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Managing and Protecting My Elderly Parents’ Finances

Managing and Protecting My Elderly Parents’ Finances

The phone rings. “I need you to take me to the emergency room,” my dad says calmly. “My bloodwork shows some abnormalities, and my doctor wants me to go to the hospital.”

It’s eight o’clock on Monday morning. I search for my shoes, provide the contractors modifying our new home with instructions, and race out the door. Two days later, we receive the grim news. My dad has cancer

The whole family is in a state of panic, but my mom is much more anxious than the rest of us. It turns out, in addition to worrying about my dad’s health, she’s nervous because she’s never paid the bills. 

How to Talk to Your Parents About Money

With all that is going on, money should be the least of my parent’s worries. Thankfully, I started talking to my parents about money years ago. I know how much they owe, earn, and spend each month. I also know how to help them access money to pay their bills.

If you’ve never talked to your parents about money, I urge you to do so now. Why? Because if you wait, it might be too late. What if an unexpected injury or accident left your parents unable to communicate? What if they begin to experience dementia and can no longer relay their financial details?

Don’t wait until for a medical crisis to start a conversation. You don’t want to deal with financial matters in the middle of a health crisis. You want to focus on doctor’s appointments, medical treatments, and relieving pain.

If you aren’t sure how to start the conversation, tell your parents your goal is not to manage their money but rather to put a plan in place should the need arise.

How can you begin talking to your parents about money? Start by asking your parents to document their financial information. Tell them they don’t have to share this information with you right away. For the time being, they can write it down and let you know where they’ve placed it. 

What should your parents collect and record?

Aging Parents Financial Checklist

To begin, ask them to gather the following documents and store them in a secure spot so you can access them when the need arises.

Personal Information:

  • social security cards
  • birth certificates
  • marriage certificates

Property Details

  • deeds
  • cemetery plots
  • vehicle titles

Taxes

  • tax returns
  • 1099s

Insurance

  • homeowner’s insurance policy
  • automobile policy
  • umbrella policy
  • life insurance policy
  • long term care insurance policy

Other

  • safe deposit box location
  • CPA name and phone number
  • financial advisor name and phone number
  • pension details

If your parents don’t use online banking, ask them to gather the following statements:

Banking

  • savings account
  • checking account
  • investment accounts
  • retirement accounts

Loans

  • personal loans
  • automobile loans
  • home loans

Credit Cards

  • business cards
  • personal cards

Then gather the following bills:

Utilities

  • gas bills
  • electric bills
  • cable bills
  • TV bills
  • water bills

Next, ask your parents to write down their credit card information. Include the name of the bank and all associated account numbers.

If they bank online, have them write down the websites they use along with their usernames, passwords, and additional security questions and answers.

If your parents use a safe deposit box, make sure they add you as a deputy or agent, but be aware that you will automatically lose this privilege if they die.

The only way to retain access is to become a joint owner of the box. To do that, you’ll need to go to the bank in person and sign a card alongside your parents.

Lastly, ask your parents to jot down any income they receive, as well as the bank accounts that money flows into.

How to Help Aging Parents Financially

Talk through the importance of simplifying the bill payment process with your parents. Your goal isn’t to take away their control. It’s to lighten the load so they don’t miss any payments or get hit with late fees.

If your parents don’t take advantage of automated payments, encourage them to sign up now. Using online banking and bill payments will allow you to seamlessly transition financial management from parents to adult children.

If your parents aren’t technically savvy or are simply afraid of online billing, show them how it works. Log in to your parents’ accounts while they sit beside you. Show them how you can enter their credit card information to auto-pay bills.

Make sure they understand that these bills no longer need to be paid when the bill arrives in the mail. It may help to stop paper statements to avoid any confusion. Many older adults like to look through paper bills, so don’t move to paperless reports without explicit permission.

When your parents receive bills, ask them to set them aside for you to review. While utility bills arrive every month, insurance policies typically renew once a year. By looking through the mail, you’ll ensure you don’t miss vital deadlines or due dates for forgotten bills.

Make sure to communicate all of the banking and billing changes you make. Create a master list of accounts, including the biller’s name, auto-payment status, and whether invoices will be paperless.

When to Step In and Take Over an Older Parent’s Finances

After hearing my dad’s diagnosis, my mom, dad, and brother agreed that I should help my parents manage their finances. My mom is relieved that I’m watching over their accounts and ensuring their bills get paid. Honestly, even my dad seems happy that banking chores are no longer on his to-do list.

Unfortunately, not all older parents will happily hand over their checkbook or banking credentials. If your parents are hesitant, continue to bring up the topic casually and ask if there are small ways you can help.

For example, can you help file their taxes or ensure their property taxes get paid twice a year? Can you help pay their utility bills or become a second set of eyes on their accounts to ensure fraudulent activities don’t occur?

While you wait for them to let you assist, keep tabs on their mail if you can. If you see overdue bills or find them repeating the same stories over and over, it may be time to have a slightly more aggressive heart-to-heart talk.

Siblings Fighting Over Elderly Parents

Sometimes sibling rivalries boil up when taking care of elderly parents. A lifetime of financial favoritism can breed all sorts of resentment, so if you have siblings, keep them in the loop about the changes you are making. 

By documenting everything, it’ll be clear that you aren’t hiding anything from anyone. Keep on top of these documents and freely share them with your siblings even if they don’t ask to see them.

If you pay any of your parents’ bills, make sure to document those details too. Present this information in a timely fashion or offer to review it regularly.

Unfortunately, siblings can take advantage of elderly parents. If you aren’t managing your parents’ money, ask to see your parents’ bank statements to ensure their finances are on track and their bills paid on time.

Managing Your Parents Money

After my dad’s diagnosis, I put the plans to manage my parents’ money into motion. With their permission, I gathered a voided check, credit card, and most recent bills.

Then I logged on to my dad’s accounts and began setting up bill pay for each of them. To complete this step, I asked my dad if I could access his email. 

With his email in hand, I could reset passwords that he’d long forgotten. I updated all of the passwords and placed them in a giant spreadsheet along with other details.

Then for each account, I added a row including:

  • Company Name
  • Account Number
  • AutoPay (Y or N)
  • AutoPay Type (Credit Card or Check)
  • Username
  • Password
  • Paperless Bills (Y or N)
  • Website

I gave the list to my dad so he can view his accounts. Ultimately, I would like to create a separate email that can forward to his email and mine, but this will work for now without being too confusing.

Within a day, I configured 90% of my parents’ accounts. The exceptions are a few insurance bills that require me to fax paper auto-pay forms to them.

Legally Taking Over Elderly Parents Finances

Technically you can make changes to your parents’ accounts with their permission, but legally your parents need to establish a financial power of attorney.

Ask your parents to create this document well before they become ill. If you wait and your parents develop dementia or any other condition that lessens their ability to make decisions, they will be unable to execute a power of attorney.

When this happens, you must go through a long process of petitioning the courts for legal guardianship or conservatorship.  

Petitioning the courts is a time-consuming and expensive process. Avoid the unnecessary hurdles by talking to your parents about money now!

At the same time, your parents should establish a medical power of attorney who can help guide medical decisions for them. If they don’t have a trust it may be time to form one too.

Supporting Elderly Parents

If you are taking over your parents’ bills, now may be the time to review their expenses. Are they being charged for services they no longer use? Can they receive discounts that might minimize their bills?

If they have the time and desire, step through their credit card statements line-by-line with them. You may be able to cancel some services and upgrade others. For example, if they are now homebound, upgrading their television package or paying for premium sports channels might make sense.

If you are concerned about fraudulent activity, you can also freeze your parent’s credit reports. If the need arises, you can easily unfreeze them.

Taking Care of Aging Parents

After managing my parents’ finances, I turned to more essential matters, including my dad’s medical appointments and other related health care.

I gathered my dad’s medical records, gained access to his medical portal at the hospital, and download every report I found. Blood work, test results, medications, and doctor’s notes begin to fill a folder on my desktop.

I called radiology and received permission to pick up my dad’s CT scan images. Then, I constructed a high-level document including his biopsy results, CT scan details, and other vital information to hand over to new doctors he’ll need to see.

Thanks to Twitter and a few Google searches, I built a list of questions to ask the oncologist. Then attempted to line up appointments for second opinions with doctors at highly-ranked hospitals.

Money management is the easy part of taking care of my aging parents. I’m grateful that my parents trust me to help them during this time. I feel better knowing I can protect their financial assets and ensure their bills get paid.

Now if I could only find a way to easily cure my dad…

The Elderly Parent

Tuesday 28th of September 2021

Although I am the “elderly parent,” I found this to be interesting and useful. It is a good checklist for me to make sure I’ve done everything I can to make the transfer of my assets as easy as possible. I was fortunate in that my father had done transfer on death deeds and had payable on death orders for his banking accounts. I recently met with a financial advisor who recommended that I change my IRA and Roth beneficiaries from names and percentage for each to “my descendants per stirpes.” So even though I consider myself fairly financially savvy, professional advice can be extremely helpful.

Good article.

One Frugal Girl

Tuesday 28th of September 2021

Thank you so much for leaving this comment. I'm happy to know that you found it helpful. I appreciate the detail you included about beneficiaries. I also agree that professional advice can be helpful. We contacted a lawyer to ensure my parents' wishes are executed properly.

Fawcett’s Favorites 9-27-21 – Financial Success MD

Monday 27th of September 2021

[…] financial information. One Frugal Girl helps us get our act together to help our aging parents with Managing and Protecting My Elderly Parents’ Finances. You may not need this information now but you will someday, so I encourage you to save this […]

Liz

Saturday 25th of September 2021

I had a friend need to go through the guardianship process. It required multiple trips out of state, which wasn't a vacation for him but used his PTO, because courts, lawyers and banks are open M-F. (some banks have Saturday hours but it was a lot of going between them.) Another friend has had to take care of her parents bills temporarily. I suggested maybe something like Personal Capital would give her a view without actually paying bills, if oversight was needed. Things can get complicated and if there are added emotions and worries for the reason to manage your parents money, having had these discussions in advance can be very helpful.

Wishing you, your dad and your family all the best.

One Frugal Girl

Monday 27th of September 2021

Thank you for your kind words. Using a tool like Personal Capital may work to see your parents' finances before managing them. My dad keeps track of his money, but it's located in ten different banks, a leftover from the savings and loan crisis. I'm working to consolidate his cash, CDs, and stock into as few accounts and credit cards as possible to make things easier. The best thing I ever did was bring up money with them before either got sick. Starting early conversations helped smooth the transition.

Patient cash

Friday 24th of September 2021

I am sorry to hear about your dad's diagnosis. Prayers for a full recovery.

I really liked you summary and check list and wish I had it in 2019. I did all of the items on your list for my parents when dad became ill. And with dad's passing in 2020, there was more to do, but the foundation was built and it was straight forward.

Now we are going through the same thing with the the in-laws. And it gets more difficult. Probate in Calif is EXPENSIVE, so many people use a revocable living trust to hold their assets. A POA cannot be used to manage a trust - you need to be added as a trustee. And seniors don't like losing or giving up control / ownership of their life's work.

One Frugal Girl

Monday 27th of September 2021

Thank you for your kind words and I'm sorry that you've experienced this yourself. Giving up control and ownership is often the most difficult part of the process. Luckily, my dad and I talked about it so often that he didn't push back. I think he's worried about making things easier for my mom and knows putting me in charge is the best way to make that happen. I wish you luck with your in-laws. Thank you for the reminder about being added as a trustee. The legalities of money management often need guidance from a lawyer.

Dividend Power

Friday 24th of September 2021

Sorry to hear about your Dad. We are going through a similar thing with my father and this is very helpful. The challenges of taking care of aging parens in poor health are enormous. I think most people say I wish we planned better.

One Frugal Girl

Monday 27th of September 2021

Thank you. I'm glad you found this article helpful. Luckily, my dad managed his money well and kept solid track of his finances, but I'm so glad that we talked about money management well in advance of his diagnosis. I wish you the best of luck with your dad.