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How to Talk to Your Elderly Parents About Managing Their Finances

Key Takeaways

  • Showing patience and thoughtfulness could help your parents engage in a more productive conversation.
  • Find out all account numbers, as well as any debts and the contact information of their financial professional.
  • Ask for all bills so in the event of an emergency, you can step in and fulfill any financial obligations.

Broaching the subject of your parents needing assistance as they age is never easy. Add their finances to the picture and it brings an extra layer of sensitivity.

However, it’s a question that needs to be asked: As your parents’ physical or mental health deteriorates, do they want or need you to step in to help manage their finances?

Having these conversations early before their health starts to slip is critical. Sure, it’s not a fun subject to discuss and could get emotional, but having a plan ahead of time that all parties are comfortable with is better than realizing you waited too long. Formulating a plan will give you peace of mind that if health becomes an issue, you’ll be managing their finances in the way they intended, and avoid potential implications to your own finances.

Here are three considerations when having these discussions.

1. Make them feel comfortable

Your parents are accustomed to taking care of you and being of sound mind and body. To discuss a scenario where they are incapable of making their own decisions could be a sensitive subject. By showing patience and thoughtfulness, you can help your parents open up and engage in a productive and purposeful dialogue that accomplishes your main goal: fulfilling your parents’ wishes.

2. Ask for information regarding all accounts

Start the conversation by understanding the entire spectrum of their financial situation. Find out all of the account numbers for their checking, savings, investments, debts, mortgages, and any other financial instruments, such as life insurance policies.

Ask them to consider giving you a durable power of attorney with regards to their financial affairs. This way if their health affects their financial decision making, you are authorized to access the accounts. You’ll also want to ask if they have a living will or health care proxy to help make any healthcare decisions if they’re unable to make those decisions themselves.

Not only is it important for your parents to have these documents — you need to be able to access them, too, so find out the location of these documents. While you’re on the topic, ask your parents to clarify any items on the documents that you’re unsure of to eliminate any potential points of confusion.

Do they have a financial professional? Ask for his or her contact information and consider scheduling a meeting so all parties can develop an agreed-upon plan.

Do they have any outstanding debts? This can be difficult for your parents to admit and it might even be surprising to you, so make sure you approach this conversation with the appropriate sensitivity and understanding so they feel comfortable sharing all of this information.

Furthermore, don’t forget to ask for any usernames, passwords, or answers to security questions for accounts managed online.

3. Gather all of their bills

Just as important as having their account information is knowing where your parents’ money is going every month. Ask for a list of all bills. That way if their health is compromised, you can step in right away and make sure all of their financial obligations continue to be fulfilled. This is why it’s important to have a durable power of attorney with regards to their financial affairs. Rather than paying your parents’ bills from your own accounts and worrying about reimbursement later, you can pay the bills straight from their accounts and eliminate any potential confusion or conflict.

Note: If you are forced to step in and pay any bills, make sure you keep detailed documentation of all payments.

The bottom line

Discussing the possibility of your parents’ health deteriorating is never easy. However, it’s a wise conversation to have in order to ensure you’re handling your parents’ finances in a way that makes them comfortable. That way you avoid any complications in the future, minimize stress such as disagreements amongst family members, and avoid having to resort to legal action. Taking the time to lay out a plan will give all parties the peace of mind that you’re ready for whatever the future holds.

More information

We are committed to helping you reach your potential by providing personalized solutions. Our dedicated colleagues can help you find the right product to help you reach your goals. To learn more, please call 1-877-360-2472, visit us online, or visit your nearest Citizens Bank branch.

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