Paying bills is unarguably part of life as a grown up, yet it can become overwhelming,
especially for seniors. Indeed, managing finances is one of the first areas in which your
parents or other elders in your life might need assistance with even if they are
otherwise independent.
In many cases the difficulties have more to do with an overload of information in the
form of an overflowing mailbox than with having the funds to cover the bills or the math
skills to tally the bank balance. And, because finances are often a sensitive subject, it’s
not always easy to know when to offer help.
Signs that an elder might be struggling include:
•A backlog of unopened mail
•Duplicate payments
•Late notices when there are funds to pay
•Increased solicitations from charities, particularly those with which the
senior has no connection
•An unbalanced checkbook
•Unorganized bank records
•Financial files in disarray
By planning ahead, and having the courage to start this conversation early, you can
help safeguard against financial mistakes that might be as simple as paying a bill twice
or, worse, those that come with the added shame many feel after losing money to a
scam. How a person reacts to the intervention will vary. For some, it will be important
to know that you aren’t “taking over” but are instead taking steps to make sure they are
protected. Others might happily give up the responsibility.
If you expect resistance, think about having another person at the meeting; a trusted
relative or friend. And, as with all “tough talks,” plan ahead -- recognizing the
importance of timing and tone. Taking action early is key and transparency is vital to
maintaining family harmony. Plans laid out in advance are always better than reacting to a
crisis. You don’t want the emotions that come with it to force action.
You might also want to consider a Durable Power of Attorney or Living Trust. The law
requires such documents be signed while an individual is competent to name someone
to make decisions on his or her behalf. Legal directives like these are important
safeguards for all, and involve a much simpler legal process than conservatorship.
Once you’ve got a plan in place, learn the proper steps to managing someone else’s
money. Protection of the senior is key since declines in financial management are so
easily exploited.
•Find the financial documents and inventory the accounts. Schedule B on the tax
return is a good place to start because it should list the institutions with which there are
accounts.
•Learn the cash flow. List payments due and the schedule of incoming monies
such as Social Security, investment dividends, or rental income.
•Pay the bills or seek help with payment plans.
•Keep your parents money separate from yours.
•Avoid possible conflicts of interest such as paying your son to paint your mother’s
house.
•Avoid paying in cash.
•Document everything you do. This helps show you are handling the money
responsibly.
•Consider a financial planner. Even if you are good with finances, an independent
voice will validate your decisions and help you better understand how to protect your
parents’ assets with regard to their specific personal situation.
If your parents resist your involvement, ask if you can help them with their taxes or by
organizing their home office files. This will provide insight on their financial
management skills and might give your parents greater comfort with the idea of having
you help even more.
And remember, talk early and talk often. One conversation about your parents’
finances will likely not be enough. But it’s a valuable dialogue that will pay off with
increased peace of mind for you both.
