Aging and finances

When our parents health and cognitive abilities begin to wind down, many adult children find themselves stepping into the role of financial caregivers for their parents. 

Do Mom and Dad Need Help?

We all forget where we put our keys or walk into a room only to ask ourselves, what did I come in here to do?  If you think you see signs of decline in your parents, ask if they need help. Some may push back and say they are fine and others may welcome your input or observations.  My own parents approached me when I was only 25 to let me know they needed help.  They were in their early 60’s.  It was my mom who broached the subject.  She had always taken care of their personal and business finances, but at this point she told me the numbers were getting all jumbled in her head and she could no longer balance the checking account.    

Financial Conversations – Talk with them not at them

Finances are a very personal matter.  Your financial analysis should take a back seat to their personal thoughts and concerns.  Don’t simply focus on addressing their money issues, remember, they are your parents….talk with them not at them.  Check in to see what’s going on in their life.  They may have gotten new neighbors, a prescription change, or heard from another family member. Listen to what they have to say.  They are sharing with you and indirectly you may be learning something which pertains to their finances.   

Once the small talk begins to wind down, you can then address their finances.  If there have been no big changes, great, you can address that their monthly budget is on track or let them know if their overall net wealth is about the same. If they have had significant financial changes, this will warrant a more in depth conversation.  

Don’t make the mistake of talking over your parents.  I remember walking into the bank with my mom so we could have me listed as Durable Power of Attorney on my parents  checking account.  My mom got frustrated with the teller who tried talking to me and was not addressing my mom.  Finally she snapped, I’m a person not a number, please address me directly!  I realized I had not done my job correctly.  I had bulldozed in and tried to make everything and everyone operate efficiently.  I had gone over my mom’s head. 

Are they up to financial conversations?

Many seniors take a lot of prescriptions to maintain or improve their health.   New prescription may lead to a change in their energy or attention level.  Listen and be aware of how they are feeling prior to bombarding them with facts and figures. 

Keep discussions simple

When speaking with parents about their finances, it is important to determine if you should keep shared content simple and relevant or if you need to go deep with analysis.  You’ve know your parents your whole life, ask yourself or ask them directly, do they want a deep dive or are they just looking for an update and re-assurance that their bills are being covered each month?   They may simply want to know, “is my money ok and at this time is there anything special we need to address”?  Take your cue from them.  If they do request details, don’t hide information from them or talk down to them, as that could be considered financial abuse a form of elder abuse.   Leslie Kernisan, MD MPH says, “financial exploitation can happen to almost any older adult, but being lonely, isolated, and/or dependent on others makes an older person especially vulnerable” (Kernisan et al., 2020).

With the restrictions of the pandemic, how else can adult children keep open the lines of communicate with their parents?

If you are in face to face contact with your parents this will undoubtably be the best scenario, but the pandemic has thrust many of us (old and young alike) into a new way of communication, through the virtual world.  Zoom, Google meetings, and the myriad of other virtual communication platforms have provided an awesome opportunity for connecting over our computers.  Give your parents credit as many aging parents are embracing technology and Zooming with friends and family who are scattered across the map.  if your parents have not yet learned the ins and outs of Zoom, this is a great chance for you to teach them.  They will appreciate your time and expertise. 

Estate and Legacy Planning

Estate and Legacy planning will have significant impact in your role as financial caregiver.  You must have certain documents in place if you will be taking over some of your parents day to day financial obligations.  

A Durable Power of Attorney for Finance 

Durable Power of Attorney (POA) for Finance which names you as having POA authority, is required so you can legally open your parents mail, write or deposit checks in their personal bank accounts, or access information in their investment accounts. 

Revocable Trust

A properly funded Revocable Trust will provide security against probate court proceedings at the passing of your parents.  A revocable trust is used to document how your parents wish assets to transfer.  It is stipulated on their terms, without the expense, time, and intervention of the probate court.  

Housing and Healthcare

At a certain point your aging parents may want or need new housing.    Some feel better when they can downsize living accommodations, but others struggle with the thought they may be giving up their independence.  Sherrie Renae, Director Of Sales Marketing at Estancia Senior Living encourages seniors to visit Estancia prior to needing care or assistance (Renae, Estancia Senior Living ). 

What should you and your parents look for in accommodations

While checking out senior communities, make sure they embrace the lifestyle and passion of your parents while also providing care and support for any needs they may have down the road (Renae, Estancia Senior Living). 

Conclusion

Determining if help is needed and wanted or will it even be accepted is a first step in establishing your role as a financial caregiver.  Talk with your parents not at them.  They have a right to be heard and it can be easy to steam roll over them in an effort to get their financial lives on track.  Estate and legacy planning along with housing and care should be carefully addressed to ensure you are helping to fulfill their needs based on their comfort, safety, and lifestyle.

About the Author

Author, Marianne Martini Nolte, Certified Financial Planner ™ practitioner, provides fee-only, fiduciary, independent financial services.  Her firm, IMAGINE FINANCIAL SERVICES (IFS) is a registered investment advisor offering advisory services in the State of California and in other jurisdictions where exempted.  Marianne’s focus is serving women and generations X, Y, and Z.  This article is intended as a high level view.  

All written content is for information purposes only. Opinions expressed herein are solely those of IFS, unless otherwise specifically cited.  Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. 

For more in depth information, please reach out:

Marianne Martini Nolte, CFP®

Imagine Financial Services 

Website, www.imaginefinancialservices.com  

Email, mnolte@imaginefinancialservices.com

Phone, (760) 472-5155

Reference

Kernisan, L., Says, A., Says, N., Says, N., Says, T., Didyk, N., . . . Says, S. (2020, December 22). Financial Exploitation in Aging: What to Know & What to Do. Retrieved December 22, 2020, from https://betterhealthwhileaging.net/financial-abuse-what-to-know/

Renae, S. (2021, February 9). Estancia Senior Living [Telephone interview].