Last Updated on 25/04/2022 by Deepak Singla
As people you love, including your parents, start to get older, they need help managing their finances. Their finances and estate must stay in order. You can make this possible by taking on a leadership role. Although this may appear to be a difficult or intimidating process, there are steps you can take to make it easier for both you and your parents.
Your parents will be more vulnerable to the growing number of online scams as they age. Hence, early financial planning with your parents is crucial to keeping them safe at all times. You may want to browse here to learn more about current scams, particularly Facebook phishing.
Here are seven ways to protect the finances and assets of your elderly parents:
1. Manage Your Parents’ Finances With The Assistance Of A Professional
Managing parents’ finances can be a challenging and time-consuming task for some. If you’re having trouble, don’t be afraid to hire a professional to keep things simple and streamlined.
In most cases, a financial advisor familiar with your parents’ financial history or a banker who can provide you with updates on relevant changes to the account balances would be of great help. Even if your parents’ financial situation appears complicated, managing it does not have to be.
2. Start Talking About Financial Planning As Soon As Possible
It’s ideal to start financial planning for senior citizens in your life right away. Having the conversation about what they would like to see with their finances makes things easier if you ever have to take over in the future.
To avoid any problems with privacy regulations, have your parents prepare written consent for you to communicate with their bankers and financial consultants. Your parents can also work with a lawyer to give you a power of attorney, which allows you to manage their assets and finances on their behalf.
Once you have written consent, it will be easier to access the documents and information you need. Moreover, because discussing money with family can be emotional, having an open and honest conversation will demonstrate your concern and ensure everyone is on the same page.
3. Take Steps To Simplify Financial Management
Once you take over your parents’ finances, you must ensure that bills are paid on time and that deposits are made on a routine basis. Consider working with a banker to have any recurring income sources, such as a retirement fund, deposited directly into their checking account.
If your parents have trouble remembering to pay their bills independently, setting up automatic bill payments can help them stay up to date.
4. Obtain Information About Your Parents’ Financial Situation
Each person’s finances will vary, but when you’re dealing with your aging parent’s financial history, you have several matters to monitor. Mortgages, account numbers, lines of credit, retirement accounts, and liquid assets are just a few of the things to look into as you learn more about your parents’ financial situation.
It’s best to work with your parents to figure out and consolidate everything. To learn more about your parents’ accounts, gather all physical documents in one place and consult with their banker and financial advisor.
5. Continue To Discuss Financial Planning
Let your parents know whenever you make changes to their finances. Maintaining an open line of communication allows you to make more informed decisions about the money you’re managing while also reassuring your parents that they’re in good hands.
6. Be Wary Of Warning Signs
Once you’ve engaged in money conversations with your parents ahead of time, or you already have a plan on how to help when they need it, knowing when to make a move can be a challenge. If you start noticing any of these indications, it may be time for you to step up and assist your parents with their financial planning:
- Unusual Purchases. If your parents start buying things that don’t fit their needs or lifestyle, or if they start entering contests or sweepstakes, it could spiral out of control. The elderly are particularly vulnerable to scams.
- Setbacks In Terms Of Health. Your elderly parents’ vision may deteriorate due to aging, so driving to the bank will be difficult for them. In some cases, arthritis can make writing checks or addressing envelopes painful. If you notice that these activities are tiring them out, it’s a sign that they require assistance.
- Difficulty With Online Transactions. When your parents are having a hard time with online transactions, it might be time to step in to assist them because they’re at high risk for fraud and identity theft.
7. Keep Emotions In Mind
Considering the advancing age of your parents and their needing assistance to manage their finances can be troublesome on both sides. Bringing up the subject can be demoralizing, too, so think about what you want to say ahead of time to keep the conversation simple and considerate.
Remind your parents that your efforts to assist them with their finances are for their sake. Your assistance will make them feel secure and enjoy their later years without fear of possible fraud or failure to pay their bills on time.
Additionally, remind your parents that just because you’re managing their finances doesn’t mean you respect them any less or think they’re incapable of caring for themselves. From here, you can devise a strategy that benefits you both.
Final Thoughts
Time will come when your aging parents will require your assistance when managing their finances. Make it a priority to protect your parents’ finances in the best possible way. Keep in mind the pointers presented here to ensure that they have a stress-free retirement and can continue to do what they enjoy.
