at AgingParents.com thought it deserved some attention. We personally had to face a conversation about it…Read more ›
Most of us understand how pets bring joy to people and why they are important. This is particularly true for older folks who may have lost loved ones and who have also lost regular human companionship. A dog or cat…Read more ›
FREE Report: Mental Wellness Technique For Stress Relief