Caring for an aging parent is a common challenge for Baby Boomers, and now even Gen-X’ers and Millennials. And, stepping in to help manage your parents’ finances, without eroding their sense of independence and privacy can be a tricky endeavor.
Many aging parents are reluctant to ask their children for help with their finances. It means a loss of control, a trading of places (from them taking care of you to you taking care of them), and can feel quite frightening for your parents.
Nevertheless, you may be wondering what you can do when your parents start needing help.
A pile of unpaid bills, threatening calls from creditors or repeated instances of credit card fraud or financial scams are good indicators that your parent needs help managing his or her finances.
Financial caregiving is easiest when you already have a plan in place. You may be in a good position to make educated decisions about their finances, but without the proper information and legal authority, your options are limited.
If your parent needs help, the first step is to make sure you know what they have, where it is, and how you can access it, if necessary.
Next, you want to make sure you know what bills are due, when and that their bills are being paid on time.
Unless you have the legal authority to manage your parents’ finances, you will need their help in getting access to their account and setting up auto-bill pay for them.
When you are ready, the first place to start is with a heart to heart conversation about whether your parent is ready for help and what that help could look like.
Then, if your parent is ready, you can ask him or her (or them) to legally designate you as either the Trustee of their trust or financial power of attorney holder, depending on the issues. And, be sure you are also designed as medical power of attorney, so you can make important care-giving decisions for your parent(s) if he, she or they cannot.
This is also an opportune time for you to consider your own long-term financial planning. By helping your parents and getting your own affairs in order, you are making things as easy as possible for each generation in your family. What an incredible gift!
Dedicated to empowering your family, increasing your wealth and building your legacy,