It’s common for the roles to reverse as we age — we begin watching out for our parents as they once did for us. For various reasons, people find themselves managing finances for their aging parents. While helping them keep up on their monthly bills may be straightforward, there are a few other factors to consider.
This isn’t always an easy topic to navigate and parents vary in their ability to manage their finances. For capable parents, you’re preparing for the future and unforeseen circumstances; other parents need immediate help.
Whatever stage your family is in, it’s important to realize there is a future to address. By taking a few administrative steps, you can help reduce the stress for all involved.
Overview on Managing Finances for Aging Parents
Address the future to understand your role and reduce future stress.
Update important documents such as a will or Power of Attorney.
Who will physically care for them? Long-term care planning requires financial consideration.
Create a plan — we can help.
Addressing the Future
With a futuristic approach, fully-capable parents will understand you’re gathering information about their finances so you can seamlessly step in to help when they need you. For less-able parents, speaking about the future can minimize focus on the present situation that has led to their need for assistance. Regardless, it’s important to remain positive, honest, and communicate that you have their best interest in mind.
If your parents were high-income earners, hold various investments, or own many assets, their financial scenario may have complexities you’re unaware of. If a parent is ill or injured, your first financial task is often to pay bills or transfer money. Start by gaining an understanding of how they conduct their day-to-day banking and learn where their checking and savings accounts are held.
With the day-to-day business squared away, find out if they have connections to a CPA or financial advisor and document their contact information. These individuals can help down the road when it comes to taxes, investment management, and withdrawing funds.
Gathering financial information from your parents is a great start. Now take a few administrative steps to solidify your ability to help your parents when a need arises.
Update Important Documents
Every family is different when it comes to handling estates. At a minimum, you want to ensure your parents have a will or other legal documentation for how they’d like their assets and possessions dispersed after their passing.
Now is also time to remind them about making updates to their will. Grandchildren, philanthropic desires, family dynamics — life throws us bouts of change — which is why we must review important documents from time to time.
When it comes to taking care of business for a parent, having a Power of Attorney (POA) in place will make life much easier. With POA rights, you can transact on behalf of a parent with ease. Whether they are traveling and need a hand back home or you're stepping in more permanently, you can help ensure they don’t miss an opportunity, fall behind, make mistakes, and avoid elderly-targeted scams.
For a deeper look, hop over to our other blog: Don’t Skip Assigning a Power of Attorney to Your Financial Matters.
Who Will Physically Care For Them?
While attending to financial matters is one thing, providing physical care is an entirely different endeavor. Long-term care is an important topic to add to this discussion because the available options vary in terms of cost.
There’s no right or wrong answer when it comes to who will care for your parents. The goal, first and foremost, is meeting their physical needs. When discussing long-term care, here are a few topics to cover:
Discuss options like family care, in-home care, and long-term care (assisted living and nursing home facilities)
Gain an understanding of their desires
Share an overview of current long-term care costs
Review how financially prepared they are to cover the costs
Talk about how their desires may affect or impact other family members
This part of the discussion may be difficult; it’s ok to revisit later if the conversation is not productive. Even small bits of information from your parents regarding their long-term care desires will help you make informed decisions in the future.
The Importance of Having a Plan
After gathering information, verifying a will is in place, and implementing POA rights, you’re ready to help your parents manage their finances when they need you most. Instead of hesitating or making emotional-driven decisions, you can assist with confidence.
If you’re managing finances for aging parents, our team at Integrated Wealth Management is here to help. We take great pride in treating our clients like family. From retirement planning to legacy planning — we’re here to guide you through the many important financial decisions associated with aging and retirement.
To learn more about our services, schedule a meeting to speak with a financial advisor to learn how we can help.
About Integrated Wealth Management
Integrated Wealth Management is a fee-only firm based in Delaware offering wealth management and retirement planning services. We’re financial advisors in Wilmington and Rehoboth Beach, no matter where you are in Delaware, we’re here to serve your retirement planning needs. Through integrated financial planning, investment management, and tax minimization strategies, we want you to enjoy retirement to the fullest.
We’re here to guide you through the 3 stages of retirement:
Uncertainty Stage: When you are within 10 years of retirement and have questions about how to make it work
Stability Stage: When you have reached the financial milestone to retire comfortably and confidently
Reflection Stage: When you are looking to leave a legacy
We are also here to provide experienced, empathetic support during times of loss, such as the death of a life partner. You need confidence and a sense of security to enjoy retirement. As fiduciaries with a fee-only structure, we never receive commissions. Free of ulterior motives, you can be sure we’re focused on your goals.