Maintaining our independence and protecting our financial well-being are often the primary concerns as we age. However, as the son or daughter of your aging parent, you recognize that it may be in their best interest to take some of those financial responsibilities away as they age.
Initially, you will want to keep an eye on your parent’s financial wellbeing. There are some clear behaviors and signs that will help you decide when your parent needs help.
Once you determine that it is time to begin helping your parents with their finances, you will want to become their Power of Attorney. This process opens up the conversation to determine if and what responsibilities you can take away for your parents or help automate to reduce their decision-making in the future.
3 Areas Your Parents Could Decrease Their Financial Decision-Making Responsibilities
1. Bank Accounts
If your parents still have an income, make sure it is being automatically deposited. This includes pensions, Social Security, and brokerage income. Similarly, debts can be paid through online bill pay or automatic withdrawal. This avoids checks or bills getting lost in stacks of paper.
We recommend you review bank statements regularly to guard against unauthorized withdrawals and identify theft, which is becoming increasingly more common.
2. Tax Returns
Most seniors find taxes confusing, even frustrating. And you thought you had nothing in common with your aging parents! Considering that this is a repeating process that has a clear deadline, this is an area that your parents may be ready to give up responsibility for. If their income is low, your parent may not meet filing requirements, but we suggest asking anyway. Penalties and interest add up quickly, so be sure to tackle this right away!
Once you know where they stand, opt to e-file tax returns. That way, tax refunds, tax liabilities and estimate payments can be deposited/withdrawn automatically.
As your parents age, they may need help sorting through mail, including magazines, catalogs, and donation requests. They may not distinguish junk mail from important documents. So consider sitting down with them to check their mail, especially items that involve purchase or donation options. Also, add your parent’s phone number to the Do Not Call Registry to protect them from high-pressure sales.
Lastly, if you are the power of attorney, consider forwarding mail related to income and expenses to your address. This tactic ensures important documents will not be lost in the mail.
Helping mom or dad with finances brings plenty of emotions to the surface. They may not want to relinquish control to one of their children because no matter how old you are, you’re still their child!
If you have any questions for us, please don’t hesitate to contact us.