Everything You Need To Know About Transitioning Your Elderly Parents’ Finances

One day, there will come a time when your aging loved one or parent can no longer take care of things they once did. This includes managing their finances. It can be a tough topic, but having a discussion and making a plan early will ensure the success of their financial future. From hints that it’s time for a change, to warning signs of elder financial abuse, to the steps you can take for a smoother transition, here’s a guide to help transition your elderly parents’ finances.

Signs Your Aging Parents Can No Longer Manage Their Finances

From cognitive impairment to medication problems, it doesn’t take much for everyday expenses and unpaid bills to cause financial trouble. Whether your aging parents are displaying signs of impairment or you’re just worried they can’t keep up with their finances, here are a few signs that might signal your loved ones are struggling.

Forgetting to Open Mail

Taking a look around your parents’ home is a good place to start. Do you notice stacks of unopened or unsorted mail? Do those piles include unpaid utility bills, bank statements or other crucial correspondence? If you know your parents aren’t paying their bills online and are typically on top of their finances, this is an indication that something is not right. Learn more 

Changing Their Normal Behavior

Look for changes in your parents’ behavior. If your aging parent is suddenly making outlandish purchases or spending a lot of money on things they wouldn’t typically have bought in the past, it may be time to investigate. Big splurges on things that don’t fit into their lifestyle can be red flags for financial instability. 

How To Help Your Aging Parents Manage Their Finances

If your parents are displaying the warning signs of financial distress, it’s most likely time to take action. While the transition of financial responsibility may be hard for some, with a sensitive approach and some planning, it is possible to help them transition without much turmoil. Here are a few steps to help make the process run smoothly.

Organize their Financial and Legal Documents

It’s important to begin collecting and storing information like account numbers, and to know where their legal documents like birth certificates, insurance policies, deeds and wills are stored. Once you’ve found them, make sure everything is up to date.

If the process feels overwhelming, consider hiring a financial planner or CPA

to sort through the numbers, statements and policies. A professional can help you figure out how much your aging parents will need to sustain their way of life.

Pick a Power Of Attorney

Power of attorney gives you power over your parent’s legal and financial matters if/when they become incapacitated. Executing a power of attorney with your parents ensures you have the legal authority to make important decisions on their behalf. A power of attorney is only effective while a person is alive. Remember, the person granted power of attorney must be willing to put in the time and effort  to ensure all choices are made with the person’s best interest in mind. Learn more

Signs Of Elderly Financial Abuse

Elder financial abuse happens when money or belongings are stolen from an older adult, and the results can have devastating consequences for the victim. Elder financial abuse can include forging checks, taking someone else’s retirement, Social Security benefits, or using a person’s credit cards and bank accounts without their permission. Other scammers might even go as far as changing names on a will, bank account, life insurance policy, or title to a house without the victim giving their consent. Preventing and addressing financial elder abuse is a major concern. Here are some of the warning signs of elder financial abuse.

  • Sudden changes in bank accounts or banking practices, including an unexplained withdrawal of large sums of money by a person accompanying the older adult.
  • The inclusion of additional names on an older adult’s bank signature card.
  • Unauthorized withdrawal of the older adult’s funds using their ATM card.
  • Abrupt changes in a will or other financial documents.
  • Unexplained disappearance of funds or valuable possessions.
  • Signs of substandard care or bills left unpaid despite the availability of adequate financial resources… Learn More

Do you have more questions about transitioning your elderly parents’ finances?

At Marcia L. Campbell, CPA we act as trusted professional fiduciaries for many of our clients. As licensed professionals, we understand the importance of knowing that your trust, estate, or conservatorship is being managed legally, ethically, and accurately. We act as caring and objective fiduciaries and client advocates.

If you need help, please contact us by filling out our Contact Form or by giving our office a call at +1(951)686-3608.

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