Parents, Aging and Finances
Parents, aging, and finances. Talking about aging with parents can be one of those difficult conversations we want to put off for another day. Like other difficult conversations, though, avoidance usually makes it harder.
Transitions in aging can fall into four broad categories: financial matters; health care decisions; living arrangements; and transportation. This week’s post tackles the topic of finances.
Helping Parents With Finances
The downside of the digital age is that it makes seniors more susceptible to fraud and scams. They can send or spend money anywhere, or divulge sensitive information, with one click. Without being physically present, adult children might not be as quick to catch the warning signs that a parent has become susceptible.
The most common kind of elder financial abuse occurs from people close to the parent. Sometimes it can be a new person in their lives – a girlfriend or boyfriend, a housekeeper, or a companion caregiver. Checking up on new friends and companions might not feel good, but is a necessary step.
Are parents located far away? In her wsj.com article, Veronica Dagher interviews financial advisors and aging experts on how to help parents with finances from a distance.
By volunteering to help with bill paying, the person with the DPOA can begin to get acquainted with the parent’s accounts, particularly what kind of expenses are normal and which are not.
Parents: Start Early, Small and Often
Parents would be wise to communicate early with adult children. While the topic of money is taboo in many households, it will make everyone’s life easier if the parent is open and communicative. It’s helpful to know how many accounts there are, how the accounts are managed, and approximate amounts or a range of amounts in each. Describe how the transition of help with money would go in an ideal world. Other steps:
- Provide contact information for the financial advisor, investment manager, lawyer, and accountant.
- Arrange an annual family meeting with any or all of the above.
- Begin conversations early with small topics first. Allow everyone involved to grow into their roles.
- Build on that trust to expand financial duties as time goes on.
Adult Children: Start Early, Small, and Often
For the adult children, instead of anticipating one future difficult conversation, experts recommend thinking of each topic as a continuous conversation to be had over a number of months or years. Following are some pointers.
Start the conversation with curiosity.
“Mom/Dad, if you should ever reach the point where you’re unable to (balance your checkbook, drive on the interstate, feel confident about a medical decision, feel comfortable living on your own), what would you like to have happen?”
“What would be an example of something that would indicate the point at which you would like help?”
Listen intently. Even if it is not what you would like, check for understanding by repeating back what you heard. For example, “So what I hear you saying is that, if you have a fall, that’s when you’ll ask for help. Is that true?” Sometimes when we hear things back, we change our minds, or clarify.
Things To Do Now
As noted in Dagher’s article, one of the most important documents is a Durable Power of Attorney (DPOA). If a DPOA is more than a few years old, or there has been a change in health status, have it reviewed by an elder law attorney. The attorney will make sure the powers granted are up to date with current law and broad enough for the parent’s current situation.
Since so much of our financial lives are online, it’s also wise for a parent to share emails, userids, and passwords with the person named as DPOA. Ideally, all of the financial institutions where a parent has accounts would have copies of the DPOA and confirm they recognize it as valid.
By volunteering to help with bill paying, the person with the DPOA can
- begin to get acquainted with the parent’s accounts
- become known to the institutions where accounts are held and
- learn what kind of expenses are normal and which are not.
Additionally, it tends to work better if just one person is named as DPOA. Then name a backup or successor in case they are unavailable. Joint DPOAs can be a headache.
DPOA Does Not Work for Health Care
While the DPOA covers financial and legal matters, it does not address health care decisions. For those, a health care proxy or Designation of Health Care Surrogate is necessary. With Covid-19, family members may not be allowed in the hospital. Should an emergency happen, the health care proxy, as well as any living will, DNR (Do Not Resuscitate), or DNH (Do Not Hospitalize) documents should be provided to paramedics and/or hospital staff.
For a free resource specifically addressing the talk about end-of-life care, see The Conversation Project, at https://theconversationproject.org/starter-kits/. For a primer on the 4 basic estate planning documents needed by everyone, see Part 2 of 2 – The Talk That Only Gets Tougher – 4 Documents.
Simple But Not Easy
These are difficult scenarios to think about or talk about. The most important thing to do now is begin with a single step. Whether you are the parent of adult children, or the adult child of an aging parent, it’s never too early to broach the topic. Rather than waiting until it’s too late, start while it seems too soon. That kind of talk will be a lot easier.