If you act too interested in your parents’ finances, they may get uneasy. But it’s never too early to find out what you can – particularly if you expect to have to support one or both of your parents in the future. The best time to start talking finances is when your parents still appear to be managing their money properly. Bring up the subject by telling them that you need some key financial information – such as income, assets, expenses and the location of financial papers and their safe deposit box – so that you can help them if they ever need you to do so. Also, be sure that you’re a co-signer on their accounts so that you can access their safe deposit box or write checks at a later date, if necessary.
If your parents fight you, ask them to reconsider giving you the information, especially if they appear to be having financial troubles. If they still don’t budge, ask again at a later date – when both you and your parents are relaxed. Try not get upset or insist that they give you the information. Just let them know you’re available to help when and if they need you.
As my friend Christine’s parents reached their mid-seventies, she asked several times about their finances – with little luck. “They said they could manage their own money, thank you, and would let me know if they needed my help,” she told me.
About five years later, when Christine’s mother ran up a $5,000 tab with a cable shopping channel and her parents’ electricity was turned off because her father had repeatedly forgotten to pay the electric bill, Christine’s father called her. She was able to get their electric service restored, return many of her mother’s TV purchases and get their finances back on track. She also worked with them to develop a budget they could stick with and then helped them twice a month with their bills.
Some older people, like Christine’s parents, will seek financial help when they need it; others may keep financial troubles to themselves, either out of embarrassment or hesitation to give up control of their money. If your parents’ medical bills start to mount, if creditors call, or if their house is filled with frivolous purchases while their bills remain unpaid, you’ll need to intervene – whether they ask you to or not. At that point, your parents may be secretly relieved that you have taken charge. In fact, you may face more opposition from siblings or other family members – who believe they should be the ones handling your aging loved ones finances – than from your parents themselves.
To conduct business on your parents’ behalf, you’ll need to see a lawyer and draw up a durable power of attorney. Be sure to consult with your siblings first, as this will avoid conflict later. If they protest, you might want to seek family counseling or hire a professional financial advisor to help with big financial decisions. Either way, consulting a financial advisor can help you find ways to make the most of what money your parents have.
If you do speak with your parents about hiring a financial advisor, be comforting. Tell them you’ve hired a professional who can help them pay off their bills, stop creditors from calling and see that they’ll have as much money as possible to pay for their care. Just as important, let them know that you won’t control all of the money – just what is needed for major purchases and essential living expenses, both now and in the future. Assure them that they will still have some money to do with as they wish.
If they are still active give them ample spending money or speak to your credit card company about getting them a companion card on your account with a low limit. That way, your parents can make small purchases without the danger of losing cash or charging big-ticket items they neither want nor need. With a companion card on your account, the bill comes directly to you so that you can pay it yourself and monitor purchases, if necessary. Because managing one’s own money is equated with independence and security in our society, having control over at least some of their money is clearly going to be important to your parents.
Dr. Alexis Abramson
