Taking Care of Elderly Parent’s Finances

Physical or cognitive changes to a parent’s health can thrust children who have little knowledge of their parent’s finances to take control.  Here are some steps a family can take to prepare for the unexpected.

  1. Take notice of changes in a parent’s health. The earlier you recognized physical and cognitive changes in your parent health the earlier you can plan.
  2. General Discussions. Parent – child discussions should take place early rather than at the time of a crisis.  Preserving wealth and transferring wealth are reduced when decisions are made under stress.
  3. Prepare a listing of all items of value and documents. Include a written detailed listing showing names of bank accounts, brokerage accounts, life insurance, real estate, collectibles, jewelry, and other assets.  Include vital documents in the listing, such as wills, insurance policies, tax returns, trusts, health directives, power of attorney, and where they are kept.
  4. Prepare a power of attorney. In the event, a parent is no longer able to handle their financial affairs an assigned power of attorney will allow another person to oversee the finances.  Don’t wait, for a power of attorney to be valid, your parent must be competent at the time of signing.
  5. Validate the will. Make certain the will correctly stipulate how a parent wishes their assets to be divided after they are gone.
  6. Signs of financial abuse and exploitation. Unfortunately, older adults are often the victim of financial abuse and exploitation. Perpetrators include spouses, children, relatives, friends, identity theft, IRS scams, caregivers, contractors, unsolicited emails and telephone calls.   Factors such as loss of a spouse, loss of friends, sickness both physical ailments and mental changes, and loneliness all contribute to increasing the chances of a parent becoming a victim of financial abuse and exploitation.