Our aging parents often require help managing their affairs. It can be hard to find the right balance between maintaining their autonomy and preserving their welfare.
How do you begin helping them without crossing boundaries? Here’s a guide to navigating these waters.
Preserving Aging Parents' Independence
Preserving your aging parents' autonomy maintains their confidence and sense of self. But stepping in too late can result in financial mishaps or vulnerability to scams.
Keeping an eye on your parents’ routines and financial habits can provide insights regarding the right time to help them. You can watch for signs like cognitive decline, and financial vulnerability. Here's what to look out for to spot these issues:
Disorganization: Missing payments, accumulating late fees, and difficulty completing once-routine tasks.
Unexpected expenses: Purchases or gifts that contradict established values or spending habits.
Manipulative relationships: A new individual exerting disproportionate influence over decisions.
Memory issues: Increased forgetfulness, including lapses in recalling recent discussions.
Be wary of scams that target the elderly, which can range from phone calls pretending to be government agencies to fraudulent emails.
Legal and Financial Preparations
Preparation is key. Gather these essential documents while your parents are still able to help:
Identification and life records: Birth certificate, marriage/divorce/death certificates.
Legal directives: A current will, trust, advance health care directive, and power of attorney (POA)—a legal document empowering an individual to make decisions on behalf of another person.
Property and insurance: Deed to their home, car title and registration, and all insurance policies.
These documents ensure you’re not caught off-guard if you need to take action quickly. It’s far easier to address any gaps now than in an emergency.
Gaining Access and Designating Trusted Roles
Engage your parents in selecting a trusted contact—an individual their financial institution can contact if there are concerns regarding their account. Establish this safety net as soon as possible.
Building a relationship with your parents' financial advisor and estate attorney ensures a seamless transition when you need to engage more actively in their financial matters. We have had the children of adult clients wanting to learn more about their parents’ finances only to discover how they can apply these strategies to their own finances.
Many individuals seek these professionals to be ready for the responsibilities that come with managing their parent's financial affairs. These experts serve as valuable partners, assisting you in navigating the complexities of wealth transfer and estate planning.
Appointing a power of attorney is essential. This individual should understand your parents' wishes and be ready to act quickly when required. While it may be tempting to appoint multiple children to the position of power of attorney, it slows decision making during emergencies and creates undue family stress.
Conclusion
Begin now to discuss with your parents about what we covered here for a smoother, more confident decision-making down the line.
Contact JDH Wealth if you have questions on protecting your parents’ financial livelihoods.
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