Watching our parent’s grow older is a difficult concept for many, especially as the roles of parent and child begin to shift. You may find yourself doing more of the caretaking not only for their physical health, but also for their financial well-being.

As your parents age, they may begin needing your assistance when it comes to managing their personal finances. Money is usually a pretty private matter, so unless they’ve come to you directly and asked for your guidance, it may be bit uncomfortable to start the conversation. But it’s an important conversation that needs to be had to help ensure their long-term care is in good hands. Below we discuss why it’s important to become involved in your elderly parent’s financial matters as well as what you can do to begin helping them.

Why You Should Get Involved

Baby boomers and the Silent Generation now have a higher chance of being defrauded than those who are younger. It is estimated that collectively, seniors are losing up to $30 billion a year to elder financial abuse. This abuse is not only inflicted by strangers, but also by friends and relatives. In one of our previous blogs, we discuss the importance of protecting your parents from financial abuse in 2021, as well as warning signs to watch out for.

Tips Before Starting the Process

Before you dive into the process of helping your parents with their financial affairs, there’s a few things you’ll want to keep in mind.

Explain Why You Want to Help

First, let them know your intentions. Do you want to assist them with their personal finances because you’re concerned for their health? Are you worried about their recent spending habits? Or perhaps you just want to be aware of the current state of their finances so you can feel assured their financial health is in good shape. Whatever your reasoning, let them know why you want to become involved.

Communicate everything you do

Keep your parents informed about everything you’re doing. This will provide them a sense of comfort and inclusion, and will lead to less misunderstandings. Keep both your siblings and your parent’s siblings in the loop too, so that everyone is agreement on any and all financial decisions.

Listen to their Perspective

Carefully listen to their wishes. Although you only have their best interests in mind, you may still disagree on certain financial aspects. Always hear what they’re saying and be sensitive to their desires. At the end of the day, it’s their life and their finances, so go about the process with full respect.

With these considerations in mind, let’s explore how you can begin helping your parents with their financial arrangements.

Consider a Power of Attorney

The process of managing your parent’s finances is going to be made a lot easier if they’ve granted you a Power of Attorney. This is a legal document that lets a principal appoint an agent to make decisions on their behalf should the principal become incapacitated. There are several types of decisions that the agent can be granted the power to make, which includes the power to

Make financial decisions
Make gifts of money
Make healthcare decisions
Recommend a guardian

Using a Power of Attorney with your parents will provide you with the legal authority to execute important financial decisions when they are no longer able to, or if they just want an extra hand. You’ll be able to legally check on their bank accounts, write checks, and more.

Take Inventory of Legal Documents, Accounts, and Contacts

An important step for managing their finances is gathering information about their essential legal documents, account information, and their contacts. Here’s what you should make a list of:

Parent’s contacts such as financial advisor, attorney’s, and their insurance agent
Account numbers for bank and investment accounts
Usernames and Passwords
Insurance policies
Medicare and social security number
Driver’s License
Deeds and Wills

Review everything and make sure all documents are still valid and up-to-date, and that all bank accounts are in good shape. Whether you’re actually going to gather all the documents or just take note of where they’re located, be sure that all information is stored securely.

Even if your parents aren’t at the point where they want you to get involved, having them compile their key financial information will make thing’s a lot easier when they are ready for you to step in.

Utilize technology to help them from a distance

Perhaps you’re not able to help them with their finances directly in person because you’re practicing social distancing or because you live in different areas. Luckily with today’s modern technology, it’s easier to share financial information from afar. Helping them sign up for auto-pay services for their bills will calm both your concerns about missing deadlines. If they’re using online banking, you can just as easily check their accounts.

Long-term Care Considerations

An important decision your parents will have to make is where they want to live as they age. Whether they want to continue living at home, move in with family, or live in a retirement community, the earlier you know their wishes, the longer you have to plan for their long-term care.

You should also find out whether they have long-term care insurance or any plans to afford their care. If they do have long-term care insurance, obtain a copy of the policy and determine the requirements for receiving benefits, therefore you’re ready to help them file a claim when the time presents itself.

Seek Assistance from a Financial Professional

The process to begin managing (or help manage) your parent’s finances is no simple ordeal nor will it be completed in one sitting. If it feels too complicated or you’re not sure where to begin, a financial professional can be a valuable resource to your parents by assessing their financial picture, inform them about the implications of their financial decisions, and help them communicate their desires and wishes to the family. Knowing your parents have an unbiased advocate will bring you all a peace of mind.

Investment adviser representative and registered representative of, and securities and investment advisory services offered through Voya Financial Advisors, Inc. (member SIPC).
Archstone Financial is not a subsidiary of nor controlled by Voya Financial Advisors.

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