Any conversation about money is rarely easy and it is something we struggle with as a society. In a Wells Fargo survey, almost half (44%) of respondents said personal finance was the most challenging topic to discuss with others. Topics ranked less difficult were death (38%), politics (35%), religion (32%), taxes (21%), and personal health (20%).
Most elderly parents resist the idea of someone else taking over their personal finances. But, as your parents grow older, it’s wise to have conversations about finances and personal health sooner rather than later. Even if your parent has no trouble managing finances now, it’s still a good idea to have an initial talk and begin taking a few precautionary steps. It’s never too late to plan for the future.
Starting the Conversation
It’s better to start the conversation before problems begin to surface. This way, it’s easier and less stressful when the time comes to step in. Always approach personal finance conversations with patience, love, and respect. Aging comes with many changes and difficult transitions. Finance is just a small part of what your loved one is experiencing. Do what you can to make this a smooth transition. If they refuse to discuss anything, consider getting a neutral third party involved. A financial advisor or a lawyer experienced in elder law can lead the discussion, present options, and help your parents understand the importance of planning ahead.
Know the Signs
Watch for signs your parent or loved one may need some extra help with finances. Starting a conversation when you see early warning signs will make it easier for you to step in when needed and will lessen the chance of future complications. Common signs include:
- Unusual purchases or buying things that don’t fit their needs or lifestyles
- Entering contests or sweepstakes (older people are often specifically targeted by scammers)
- Stacks of unopened mail
- Not paying bills on time
- Mixing up or confusing their accounts
- Memory problems
Taking Small Steps
Once you’ve got the conversation going, begin taking some small steps forward. Don’t take over everything at once, but be there to offer support.
Help Your Parents Get Organized
Even making a list of financial advisors, account holders, and account numbers can make it easier for your parent to manage their own money. Remember to store all sensitive information in a secure place.
Simplify Financial Tasks
Other small things can help take some of the stress away from managing finances. Offer to come over once a month to help pay bills. Set up direct deposit and automatic bill pay. Review their household budget and make adjustments with them as necessary.
Locate Important Documents
Knowing where your parents keep certain documents is critical in an emergency situation.
- Bank statements
- Car title
- Home mortgage
- Insurance policies
- Pension records
- Power of attorney documents
- Safety deposit boxes
- Social security payments
Keep Family Informed
Your parent should stay involved in their finances and financial decisions for as long as possible. With their permission, share your plan with other family members. This helps avoid complications and potential misunderstandings later on. Consider holding a family meeting to discuss finances and keep everyone updated on major developments. Keep detailed records of significant decisions and actions in case there are misconceptions or disputes in the future.
Taking Bigger Steps
Access to Financial Accounts
Having authorized access to your parent’s bank account requires planning ahead and some specific paperwork. Banks have strict rules about who may access accounts and will likely require you to complete their own documents even if you already have the power of attorney. If your parent has a safety deposit box, they can authorize a deputy or agent.
Before getting joint access to any accounts, you may want to consult an elder law attorney or financial planner to avoid unintended consequences. A joint account could affect Medicaid and/or long-term care eligibility. Other unforeseen issues include gift taxes, shared liability, and estate/inheritance complications.
What kind of health insurance does your loved one have? Is it through an employer or pension plan? Do they have a Medicare or Medicaid plan? These programs may require you to obtain additional permissions to manage your parent’s account. Does your parent have long-term care insurance? Normal health insurance plans do not cover the cost of senior living facilities and long-term care plans can vary widely. If they have a policy, but can no longer live alone, what kind of care can they afford? Be sure to talk with local senior communities about their services and payment options.
Wills and Power of Attorney
Ask your parents the status of their will, living will, and power of attorney.
A living will is a document in which a person states their wishes for end of life medical care. While it can be emotionally difficult to talk over these scenarios, a living will is used by family members and doctors to make medical decisions when a person can’t communicate or make decisions for themselves. A will is a document expressing someone’s wishes about how their property is distributed after their death.
Power of attorney is a legal document giving you the authority to make decisions on someone else’s behalf. It would allow you to pay bills, manage investments, or direct medical care. If something happens to your loved one and no one has been appointed as their power of attorney, you may have to go to court to get the authority to handle financial and medical matters.
If your loved one doesn’t have a will, an estate plan, or someone with the power of attorney, now is the time to meet with a lawyer and begin the process. Not having an end-of-life plan can cause stress and anxiety. Taking time to sort through these details may help put your loved one’s mind at ease.
Planning for the Future
Talking about future living arrangements is a logical next step when talking through personal finances. If your parents aren’t able to live alone, where would they prefer to live? With a family member? In a senior community? Explore the various senior communities in your area. Ask about their availability and the possibility of taking a tour. If in-person tours aren’t possible, virtual tours or video walkthroughs may be an option.
About Sunset Senior Communities
As one of the largest Christian-based nonprofit organizations in West Michigan, Sunset Senior Communities provides high quality and compassionate services designed to care for each residents’ total well-being. With a wide range of services and care options, we will customize a care plan to fit each individual’s unique needs. Contact us about our services!