How to Help Aging Parents With Their Finances
At some point in our parent's lives, most adult children will need to manage their parent's finances. Recognizing this responsibility is necessary is the easiest part of the undertaking, the rest should be handled with empathy, patience and persistence.
Americans are living longer. According to a recent report from the Centers for Disease Control and Prevention (CDC), the life expectancy at birth for people born in 2012 in the U.S is 78.8 years.
As people age, they are confronted with health issues like dementia. Combine dementia with the likelihood that those who live longer tend to have more assets and financial portfolios to manage. If not managed proactively, finances can get out of control.
At some point, children may need to step in to help their aging parents with finances. The most difficult part this process is: How does a child approach a parent about his or her finances?
Let's face it, family conversations about money are never easy. Add to that the idea that, after many years of managing finances on their own, aging parents usually do not want their children to take over. The best approach for children is to start with their siblings. The process is easier if all siblings are on the same page. Once that happens, all siblings should continue to be fully informed regarding their parent's finances.
Which sibling is the closest to their parents (geographically)? Which sibling is the most fiscally responsible? This may be two separate siblings, in which case they can work as a team. If it's the same sibling then great!
The next step is not to approach the parent with a blanket statement like, "It's time for us to step in and help you manage your finances." This can be both intimidating and shocking, causing the parent to take a defensive stance and turn you away. A better choice would be to approach the topic with assurances, "I want to be sure that we are prepared for any upcoming bumps in the road." This sounds more like you want to do ao good job, rather than accusing them of doing a bad job.
Chances are that once parents see that their children only have their best interests at heart, they will understand that a collaborative effort to safeguard their finances is the best way forward.
U.S. News has an insightful article on more ways to navigate the difficult process of helping aging parents with their finances. Good luck, we are here if you need us.
Should a situation arise that you need to take more control over your parent's financial situation, Kevin Miller is ready to assist you in creating a conservatorship or other estate planning for a loved one. It is important that you make your parent's finances a priority if you have a parent that is declining mentally or has been diagnosed with dementia or Alzheimer's. Kevin Miller has extensive experience in special needs planning and will put your interests first. Contact us or call us at 405-443-5100 if you have questions.
We are here to help.