Elder Parent’s Finances are Often a Sign of Decline

Parent's FinancesParent’s finances and how they manage their bills and assets give a window into their cognitive and functional abilities. Older adults share to varying degrees information about their finances with their grown children. It is certainly a very personal matter and connects directly into our sense of independence. However, with advancing age, some degree of cognitive decline may occur and with finances, this can be a costly mix.

Signs of Elder Parent’s Finances and Trouble

Beyond the scams focused on grandparents and other older people, day to day banking and bill paying may become more challenging for someone who is experiencing memory and cognitive impairment. Memory deficits are a huge area onto itself. Perhaps even more threatening to a parent’s finances  is impaired judgement .

Things to look for include

-Routine lateness in paying bills

-Unpaid bills and “Final Notices”

-Stacks of unopened mail

-Repetition of same questions and concerns

-New approach to finances, i.e. being less risk adverse

-Signs that your parents may have already been victims of fraud

-Significant contributions to new causes or charities

-Unusual purchases which may or may not appear on credit card statements

-New interest in “Get Rich” offers

-A new person in their life who seems to have influence over your mother or father

-Suddenly changing banks, financial advisors and other professionals

Solutions for Better Financial Well-being

All of these are touchy issues. Ideally conversations about finances and abilities were begun sometime after retirement and continued over time. If this is not the case with your family, act quickly to stop any losses but tread cautiously with your parents. Open discussions at a favorable time and location. Avoid shouting and arguing. Show them an article on the topic. Share your concern and present examples of what has occurred and how to mitigate it.  Appeal to their common sense and desire for independence. A bookeeper can be hired to come by once a month to review bill payments and the mail. If your parent or loved one is beyond reasoning and a danger to their own well-being, you may need to bring in an attorney and consider guardianship. This is an extreme situation of psychiatric illness or dementia. Other measures can be put into place to protect your parent and their assets. Expect them to have strong feelings about any loss of control and the “intrusion” you are causing.

If you have a Durable Power of Attorney, you can use it at the bank and with financial institutions. You will have the right to get statements and can monitor credit cards and accounts. It is a good idea to meet the financial people in your parent’s life. A simple and quick way to make sure bills are paid and to monitor activity is to set up electronic auto-payments — at least of the large ticket items and routine bills – mortgage, maintenance, utilities, insurance etc. You may lower the credit limit on credit cards and hopefully consolidate to one or two cards. You can look at credit reports and freeze accounts – just let your parent know it is occurring and why!

Easy when Agreeable

Most of the above suggestions are easier when your parent is agreeable and even forthcoming with information. Remember the objective is to keep elder finances safe and your parent’s integrity in place. Again, ideally this process occurs over many years. If your parent cannot manage their finances it is a filial responsibility to assist them. It may be time to even consider moving into senior residences.  All of us can forget to pay a bill or even fall for a scam but we can recoup. For an aging senior health issues, medication issues or cognitive issues may be causing the financial lapses. Depending on individual circumstances and openness to help will influence the actions you take and when.  If you are lucky enough to have agreeable parents who are open about finances with you, you can do more, and more easily.

It is always a good idea to review financial plans, beneficiaries and that things are up to date. When you are doing it for yourself, you may invite your folks along. The more you share with your parents about finances and financial planning, the more likely they will share with you.