During the aging process, some things that once came easily can get more challenging. One example is financial management.
As the Institute of Medicine reported in 2015, growing older often comes with “cognitive aging” — that is, a decline in mental sharpness, memory, and decision-making — even without the presence of neurodegenerative diseases like Alzheimer’s and other common causes of dementia.
That means that the ability to manage finances can be one of the first skills to begin decreasing in older adults. The practical implications of this can be on the mild side, like needing more time to solve problems or make decisions. But they can also be more severe, like forgetting to make a payment, spending money unwisely, misplacing important documents, exploitation by credit card or reverse mortgage companies, and more.
A decline in financial management skills can be uncomfortable and frustrating for seniors; after all, handling one’s own money is a big part of maintaining independence and autonomy. So while it’s important to approach this topic with your aging parents, it’s also important to do so sensitively.
Here are some useful tips to help you protect your aging parents’ finances.
Start the Conversation Sooner, Not Later
Your parent may not be experiencing any effects of cognitive aging. They may be mentally sharp, and fully able to manage their finances. That doesn’t necessarily mean you shouldn’t start the conversation.
In fact, a discussion of the handling of their financial affairs should problems arise may even be easier for your parent to stomach when it is presented as planning for the hypothetical future, not an urgent issue that may induce defensiveness.
Starting the conversation early will also give you more time to understand the nuances of their finances (and, perhaps, more accurate information from your parent).
Furthermore, https://www.nia.nih.gov/ recommends acquiring advance written consent to discuss your parents’ personal affairs with financial and healthcare professionals; your parent may be more open to this at an earlier stage.
Gather Essential Documents and Account Information
Another step that is best taken earlier in the process is to locate and compile information on essential documents and account access. You can start by making a list of accounts and important documents. These can include:
- Birth certificates
- Insurance policies
- Bank statements
- Social Security payments
- Pension records
- Car titles
- Safe deposit boxes
- …and more.
Double-check that everything is valid and up-to-date, and that all accounts are in good standing. Next, work with your parent to gain access to their accounts (this can often be a complicated process). If they are hesitant to share this information with you, reassure them that you will not use the information until you have to, and that it is for your own protection. You can also offer to have them organize the information and store it themselves, without giving you access — as long as they tell you where it is.
Maintain Open Communication, and Respect Their Point of View
Remember, this is not an easy process for your parent to face, and they may struggle to relinquish control or even acknowledge the possibility of being unable to manage their own finances.
It’s important that you keep their point of view in mind, and maintain open and clear communication with them. Start gradually, and do things together at first. Keep them involved in their financial decisions for as long as possible, and allow them plenty of time to get comfortable with your involvement.
Document Everything You Do
When it comes to money, misunderstandings and conflicts can tend to arise. In addition to communicating with your parent, you should also keep other members of the family informed. Furthermore, maintaining lines of communication with other family members about your parents’ finances can also provide you with a support system.
It’s also advisable to keep a complete record of your discussions, decisions, and actions you take regarding your parent’s finances. That way, you will be able to clear up any confusion that does spring up and demonstrate that you are acting responsibly in your parent’s best interest.
Know When It’s Time to Intervene
Even if you have spent time with your parent developing a plan for when they are unable to handle their own finances, it can still be very difficult to know exactly when to take control.
There are some warning signs you can watch out for. For example, if their purchasing behavior changes. If your parent is making a lot of unusual or expensive purchases that don’t align with their interests or lifestyle, it could be a cue that you need to step in.
Likewise, if they are experiencing memory problems, seem to be mishandling their money, are struggling with arthritis or vision loss, or have piles of unopened mail, they may need help.
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