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If you’re a family caregiver wondering how to bring up the subject of handling your parents’ finances, you’re not alone. About 92% of family caregivers handle finances for their loved ones, according to a report by Age Wave and Merrill Lynch. This can include anything from monitoring bank accounts to filing taxes or handling insurance claims.
And over time, the responsibilities increase. After less than two years of caregiving, 35% of aging parents need full assistance with their finances. After two or more years of caregiving, that number rises to more than half of all elderly parents handing their financial management over to their caregivers[1].
But getting to that point can be difficult. Because cognitive decline is usually quite gradual, many seniors don’t realize they need help with finances until they are having serious problems. Though they might admit that they are having trouble with health issues and accept various types of assistance to improve their lives, such as a medical alert pendant with fall detection, talking about money is an entirely different matter.
Michael Finke, Dean of the American College of Financial Services, states that it’s important to talk to your parents about finances early on, while they can still make good decisions. “Often, by the time parents have lost their ability to make sound financial choices, they’ve also lost the ability to evaluate who they can and can’t trust,” Finke said[2].
Assessing the Financial Skills of Elderly Parents
Though sometimes an aging parent’s financial challenges are apparent, you still want to get them on board with the idea of someone else handling – or at least helping – with their finances. This can be a hard sell. Many will see someone else handling their money as a loss of their financial freedom, and that can make anyone bristle with indignation, no matter the age!
If you’re lucky, they will talk to you about what is happening and their worries about it. But what if they are truly resistant to the idea that anything is wrong? To that end, it’s time to assess whether your parents really need your help with finances. Here’s how:
· Look around the house. Is there some sort of neat and orderly system for paying their bills and filing away important paperwork? If so, that’s great. On the other hand, are there stacks of unopened mail? Do they ever have trouble finding the checkbook or important documents? This is an indication that help may be needed.
· Look at their checkbook or statements. If they will allow you to look at their statements, is there anything unusual? Any recurring charges that don’t seem to be for anything they actually use, or large amounts of money going to questionable places? Are there double entries for the same bill or bills that appear to skip a month here and there?
· Are they making large donations? Big donations aren’t necessarily a problem if your parents have always given generously and have the money in the bank to cover it. But if they are suddenly giving a great deal of money to charity, it’s worth looking into how much, and why. Many scams that target the elderly can look very much like giving to charity.
· Are they doing much more shopping? Do you see many more shipping boxes or bags around the house than usual? Are there new items around the house that appear to have been purchased from a late-night “as seen on TV” program? These could be signs that your parents are letting their spending get out of control.
· Ask questions. If you do find things amiss in the checkbook or statements, ask your parent for the reasons why those entries look odd. The way they answer the question can tell you a great deal about their financial fitness.
· Talk to other relatives. What have they seen from your parents? Are there any signs of forgetfulness, confusion, or an inability to stay on top of things like they used to? Do they seem to have good cognitive ability? Do they have any concerns about your parents (financial or otherwise)?
· Speak to their medical team. If you have the permission of your parents to speak to their doctor or to attend a doctor’s appointment with them, do so. A physician might have information you don’t about how your parents are really doing.
· What is their cognitive ability like? If your parents are beginning to show some concerning signs, such as the early symptoms of Alzheimer’s, pay attention. Their cognitive ability might seem fine right now but it could soon diminish, and you need to be prepared for any scenario.
· Has there been any significant change? If someone has lost their spouse, that big change could mean other changes as well. For instance, it could be tough for your father to keep up with all the bills when it was your mother who took care of paying them for the past several decades. He might not even know how many accounts she handled and even if he did, he might not know where to find the information he needs. He could probably use your help in getting everything straightened out.
· Are there physical issues? Though mental impairments are the first reason that comes to mind when a parent has trouble with finances, it can also be difficult to impossible for those who have no mental issues at all. Visual impairments can make it tough for them to balance a checkbook or read a financial statement. Physical impairments, such as severe arthritis, can lead to difficulty in signing checks or logging into an account. Many family caregivers are quick to set their elderly parents up with an emergency response solution if they suffer a fall or work on aging in place home modifications to keep them safe, but they might not notice immediately if mom or dad is having trouble with using their laptop or reading their mail.
Are they dealing with depression or anxiety? Finally, keep mental health in mind as well. People of almost any age might turn to “retail therapy” when they are going through a difficult time. In fact, WebMD notes that 62% of individuals bought things to cheer themselves up when they were having a rough day. If your parent is suddenly spending a great deal of money on purchases, consider that it might not be a problem with money management but could be a sign of an issue with their emotional health.
Having the Difficult Conversation
If you find that your careful assessment of your parents’ financial fitness makes you even more concerned, it’s time to have the conversation. And that’s tough on everyone because in most cases, talking about money can be a minefield. Even having the discussion might be seen as a threat to their independence or way of life. They might be embarrassed or ashamed to have the conversation at all. And sometimes, they might even believe that relatives have nefarious intentions, such as wanting to gain control so they can access their money or question an inheritance.
If you can talk about the situation well before any of the problems listed here become an issue, that’s great! You can all come up with a plan on when it might be best for you to step in and help them with finances. The legal website Nolo.com suggests that you talk with parents about potential “trigger” events that indicate a need for help. You might be able to do this by setting account alerts on their banking accounts and credit cards, for instance. When you begin to get alerts that concern you, it might be time to step in.
Another good option for broaching the subject is to ask your parents where they keep certain important documents. They might not like talking about the idea of what happens when they are gone, but they likely understand that you would need to know how to get bank statements, investment statements, and more if something happens to them.
While you’re talking about it, you can also bring up the idea of you following their financial statements. They might agree to have statements sent to your email but not allow you to have any further access if they aren’t comfortable enough to do so. It’s not ideal, but it’s a start.
Talk with them about the possibility of setting up automatic debits from their checking account to pay the bills. This could work especially well if their social security goes into the same account every month.
If things are much more serious than a situation you can sit back and monitor, it’s time to get hands-on. This is the case when unpaid bills are piling up, they are facing foreclosure or eviction, they’ve fallen victim to some kind of scam or fraud, or they are forgetting to file taxes or keep good records. In this case, it’s time to have a serious talk with your parents about what comes next. This is where bringing in professional help can make a big difference. For instance, your mother might not want to listen to you (or any of your siblings) but she might be okay with listening to a financial advisor.
If your parents need help but are very wary about it, ask them to work with you to set up a durable power of attorney. This document can either give you full power over their finances or spell out very clearly what your limits are for handling their money. This allows you to have some oversight of their finances but still allows them to let you in only as much as makes them comfortable.
No matter what solutions you offer, make sure to have the conversation about money at a time when everyone is relaxed and in a good frame of mind. Make it clear that you are bringing it up because you want to protect them. Just as you would suggest a medical alert system with fall detection or installing grab bars in the home to help prevent injury, you’re offering to handle their finances as a way to keep them as comfortable, safe, and independent as possible.
If things start to become contentious, remind them that this isn’t something that must be decided right now, but that it is a conversation that needs to be had – from a loving, caring standpoint of wanting the best for them. It’s important to make it clear that you are trying to support their desire to age in place and remain as independent as possible, and that you can all work together to ensure they enjoy their golden years to the fullest.
Alert1 wishes you and your loved ones health and safety.