Many adult children serve as financial helpers to their elderly or ill parents. They provide services like paying bills, handling deposits and investments, filing insurance claims, preparing taxes and more. Here are some tips and resources that can help you.
Start with a Conversation
Taking on the task of helping an elderly parent with their finances can be a sensitive and difficult topic. The first step in helping your parent is to have a respectful talk with them expressing your concerns and offering to help them with their financial chores. If you have siblings, it can be a good idea to get them involved too. This can help you head off any possible hard feelings, plus, with others involved, your parent will know everyone is concerned.
If your parent is willing to let you help manage, monitor or take over their financial affairs your first order of business is to get organized by making a list of their financial accounts and other important information. Your list should include:
- Contact list: Names and numbers of key contacts like insurance agents, financial advisor, tax preparer, family attorney, etc.
- Monthly bills: Phone, cable, water and trash, gas, electric, credit card accounts, etc.
- Financial accounts: Including bank accounts, brokerage and mutual fund accounts, safe-deposit boxes and any other financial assets he has. Also get usernames and passwords for financial accounts that are set up online.
- Company benefits: Any retirement plans, pensions or health benefits from their current or former employer.
- Insurance policies: Life, home, auto, long-term care, Medicare, etc.
- Taxes: Copies of your parent’s income tax returns over the past few years.
Locate Important Documents
This is also the ideal time to find out if your parent has the following essential legal documents: A will; an advance directive that includes a living will and health-care proxy, which allows you or another family member or friend to make medical decisions on their behalf if they become incapacitated; and a durable power of attorney, which gives you or a designated person similar legal authority for financial decisions, if needed.
If they do not have these important documents prepared, now is the time to do it. And if they are prepared, make sure they are updated, and you know where they are located.
Simplify Financial Tasks
The quickest way to help your parent simplify their monthly financial chores is to set up automatic payments for their utilities and other routine bills and arrange for direct deposit of their income sources.
If your parent has savings and investments scattered in many different accounts, you should consider consolidating them. You can also set up your parent’s bank system and investment accounts online, so you can pay bills and monitor their accounts anytime.
Set Up Protections
To guard against scams and risky financial behaviors, consider getting your parent a True Link Visa Prepaid Card. Designed for older adults with cognitive issues this card would provide your parent access to their money but with restrictions that you set on how funds can be spent. Or check out EverSafe.com, a web-based service that will automatically monitor your parent’s accounts, track suspicious activity, and alert you when a problem is detected.
If you need help or live far away, consider hiring a daily money manager (see AADMM.com) who can come in once or twice a month to pay bills, make deposits, decipher health insurance statements, and balance his checkbook. Fees for this should range between $60 and $150 per hour.
Jim Miller publishes the Savvy Senior, a nationally syndicated column that offers advice for Boomers and Seniors.