As your parents grow older, it may be more challenging for them to oversee their finances. As their son or daughter, you may feel that it’s your responsibility to step in and help them.
Before doing so, here are the five things you should consider to ensure you are prepared:
- Understand the Responsibility
- Start a Conversation Early
- Ask Questions
- Discuss Senior Scams
- Respect Their Wishes
5 Ways to Help Prepare Your Parent’s Financial Plan
1. Understand the Responsibility
It is already a big responsibility to manage your own finances, let alone a parent’s finances. There are many factors that go into helping the elderly with finances such as managing day to day income and expenses, helping them decide on a power of attorney and healthcare proxy, and creating a living trust.
Before taking over your parents’ finances, be aware of what roles this would consist of and decide whether or not you want to take on the responsibility or hand it off to a skilled expert in order to spend more quality time with your parents when they need it most.
Related Article: The Difference Between a Power of Attorney and Healthcare Proxy
2. Start a Conversation Early
Once you have decided whether you would like to take on the responsibility for your parent’s finances or hand it off to someone who handles eldercare finances for a living, it is time to discuss your thoughts and decision with your parents.
It is better to have this conversation earlier rather than later before anything happens. By doing so, it helps protect them from senior scams, other money mistakes, and sets them up for their future.
Although there is no specific time to talk about this with them, big financial life events such as retirement and paying off their mortgage is a great segway into having this conversation. It is also important to listen any time they discuss challenges paying their bills or any other troubles they may mention in regards to their finances.
3. Ask Questions
You never know what could happen, which is why it is important to ask your parents financial questions early in case an emergency arises. As a son or daughter, it is important that you have access to help them with their insurance, social security, or eldercare expenses.
4. Discuss Senior Scams
Scammers will find any opportunity, especially during emotional times, to take advantage of senior citizens. If your parents decide they want to be in control of their own finances at this time, it is crucial that they are aware of the current scams that are circulating. Take the time to explain these scams to them and discuss ways to prevent them from falling victim. You can read about these scams here.
Related Article: 6 Senior Scams to Be Aware of in 2020
5. Respect Their Wishes
At the end of the day, they are your parents and they are in charge of their own finances. Even though you may think it may be in their best interest to accept your help, there is only so much you are able to do. With time, they may change their mind, and it is good to listen for key indicators that they need assistance.
Need Guidance on Talking to Your Parents About Their Finances?
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