Finances can be confusing. I’m in my early 40s, and I don’t understand them. I pay my bills, and that’s about it! When it comes to insurance, budgeting, or retirement savings, my eyes glaze over. If my mom got to the point where she needed help managing her finances, I would be worthless.
What would happen if you had to take over management of your parent’s finances suddenly? If your mom or dad became hospitalized or unable to pay their bills, would you be prepared to help? This situation happens more often than you think!
It can be really difficult for adult children to watch their parents decline. My dad was always the physically strong one, so when a heart attack struck him, it was extremely shocking. My mother has always been responsible and mentally fit. If she were to deteriorate due to illness or medications, I don’t think it would be easy for her to admit she needs help.
So, as the adult children of our aging parents, what do we do? The National Council on Aging suggests planning for your parent’s financial well-being should begin with a family meeting, ideally in your parent’s early 60s. (Oops, I missed that by about ten years!) The next step would be to discuss appointing a financial power of attorney (POA). If your parent loses competency without a POA, you must petition guardianship to access their accounts and pay their bills. Yikes.
Gently find out where your parents keep their financial records and if they receive benefits or are eligible for any government assistance. Keep in mind that these are personal matters that could be awkward. Remember that your goal is to help them maintain their financial security and not be bound should something happen. You don’t want to have to investigate finances and benefits when things are critical.
Knowing what your parents’ monthly expenses are is helpful, too. If your mom or dad has recurring bills automatically taken out of their checking account, this can help you manage these expenses if needed.
Consider encouraging your loved one to use a trustworthy professional to help with taxes and investments. Maybe do the research for them and recommend someone that you think they’d like. Take an interest in supporting them and make yourself available to help. This could be a chance to improve your financial wellness, too!
Ask if your loved ones have long-term insurance. This is important because a basic health insurance plan typically does not cover the cost of senior living facilities. LTCi policies will usually cover in-home care and nursing homes. It’s important to be aware of any type of LTCi when choosing the care that best suits your parents’ needs.
Don’t forget that this is their money, not yours. Make it clear that you want to protect their wishes and you’re only trying to gain an understanding of what those wishes are. Finally, please send some good wishes my way as I prepare to discuss financial matters with my mother, a topic she might deem none of my concern!