If you have elderly, but still healthy, parents, grandparents or other relatives who rely on you – now is the time to think about your role with their finances in the event that you may need to help them manage at some point in the future.
Even if your senior is fully functional mentally, other factors may impede them from properly taking care of the business of life.
For example, my 94 year old Mother-in-law lives in a senior living complex, but is not on assisted living of any sort (other than she gets meals and laundry help). She has been quite alert, but has macular degeneration (which means she can’t see well at all) and consequently, her handwriting is unreadable. She can no longer make out a check to pay her bills. She also walks very slowly with her walker and tires easily, meaning she is slow to get things done. On top of all of this she is a prime target for elder financial scams.
Recently, she fell in her apartment and couldn’t summon help because she stubbornly refuses to wear the call button the family pays for her to use in such situations. She couldn’t get up, was stranded on the floor for at least a day and a half and developed bedsores from the inevitable mess she made.
No one has a power of attorney, let alone a durable power of attorney. The family would have to get a court order to have her judged incompetent in order to get one. This will make it more difficult for the family to help take care of her.
Although I’m encouraging my spouse to be prepared to handle her financial affairs, he is reluctant to do so. Handling someone else’s affairs is fraught with psychological pitfalls. He has 3 siblings – will they think he is trying to take over? She is nearly broke, so it wouldn’t be to get money. He fears that if he starts handling her financial affairs, it will break our bank (i.e. the other siblings wouldn’t volunteer to chip in on the expenses). She is still in her right mind and quite stubborn. There is a lot of history and murky waters between her children and her. She has never voluntarily shared information about her finances. She probably would resent someone handling them for her. Yet, at any time, just that might be needed.
If you have a situation similar to this, how can you prepare? Here are the suggestions I have found and am passing along (or doing with my own grown children).
Have the money talk.
If your parent is willing to talk about their finances, you are lucky. Just start the conversation by letting them know that you aren’t trying to wrest control away, but just want to be prepared in for if and when they might want or need help. Let Mom or Dad show you their filing system, their financial statements, listen as they share with you their cash flow and savings situation. Understand if they want to share the history of special objects they have collected or perhaps inherited from their parents.
Let them make a list, or you start making one to keep track of all of this. Include contact information for medical, dental, insurance, investment, banking, legal, and accounting or business information. If they are willing to share account numbers or social security numbers, let them – but keep the information in strictest confidence and away from the online world.
My spouse and I started yearly family meetings for just these types of purposes. We update both our grown children and their wives with our net worth and prepare and updated home inventory, account list, along with information about our files and locations of documents and valuables.
If you, or your senior, are hesitant about talking finances, try sneaking in suggestions during conversations with them.
For instance, your conversation could go something like this:
“Mom, did you hear on the news the other day about so and so? A woman in her 90’s who lived alone had her electricity turned off because the electric company couldn’t read her checks and couldn’t reach her on the phone. Remember yesterday at the grocery store when the clerk couldn’t read your check? If you like, I can make out your checks for you, or if you would prefer, you could fill out this (durable power of attorney) form and we could get that signed, then you wouldn’t have to bother with paying the bills and such. What do you think?”
Be respectful. Give them time, give them choices. It is after all, their money.
Inch your way in to learn about their finances.
If your parents are reluctant to talk money, offer to help them – sort the mail, pay the bills, clean out file cabinets, prepare their tax return and etc. This will get you in the door so you can begin to get a feel for where they are in their financial life and where you will need to look if they become incapacitated.
Offer to do unpleasant tasks and suggest they do something enjoyable in its place (like go to lunch with you once a month in place of balancing their check book to the bank statement.
Get their mail.
If you live close enough or visit often enough, bring their mail in (surreptitiously noting what kinds of mail they are getting). If they don’t object, help them sort through it, noting any bills or requests for money and maybe using them to start a conversation.
My 94 year old Mother-in-law lives independently in a senior facility where she gets some services but has her own apartment. She still gets her mail, but doesn’t always bother to go through it. If she does, she sometimes will try to send off money to any charity with a request. She can’t afford to do that anymore.
My sister-in-law visits her several times a week and has the opportunity to scan through the mail to look for bills or checks that may have come.
Search their home.
With permission, if your parent is still competent, look through piles of paper, file cabinets, stacks of magazines, safety deposit boxes, cabinets, drawers, closets and more to make a list of bills, income, assets, liabilities.
If your parent is no longer capable, do make a search to find the information you need to help your parent with their finances.
Talk to siblings to see what they remember about finances/institutions used.
Over the years, parents may have mentioned in casual conversations, the institutions they used for their financial affairs. Many times, these may still be in effect.
Follow up on each lead.
Call any institutions you find reference to – either from statements, check registers or family members. Ask your parent if they still use so and so person or such and such institution. See if the institution will confirm whether or not your parents have an account there.
What to explore about your elder’s finances.
- Life insurance (is there a policy on her life, or could there still be money in a policy on her spouse’s life)
- Cash needs (how much cash does she keep or need to keep around the house)
- Credit cards (which ones does she have and does she use them)
- Accounts (will she share information on bank/safety deposit box, brokerage, mutual fund and etc accounts – where are they, who are the contacts, what is the current value, etc)
- Expenses (what are her typical bills and what categories are they – utility, taxes, clothing, etc)
- Income (What are the income sources, where does each go, are there any that come in the mail, does the monthly income cover the expenses, etc)
- Health/car/liability/renters/home and etc insurance (what insurance does she have and with whom)
Communication is paramount.
If you do have to handle someone else’s finances, make extra efforts to not only keep them informed, but also to document everything you do on their behalf and share it with siblings or other primary interested parties, to keep everything out in the open and above board.
Other areas to investigate.
While you are at it, make sure your elder is informed about the following as well:
- Availability of do not resuscitate orders
- Medical power of attorney (who can speak for them if they can’t speak for themself)
- Living will – including what they do and don’t want done if they can’t speak for themselves.
- Preferences for funeral arrangements (did they prepay, how do they want their remains handled, particular things they want done or not done)
If you are dealing with elder parents or grandparents, what suggestions do you have?