As parents approach their elder years, often times they will need assistance, which leads to many children taking on that responsibility. Among other things, this responsibility usually includes taking over the parent’s finances. In a recent study by Merrill Lynch and Age Wave, 92% of caregivers were found to be providing some sort of “financial caregiving,” which was defined as things like paying bills on behalf of a family member, handling insurance claims, filing taxes, etc.
When and How to Begin the Process
The best time to broach the topic of financial caregiving with an older parent is as soon as possible. The longer a child waits to have a plan in place for his or her parent’s finances the higher the chance that bad things will happen. A parent could have a sudden downturn in health, make foolish investments, forget to pay credit cards, or even get scammed by a con-artist looking for an easy target. Any of these scenarios would then drastically change the outlook on a parent’s financial future and how a caregiver will be able to manage it.
Many parents will never admit when they need help because they are either too proud to ask, do not want to be a burden, or do not even realize they need it. That is why it is best to be upfront with your older parent or parents and explain that needing help in some aspects of life is not uncommon. Explain that having a financial caregiver will not only relieve stress on them, but also on their loved ones, since someone will be familiar with the parent’s financials if something happens.
What to Do
Now that you’ve had the conversation about becoming your parents’ financial caregiver and they have agreed, it is best to take action immediately. What actions you take will depend on the agreement with your parents. Some possible actions are: establishing a power of attorney, putting your name on your parents’ bank accounts, becoming custodian of any retirement accounts, and taking inventory of how much money is coming in and going out.
If the Parent is Geographically Far Away
If your parents do not live nearby, it can be hard to identify that they need help. If you do, it can be even harder to manage their finances. However, there are professional daily money managers that can work closely with you and your parents to help manage your parent’s finances. A good place to start looking for a daily money manager is the American Association of Daily Money Managers. When hiring, be sure to the money manager is insured, bonded, and willing to not only work with your parents, but also with you.
If You Have Additional Questions
If you need guidance in estate planning and would like a plan to assist you and your family through your elder years, please feel free to attend Van’s no-cost estate planning workshop. More information on this workshop can be found on our website under the “Info” tab. To schedule your first meeting or attend our estate planning seminar call (804) 325-1245 or (757) 941-4298.
Editorial Assistance By: Michael Gee - Law Clerk