By Michelle Glassburn
Q: My friend is struggling to manage her parents’ finances as they age. What can I do to prepare for that process?
A: Too often, families wait until a parent has a medical emergency, or their health has deteriorated significantly before discussing finances. At that point, families often struggle to find the information they need and obtain the authority to act on their parents’ behalf. Even worse, the transition can cause family strife. Parents struggle with the sense that they are losing independence. And siblings can also experience strife during these transitions. The child managing the finances often feels overburdened with the workload, while brothers and sisters might feel distrustful and shut out of the process.Just getting the money conversation started can be a challenge, so evaluate your options for breaking the ice. To start, share steps you are taking to prepare for your own future (I’m sure you’ve done all this!) such as setting up a will, hiring a tax or investment professional, pulling credit reports. You can also offer to help your parents with just one aspect of their finances – like preparing taxes. This will help to build trust and open the door for future conversations. And, be sure to involve the entire family. The National Council on Aging suggests that families begin talking when parents are in their 60s.
Here are some steps:
1. Look for early signs that they might need extra help. This may include unopened mail, collection calls or unusual purchases.
2. Ask them to list their accounts and property (including monthly bills, bank accounts, investments, insurance, etc.). Know where this list and other important documents, such as birth certificates, deeds and Social Security cards, are kept.
3. Ensure that beneficiary designations and estate planning documents – including wills and powers of attorney – are current. This is particularly important if there have been recent births, deaths and divorces. For professional help, you can find a listing of Elder Law Attorneys in your area through the National Academy of elder law attorneys (www.naela.org).
4. If you end up managing your parents’ finances, keep siblings in the loop. Regular updates will cultivate a healthy level of trust.
5. Be sure your parents are on the Do Not Call registry (www.donotcall. gov) to avoid telemarketing calls. If you believe they have been victims of a scam or fraud, contact your local Office of Consumer Affairs for help.
Discussing finances is a delicate subject at any time. But by communicating openly, early and often about money with your parents, the transition toward assisting with your parents’ finances can occur in a way that minimizes stress while fostering trust and dignity. And, remember that the steps you take to help your parents manage their money as they age are the same steps you will take as you prepare for your financial future!
