No doubt most of us with elderly parents let ourselves slide into the “what ifs” on occasion – what if Mom suffers a fall and is hospitalized, or needs rehab; what if Dad were to pass away suddenly, leaving Mom to deal with bills and funeral home arrangements? Here’s another that’s not as clear cut but just as worrisome: what if Mom, who handles the family finances, starts showing signs of significant cognitive decline? As unpleasant as these scenarios are, it’s important for us not to shy away from them, but rather to use them as a catalyst towards planning ahead – particularly around money matters. No matter how financially savvy you might be, if you had to suddenly assume control of Mom or Dad’s finances – or make the unpleasant choice to step in – would you be ready?
What to Know Before a Crisis Happens
No one wants to think of a parent’s sudden death or incapacitation – but it’s far better to face this possibility before it ever happens, when you’re still able to get the information and access you’ll need to offer assistance after the fact. Here are the questions you should be asking mom or dad right now:
- Where do they keep financial records? Even if dad doesn’t want you to lay eyes on these right now, it’s important he tell you how you can when the time comes, along with any codes or keys necessary for access.
- Have they designated a Durable Power of Attorney? A Durable Power of Attorney gives one or more appointed people the authority to make financial decisions for someone should they become incapacitated.
- What are their current bill paying arrangements? Does Mom use paper checks and recording payments on bank statements? Is she using online banking or Bill Pay services? Has she set up automatic deductions for any accounts?
- What subsidies are they receiving, if any? Whether Dad’s getting Medicare, Medicaid, Social Security or a combination of all three, it’s important to know his status in case he were to become incapacitated and possibly be eligible for further government assistance.
- What’s their health insurance profile? Do they have insurance through an employer, or as part of a pension? Have they purchased long-term health insurance to take care of costs not covered by basic health insurance?
When to Step In, and How
Dad’s always been on top of bills and investments, but has shown worrisome memory lapses lately that make you worry if he’s still handling things properly. If you’re thinking you might need to do some digging, here are some possible warning signs to look for:
- Unopened bills and mail piling up in the house
- Late statements
- Extravagant or out-of-character purchases
- Creditors calling
- An influx of charitable solicitations or thank yous
- A sudden change in investment strategy – a risky stock purchase, for example
Making the decision to get more involved is daunting, for sure, but can be done gradually and somewhat indirectly. Experts often suggest starting a dialogue with some open-ended questions, like “Tell me about that new account you opened” or, “I saw some statements sitting in the living room – can I help you sort through those?” It also can be effective to bring in an objective third party into the mix – a financial advisor, attorney, or trusted family friend – to help make the case for Dad getting a little help to ensure his well-earned assets are protected.
But no matter how much you might dread having the conversation, or how deeply you want to spare Dad any embarrassment, this is one of those scenarios that unfortunately is almost guaranteed to get worse over time. And it’s important to consider that, if you hesitate too long, others may intervene who do not have your parents’ best interests at heart.