Managing a loved one’s finances

By Carina Boucher | Citizens Staff

Your parents took care of you your whole life — they helped you with homework, bandaged your scraped knees and helped you through the tough times. Now, they might be the ones who need to be taken care of. One of the tasks they may need help with is managing money, but where do you even start? This topic can be difficult (and emotional), but we’re here to help you through it.

How to know if your loved one needs help

As the child of your aging parent, it’s never easy to see them going through a hard time, or for them to feel like they’re not in control of their life. Whether it’s a medical condition or they’re just becoming a little more forgetful, it’s important to understand that this can be a difficult conversation to have with them.

A few warning signs to look for that your loved one might need help with their finances:

• They have unpaid bills or collection notices
• They’re having trouble with simple math or writing checks
• They’ve become disorganized

These signs can be easy to miss, so it’s important to take these signs seriously and not write them off. When these start to become a habit, it’s time to consider having a conversation with them.

Take inventory

The earlier you can start this conversation, the better. That way, you can take inventory of important documents your loved one may have, or even gain access to their account if you’ll need it. If you’re worried about how your parent might react, you can start small — simply ask them who will handle their affairs if problems come up. Not even just with money, but other personal matters like health proxies, financial advisors, and Medicare representatives. That way, they know it’s about their whole well-being as opposed to just finances.

If your parent doesn’t feel comfortable with you taking full control of their finances, start small and make gradual changes. You can help them write checks or assist with balancing their checkbook. It will make them feel like they still have control but gives you both time to get used to the new arrangements.

A few important things to consider:

• Locate important documents — this could be account numbers, insurance policies, a will, or deeds. Once you find these, it’s important to make sure that everything is up to date, the accounts are in good standing, and none of the accounts are dormant.
• Obtain access to bank accounts or consider a joint account — this way if you ever need to help them and get information from their account, you’ll be authorized to do so.
• Set up direct deposit or automatic bill payments — if your loved one is comfortable, you can set up direct deposit of any payments they receive so they don’t have to worry about losing the check or making it to the bank to deposit it. With automatic bill payments, it’s one less check they need to worry about writing.

Communication is key, so keeping your loved one updated with everything you’re doing will help put them at ease and let them know that they’re still involved.

Related: How to Protect Your Account

Become a fiduciary

A fiduciary acts on behalf of someone else, putting that person’s interests ahead of their own. When you’re a fiduciary, you’re bound legally and ethically to do what is best for the person you’re overseeing. There are a few options you can look into when it comes to being a fiduciary for your loved one:

• Power of Attorney — a written authorization to represent or act on someone’s behalf in private affairs, business, or some other legal matter.
• Guardianship — also called conservatorship, is a legal process you can utilize when your loved one can no longer make or communicate their decisions.
• Living Trust — a legal document where you (the trustee) are given responsibility for managing your loved one’s assets for the benefit of the eventual beneficiary.

Avoiding Fraud

Even if your loved one isn’t quite ready for you to take over their finances completely, one thing you can do is keep an eye out for fraud. Possible signs of financial elder abuse and fraud are:

• Checks or bank statements that get sent to someone else
• Forged legal documents
• Large withdrawals or transfers (that often can’t be explained)
• Missing belongings
• Changes to a will or other financial documents
• Appearance of a previously uninvolved family member claiming the right to your loved one’s property

Not only is this a financial loss for them, but it’s also a psychological hurt and can make them feel even more vulnerable. AARP recommends some key steps to help protect from elder abuse and fraud:

• Start the conversation before the fraud even occurs — if it already has occurred, never blame your loved one. It’s never the victim’s fault.
• Safeguard your assets — make sure your loved one knows to never send funds to a stranger. Whether that’s gift cards, cash, wire transfers, or bank statements — no matter how convincing the story may sound.
• Stay safe online — teach your loved one to use unique and complex passwords for each account and that their antivirus software is up to date.
• Stay safe on the phone — it can be helpful for you to prepare a “refusal script” and post it somewhere so it’s ready to go in case a shady person calls. You could make it say “no thanks,” “do not call again,” or “I don’t send money or disclose information over the phone.”
• Monitor credit card and financial statements — if your loved one is comfortable, you could also ask their card issuer for alerts whenever their card is used or when the card hits a specific dollar amount.
• Stay safe on social media — make sure your loved one is only accepting friend requests from people they actually know.
• Report the crime — if your loved one has been the victim of a crime, make sure to report it to law enforcement. Not only can you help them, but hopefully you’ll stop it from happening to someone else.

Related: Stay Safe Online

Ready to support you and your loved one

Navigating this new chapter of your life can be difficult, but we’re here to help you every step of the way. If you have a new role managing a loved one’s finances and need help with where to start, you can schedule an appointment with your local banker.