As your parents age, they may need more help managing their finances. This is a sensitive and complex topic, so it’s important to approach it carefully and with respect. LendingTree shares six tips to help you lay the groundwork and ease into the transition.
As your parents age, you may need to help out a bit – or a lot – more.
What can begin as managing basic chores, like mowing the lawn or taking out the garbage, can turn to more sensitive subjects, like making sure bills get paid on time.
Financial topics can be hard to bring up, especially with a parent who may see it as a criticism of their cognitive ability or well-being.
It’s important to make it clear this isn’t an attempt to take over their affairs. Your goal is to keep their financial lives running smoothly and help ensure their wishes are honored if they are no longer able to.
Here are 6 tips to help you lay the groundwork and ease into helping aging parents with finances.
1. Start with less sensitive topics
To ease your parents into sharing their personal information, consider starting with less sensitive topics.
For example, ask where dad keeps his marriage certificate or where mom stores her military records.
You could also start by asking about their end-of-life wishes rather than asking about specific documents.
For instance, you could ask which health decisions or treatment options are they open to and which ones they would not want to undergo?
2. Make gradual changes
Rather than taking over all at once, ease everyone into the transition – especially yourself.
For example, you might start by paying bills together before taking over the role.
This slower approach can give everyone time to adjust while also giving you insight into any hidden issues, such as unmanaged debt that may need to be consolidated.
3. Simplify financial tasks
As your parents become more comfortable with your help, you might look for ways to simplify or automate their financial lives.
For example, could you get monthly income automatically via direct deposit instead of through a paper check. Or, could you put recurring bills on autopay?
Setting up automatic processes for income and expenses will ease the mental burden by ensuring that everything is received and paid on time.
4. Consider power of attorney
If a parent is in agreement, having them name you as a durable power of attorney for finances and healthcare may be a good idea.
Having these legal documents in place will allow you to make legal, financial, and medical decisions on their behalf if they cannot do so themselves.
5. Know when to step in
In an ideal world, your parents would be able to gradually hand over management of their finances to you when they choose or, even better, retain control until they pass away.
But life doesn’t always go as we hope. It’s important for you to know the signs of when it’s necessary for you to take charge.
For example, changes in their spending behavior can quickly spiral out of control. Similarly, cognitive or physical impairments can make it difficult for them to manage their own affairs.
If your parents start consistently having trouble remembering the date, seeing, writing, or driving, it may be time for you to step in.
6. Communicate openly
A top priority is ensuring that your parents feel included and respected as you all navigate this transition.
Remember this isn’t a takeover – it’s a changing of the guard. The goal is to make the transition as smooth and comfortable as possible for everyone.
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Guest contributor: Joseph Muscente is a content analyst at LendingTree where he works to help people make informed financial decisions. He earned his B.A. from Penn State University.
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