How to Handle Your Aging Parent’s Finances

Those of us with aging parents or relatives will someday face a delicate and emotional decision: When to step in and help with their money management. It could be as simple as helping them with their health insurance, Social Security, or Veteran’s benefits and paying bills, or as complicated as managing financial accounts or a trust. Welcome to the caregiver generation!

How do you know when to step in?

Are you finding unpaid bills, or second notices on utilities?
Are they donating (with money they can ill afford) to dubious charities?
Are they making excessive purchases from television shopping networks, online, or buying more lottery tickets?
Have they been the victims of a scam?
Are they making duplicate bill payments?
Do they have high credit card debt?
Is their house less than clean?
Have they had a fall or a lengthy illness? Dealing with their own health issues leaves less room for concentrating on financial matters.

As with most things, it’s best to start your preparations in advance.

Some things to check off your list first:

Find out about tax credits and deductions for which you might qualify if you are caring for an aging parent.
See what assistance programs your parent might qualify for, such as transportation services for elders, utility discounts, discounted basic telephone service, and more.
Does your parent have long-term care insurance?
Review and organize your parent’s financial accounts, and make sure you have all their account numbers and passwords/PIN numbers. Also make sure you have the name and number for any financial advisors, tax preparers, and legal help. Be sure to get information on all their credit cards.
Gather their important records and store in a safe place: Their will, birth certificate, marriage and death certificates, divorce paperwork, tax returns, insurance and benefits documents, Social Security cards, mortgage records or property deeds, auto titles, bank cards.
Find out if they have a safety deposit box, or a safe. Know where the key is, or what the combination to the safe is. For a safety deposit box, you will want to arrange to be a co-signer on that account so you can access it.
Write down (or photograph) your parent’s prescriptions and doctor contact information, and any ongoing health conditions.

Now that you know just what your elder’s situation is, you can get started with a plan to move forward:

First of all, be gentle and respectful. Handing over one’s independence is emotional and difficult, at best.
Set up Durable and Health Care Powers of Attorney, giving you the right to make decisions and care for an incapacitated parent, to handle their finances, cash their Social Security checks and sell their house, if necessary. For more information on these legal documents and more, check here.
If your parent does not already have a will, consult with legal help to put that in place.
Set up an income and expense budget. If you feel this is outside your area of expertise, consult with a money manager.
Establish an automatic bill pay system, either with each company or through the bank.
Consider having their mail forwarded to you.
If your parent is not managing their money well, think about loading a prepaid debit card for them each month. That will give them a measure of independence, while still making sure the bills can get paid.
Evaluate whether your parent needs in-home assistance, for anything from simple cleaning to health care.

Get help! You don’t have to figure this out alone. To get you started, here some resources you can check:

There are also national organizations you can reach out to:

The National Association of Professional Geriatric Care Managers, or Care.com to help you find care assistance.
The National Association of Senior Move Managers for when your parent or relative needs to relocate.
The National Association of Elder Law

Last fall the Consumer Financial Protection Bureau released a series of guidebooks: The Managing Someone Else’s Money guides. The guides help you to be a financial caregiver by walking you through your duties as a financial “manager,” how to deal with scams, and where to go for help.

Hawaii has the fastest growing age 65-plus population in the nation, expected to grow by 81 percent by 2030–putting a strain on elder services already in place. The upside is that the aging baby boomer generation rejects traditional ideas of aging. They see retirement as a more active lifestyle, value independence (even in assisted living circumstances), and embrace technologies that keep their minds active and help them to stay socially connected.

Remember that the best time to start this discussion is while your parents or elders are healthy, competent, and self-sufficient. Your parents probably taught you about money management and responsibility—now it’s your turn to return the favor. Just keep them involved in the discussion, and try to make is as low-stress as possible.

Questions? Stop by one of PayDayHawaii’s convenient locations to ask about tax matters and other financial issues.

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