Newsletter Articles Anderson, O'Brien, Bertz, Skrenes & Golla Law

Helping Agening Parents With Finances

Attorney Amy J. Eddy - December 2011

Do you worry about the ability of your parents to handle their financial affairs as they age? Many older people need assistance because of physical impairments that limit their abilities or due to mental disease or disability, such as Alzheimer's disease or other types of dementia. Caring for an aging parent can be emotionally challenging, but the consequences of the failure to properly handle their finances can be severe. Many elderly people who are unable to handle their finances become susceptible to financial abuse and exploitation, potentially losing large sums of money that could otherwise provide for their needs.

The best time to discuss this issue is before an elderly parent needs help. Come up with a plan as to how you will work together if help is needed in the future. Make sure your parents have established a durable power of attorney which allows you or another trusted person to act on their behalf. The durable power of attorney is a legal document that names an agent to make financial decisions for someone else if they become unable to do so on their own. This type of document must be executed while your parents still have the legal capacity to do so. In addition to having the proper documents in place, you need to have some discussions about the way in which finances will be handled, including how payment for long-term care will be managed, whether through private payment or public benefits.

If your parents are not comfortable talking directly with you about their personal finances, respect their privacy. You may suggest that they talk with an attorney who specializes in estate planning or elder law and recommend that they seek advice from their financial advisor and accountant as well. While parents may be hesitant to share detailed financial information, the following are some examples of questions to ask without the need to ask for specific financial information:

• Do you have a Will? If so, where is it located?

• Have you granted someone a durable power of attorney or a health care power of attorney? If so, who has the power, and where is the document located?

• Do you have a safe deposit box? If so, where is it located and where is the key? Is anyone else authorized to enter the safe deposit box? Is there a list of contents?

• What is the location of personal documents, such as birth certificates, social security, military service and pension records?

• Have you made a list of assets, including bank accounts, investments, real estate, stocks, bonds, certificates of deposit, etc., and if so, where is it located?

• Who are your advisors (attorney, accountant, financial advisor) and is there a list of contact information?

• Do you have a letter of instruction for distribution of personal property?

Remember that communication is a key aspect of helping parents with finances. Even if mental capacities are diminished, it is helpful do discuss everything related to their finances with them before making any changes or decisions. Make sure that everyone understands that the purpose of your assistance is not to take away independence and that you will continue to keep them informed as much as possible. It is also important to communicate with other family members. Even if one child is primarily assisting with finances, it is helpful to keep all siblings informed — especially those who are not local or involved in the day-to-day management of your parents' lives.

With proper planning, your family can avoid potential disagree-ments over care and finances and help alleviate the stress of making difficult choices in crisis situations.

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