20 Jan Aging Parents and Finances
It’s quite a role reversal when you find yourself wondering about your parent’s finances. Often, it can feel very awkward to even ask a few questions. After all, these are probably the people who taught you the basics about managing your finances.
Sometimes looking after a parent’s medical care can transition into needing to delve into finances. Or you might notice signals that things are not quite right. Finances can often get off track because those living on a fixed income don’t have as much money as they used to and expenses, especially medical, can increase. The loss of a spouse can also cause a significant decline in household income.
Here are a few warning signs that should trigger further investigation and conversations:
Bills are left unopened and checks are bouncing
Fear and frustration can often lead to complete denial. Today’s seniors are often computer savvy and yet get into trouble with online ordering or clicking on a link that leads to trouble. Even if finances are in order, unexpected expenses can mess up an entire budget. Many are too proud to admit they need help.
One friend found her mother was spending an inordinate amount of time with the Home Shopping Network. This was only confronted after she found 21 sets of sheets in the linen closet. Another friend discovered her mother was spending recklessly on gifts for grandchildren along with contributing to every charity solicitation she received.
Seniors are also often the prey for telemarketing scams. According to the Federal Trade Commission, 80 percent of scam victims are over the age of 65, especially those who live alone and look forward to the phone ringing.
Other areas of life are getting messy
If appointments are being missed or medication is forgotten, there’s a real chance that the household finances are being neglected as well.
Once you’ve decided to begin the conversation with your parent or parents, here are a few areas that should be tackled immediately:
What, if any, estate planning has been done? Do they have an attorney? May you contact the attorney? Where do they keep their legal documents?
Do they have additional insurance besides Medicare? Is there long term care insurance? Do you have permission to speak with their doctor(s)?
Income and Expenses
What is the household income and what are the debts and expenses? Is there an emergency fund? Where are bills and other related documents kept?
Where are their tax returns? Who prepares them? Where are their bank accounts, brokerage accounts and any other assets? Do they bank online? Where are their user names and passwords?
If a parent loses the ability to remain financially independent, you can gradually take over some of the responsibilities. Ask if they have ever had a problem remembering to pay a bill.
If you have siblings, be transparent in dealing with your parent’s finances. Keep track of every transaction done on their behalf. Don’t ever co-mingle their money with your own.