When and how to take control of your parents’ finances

It’s not a thought many of us want to entertain, because it’s hard and it’s an unflinching reminder of the terminal forwardness of life. Your parents will get old and they will need your help.

It’s very important that you step in to assist your parents when the time is right. If you don’t intervene, others will – and they very likely won’t have your parents’ best interests in mind.

Warning signs

Here are some warning signs for when your parents begin losing track of their finances. 

  • Unopened mail begins to pile up in their house–they don’t open their bills
  • They become forgetful about cash
  • They start getting lots of calls from creditors
  • They start getting notices from utilities that power, water, etc. will be turned off because of non-payment of bills
  • Their house is filled with expensive new purchases that they bought from TV home shopping
  • They go to the casino too often
  • They complain often about not having enough money
  • They have difficulty with simple tasks, like bill paying or balancing their checkbook
  • They can’t remember where the check register is

TAKING CONTROL OF YOUR ELDERLY PARENTS’ FINANCES

Taking over control of your parents’ finances is complicated, but the longer you wait to become involved the harder it becomes to sort out all of their accounts and make the necessary legal steps to ensure your ability to successfully manage your parents’ money.

Account for all assets, liabilities, debts and income

This can be a complicated process made all the more complicated if you wait until your parents are no longer able to help you sort out their finances. Use tax returns and credit reports to help piece together a complete picture of your parents’ financial infrastructure.

Evaluate and pay bills

If you waited until some of those warning signs started to pop up before becoming involved in your parents’ finances, this may not be a simple matter of setting up auto-payments. Many of your parents’ bills may be past due or even in collections. Worse, there’s the very real possibility that they’ve become overextended and don’t have the means necessary to pay all their bills.

You’ll need to evaluate all of your parents’ bills and then create a budget and a spending plan. Try to work directly with creditors to address any overdue or charged off accounts. If the debt is well beyond your parents’ ability to address, consider speaking to an attorney to see what your options are

Get Power of Attorney

You’ll find it much easier to get the access you need to put your parents’ finances back together if they’ve granted you Power of Attorney.

Document everything

Handling someone else’s money can be a minefield. Money, unfortunately, has a knack for driving a wedge in even the strongest families.

To head off the possibility of negative feelings or concern, be thorough and document every move you make with your parents’ money. The easier it is for you trace your transactions, the less likely it is that you’ll face hostility or second-guessing.

STAY INVOLVED

There’s no right way to take control of your parents’ finances, but waiting too long and doing nothing simply 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.

 

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