4 Tips for Helping Aging Parents

Many of the clients we work with are pre-retirees and retirees. They’re focused on ensuring that they are financially set to lead the lives they want in retirement. Often, at the same time, they find themselves pulled in another direction helping their aging parents with their own finances.

In some cases, you might be dealing with diminishing capacity, so you’re having to take over managing your parents’ day-to-day finances, such as paying the bills. Sometimes you just want to make sure you have your arms around their estate plan and where their accounts are situated in case something happens unexpectedly. Regardless, if you have aging parents, here are 4 tips for how to approach the situation:

1. The sooner you can get involved the better – Not every parent will be willing to freely share information about their finances. Afterall, finances are very personal. However, the sooner you start these conversations as a family, the better off everyone will be as the process can be quite involved. You want to put everyone in the best position to take action whenever necessary.
2. Obtain copies of all their statements/policies – Taking an inventory of where everything is situated can be helpful for everyone, so nothing ever gets missed. Then you can use these to build a basic net worth statement for an overview of all your parents’ assets. Additionally, sometimes reviewing these can lead to better organization. Perhaps there are accounts that can be consolidated or moved to the same financial institution. You can also use these statements to set-up online access and to enroll in paperless statements. This can simplify your parents’ lives, give you a broad view of what’s going on, and help to address potential cyber security risks.
3. If appropriate, look to establish Power of Attorney – If you are at the point where you’re getting much more involved in your parents’ finances, setting up a Durable Power of Attorney can be extremely helpful for everyone involved. A Power of Attorney is a legally-drafted document that provides you with the authority you need in order to act on behalf of your parents financially. Keep in mind though that even if you share a copy of this Power of Attorney, many financial institutions will still require additional paperwork be signed to financially give you the access and authority you desire.
4. Introduce them to a professional as needed – If finances aren’t something your parents feel comfortable talking about with you, sometimes bringing in a financial advisor can be helpful. Financial advisors can organize and strategize to ensure everything is situated the way it needs to be to support your parents. Sometimes having a neutral third-party who is not your child can feel more comfortable for a parent. Additionally, this helps to take the responsibility off of you, if you don’t have free time to dedicate to these efforts.