A key prerequisite is open communication - start here. Image: PeopleImages.com - Yuri A/Shutterstock.com
If you’re at the age where you have elderly parents or other elderly relatives, you may have opportunities to help them remain independent. Often this involves stepping in to help them manage their finances.
This can be tricky because many older people don’t like the idea of giving up control of their money, even if they have concluded on their own that they should have help in handling their affairs. Thorough planning needs to be done.
A key prerequisite is open communication – start here. Do your best to start off on sound footing and make sure you’re on the same page and communicating as best you can, which will go a long way to helping every aspect of the process.
Make a list of your parents’ sources of income and other assets that can be used to cover expenses. Get in touch with their accountant, broker, or other advisors. Consolidate accounts if appropriate – here direct deposit can help, automatic bill payments and other ways to limit mistakes and paperwork, including mail.
Ensure that all necessary legal documents are in place, including wills, powers of attorney, and advance directives. This will help manage their affairs according to their wishes and provide clarity during emergencies. This process may reveal things that must be addressed or corrected now, before they become a problem.
Set up a joint checking account for yourself and your parents. Request that copies of the statements be sent you. If necessary, obtain a power of attorney.
Use a joint debit card, tied to that account, to pay for your parents’ groceries, medicine, clothes, etc.
Verify credentials of anyone who assists your parents with their finances.
Monitor account statements to guard against embezzlement.
You may not be able to keep your parents from going into assisted living but these tactics will increase their chances of living independently:
Put money aside. Seniors who can dress and bathe themselves may need to hire someone to help with cooking, using the telephone, paying bills, managing medications, etc. If saving is difficult, a reverse mortgage can provide the needed cash.
Don’t rush into assisted living. Moving to an assisted living facility is usually a temporary tactic. The average length of stay is two years, after which residents often go into a nursing home.
Be careful at home. An “elder-friendly” home (second railings on the stairs, grab bars by the tub, etc.) will enable seniors to stay there longer, rather than go into an institution. While providing assistance, it is important to respect the autonomy and independence of elderly relatives. Put yourself in their shoes and involve them in decision-making to the extent they are able and willing.
Designate an advocate. Frail elders need someone to provide support in dealing with home care workers, government agencies, etc. This should be a loved one who lives nearby.
By carefully considering these and other factors, you can help support your parents in later years or elderly relatives in managing finances and estate planning.
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