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Family Matters
When Is It Time to Take Over Your Parents’ Finances?
It’s never an easy conversation. Your parents don’t want to feel like they aren’t capable of handling their finances, and you don’t want to overstep. But, it’s critical that you have a plan in place to help your parents in case they become unable to handle their financial responsibilities without support.
If you’re seeing signs that your parents aren’t handling their finances well, get involved right away. Some signs to look for:
- Piles of unopened mail
- Unusual large purchases
- An uptick in package deliveries
- A dramatic increase in “charitable” donations
- Collection activity or services discontinued
- Gambling
Even if you do not see any of these red flags, it’s a good idea to start talking. It’s much easier to plan ahead than to try to dig out of a problem later. After you’ve broached the subject, take one or two of the topics below at a time to make sure you cover everything thoroughly, without being overwhelming.
- Documentation - Get copies of account statements, bills, assets, liabilities, and create a list of logins and passwords for online accounts.
- Legal matters - Talk together with a lawyer about wills, living trusts, and creating a power of attorney or even a guardianship in case it becomes necessary.
- Financial experts - If your parents have investments, meet with their financial planner or tax planner to make sure the money is invested in a way to ensure a lifetime of cash flow.
- Make a plan - Based on their income, or the amount they will be drawing down investments, create a livable spending plan that can cover their expenses. Create joint accounts so you can help keep an eye on the spending and work together to modify it as necessary. If they struggle with bill paying, you can set up auto-pay or take over the payments easily this way.
The fact is you may never need to take over your parents’ finances. Many seniors can stay on top of their spending and bills with no problem. However, you can’t know for sure, so start the conversation before it gets too complicated. The key to handling this successfully, as with so many other things, is communication.
For more information on how to take over your parents’ finances, access the full article here.
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