What Happens When You Have To Manage Your Parents Finances

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In the back of your head, you knew the role reversal would eventually happen: you’re now carrying for your aging parents. But the inevitable happened sooner than expected, and you’re flying by the seat of your pants. Not only are you worried about doctors’ visits and wrangling with the issue if one or both parents need a nursing home, you’re worried about handling Mom and Dad’s finances.

Managing someone else’s finances is nothing like managing your own, because you don’t have the complete picture to do the job. You’re not prepared for it; it’s something you don’t want to do but have to do. That’s part of being a family, right? It can be difficult and awkward to navigate that transition…if they’re relatively healthy. Getting just the basic information from someone who’s incapacitated or suffering from dementia is next to impossible.

The need to take over your parents’ financial affairs, especially if it happens unexpectedly, can be extremely stressful on many levels. However, if you approach it one step at a time, you won’t become overwhelmed and get what needs to be done.

The best place to start is with an honest conversation. Parents are usually reluctant to share financial information with their children, let alone relinquish control. A good lead-in to this tough conversation may be to say you’ve read an article that discussed the importance of getting financial information in one easy-to-find location in case someone needs to get to it, or that you’ve met with an attorney to draw up a Power of Attorney (POA) or a living trust so your spouse can handle matters if you become incapacitated. Then ask Mom and Dad about if they have done any of this and, if not, are they interested in doing so.

Now that the door is open just a little bit, and if your parents/grandparents are receptive, find out where they keep their important documents, such as their POA, will, trusts (if there are any). Are they in a safety deposit box at the bank, or tucked away in the filing cabinet at home? And while you’re on a roll, (and don’t be surprised if they say no for the time being) ask your parents for a list of their banks, accountants, attorney, and financial planner (if they have one.) If your parents are retired, ask where their income comes from (pension, Social Security, stocks).

Mom and Dad may not be receptive to any of this, and completely shut you down. That’s okay, but here’s a simple goal: At least try to walk away with their medical history, such as the name/s of their physicians, what medications they are taking, if there are drug allergies, and past surgeries. It may not be much but it’s a start! These little details may sound trivial now, but you don’t want to go scrambling to find them if you find yourself in a crisis situation. Delays can be costly.

As you go along, you might learn Mom and Dad or Grandma don’t have a POA. If that’s the case, get one! Now! Without a POA, you’ll be limited as to what you can do on your loved one’s behalf. Banks and financial institutions won’t give you the time of day without a POA, and that’s a major hurdle. In the event Mom develops dementia or Grandma is so ill she can’t handle her finances, and there is no POA, the only alternative is guardianship. This is a situation you don’t want to find yourself in, because you will need to go to court and a judge will determine whether you can handle your loved one’s affairs.
Also, get your name on your parents’ checking account, if it’s not already on it. That way, even if you don’t have POA, you can still pay their bills and monitor their finances.

This part of the conversation may be more difficult. If your parent or loved one isn’t able to care for themselves any longer, different options need to be explored. Is assisted living the right choice, or is a nursing home? Does it make sense to bring in an outside agency to visit twice a week, or more? And where will the money to pay for any of these come from? Again, these are important conversations that need to be discussed.

Let’s be realistic: a person diagnosed with dementia, Alzheimer’s or other illnesses can live for many years. If you find yourself in that situation, you may want to consult financial and estate planners or at least an elder law attorney to discuss long-term plans, such as a nursing home. Applying for Medicaid may become an option; if that is the case, the financial planners and elder law attorney can best advise you how to protect your assets and the application process.

Your loved ones have been in charge for a long time, and for them to give up control is a big issue. To help ease into this new phase, it’s good to ensure other family members know what your parents’ wishes are. You don’t have to call an emergency family meeting to discuss, but the next time you’re all together and the situation is right, have that discussion.

People are known to change their minds. It’s part of human nature. It’s a good idea to review your parents’ plans periodically to be sure they are still satisfied with their decisions and make necessary changes.

There’s no right way to take control of your parents’ finances, but waiting too long and doing nothing simple increases the chances that the people you love might fall into a financial tailspin they can’t recover from. Be proactive. Be patient. Mostly, just be involved. It makes an enormous difference.

In no way does this article presume solid legal advice. It is to serve as a consumer guide in the complicated world of long-term care and financial strategies. It is best to consult an elder law attorney who can properly advise and draw up the necessary legal documents.