5 Tips for Helping Your Adult Parents Deal with Their Finances

Money can be a difficult subject to discuss with anyone, never mind your elderly parents. Many people were raised with the understanding that money, like religion, is a highly personal subject that is never discussed. However, when it comes to aging parents and their finances, this can be a serious mistake. Adult children should have a clear understanding of their parents’ financial situation. Failure to do this can result in serious problems that can affect every part of yours or your parents’ lives. This is especially important if your parents are having health issues.

There are some simple steps your parents, or you on their behalf, can take in order to enjoy their golden years. Here are five tips for helping your aging parents deal with finances.

1. Key financial documents. If your parents have not already put their important financial documents in order, it becomes crucial that you help them do so. Your parent’s financial planner can serve as a guide to help get any necessary documents drawn up. Necessary documents should include a durable power of attorney, which would allow your parent to appoint a trustworthy person to help manage their finances, a durable power of attorney for health care, also known as a health-care proxy, a living will and a will. The planner can also direct your parent(s) to an attorney, who specializes in such matters if needed.
2. Daily money management. Hiring a daily money manager can make the process of managing your parents’ finances much easier. Daily money management different from long-range financial planning in that it involves consistent help with routine tasks such as paying bills, balancing the checkbook, establishing a budget and organizing financial and insurance records. This is an affordable service, with most daily money managers generally charging $25 to $75 an hour; in fact, many people only require a few hours of help each month. A quick search online will help you find a certified money manager. Once you find one you like, make sure to check references before hiring anyone.
3. The “representative payee” alternative. If your parent receives income from Social Security and is having difficulty managing it, he or she can ask the Social Security Administration to appoint a representative payee. This person is set up to receive the monthly checks and use the money to pay your parent’s living expenses. This individual could be you or your parent’s daily money manager, too. Visit http://www.socialsecurity.gov/payee/ for details.
4. Guardianships. Courts will appoint guardians to decide financial or personal matters for people who are unable to care for themselves. However, it’s important to understand that a guardianship would deprive your parent of the right to make his or her own decisions. Normally guardians are only assigned to people who are no longer able to care for themselves. In addition, setting up a guardianship can be a long and sometimes expensive process.
5. Find necessary resources. When you need additional help or resources, consider using the Eldercare Locator, a nationwide assistance directory provided through the U.S. Administration on Aging. Do a quick search online to use this service or the many others that are available and check with your community or state council on aging, hospitals, senior centers and even churches for available resources for helping your parents as they age.