Taking care of aging parents means more than their physical health.

When someone gets older, the only thing at risk isn’t their health. Their finances are in jeopardy too.

As unfortunate as it seems, with age often comes mental decline. This can lead to trouble with day to day, poor planning, and vulnerability.

That’s why it’s imperative to protect your parents when they no longer have the mental capacity to do so.

Step 1: Communicate

This step might seem obvious, but it is often overlooked by families. It’s important that you begin having the discussion early on. Meaning, before mental decline begins to happen.

Of course, we understand how difficult this conversation can be. But it is imperative that your parents understand it is in their best interest to do so.

During this conversation work out all the finer details from them. For example, get them to write down a list of their bank accounts, numbers, institutions, contact details, debts, financial aids, or investments. Basically, anything that you would need to know about to take over.

Just be sure that your loved one understands that you are acting in their best interest and not trying to interfere with their independence, rather, you are protecting it.

Step 2: Investigate Strategies

Once you’ve had the difficult conversation with your aging parents, it’s time to determine what the best strategy will be. This can involve a number of options (power of attorney, guardian, living trust trustee, etc.). We suggest having this conversation with a trained professional, like us at A.P Accounting and Tax Services.

A trained financial professional will be able to assess your parent’s current financial state by carefully reviewing all of their accounts. From here, we can have an open and honest discussion on what the best route would be to protect them in the long-term.

As was mentioned above, some of the options are to establish power of attorney over their money. This would mean signing a legal document that would give you legal authority over all of their money and property.

Or, it could mean something like a guardian of property. This is where you’d be directly responsible for their property, finances, or person (however, this is often only done when a court has determined a person cannot manage these on their own).

Step 3: Impalement and Stay Involved

It isn’t enough to simply take over your parent’s finances and step away from the issue. Rather, you should continuously be involved in protecting their financial status, regardless of how much ‘control’ you have over it.

Once you’ve determined what the best option will be for the takeover (i.e. guardianship, trustee, etc.) meet with a financial advisor to sign the documents and ensure all the paperwork is in order. Plus, be sure to understand exactly what your responsibilities are moving forward and what (if anything) your parents will be responsible for.

Step 4:  Respect Their Wishes

We cannot stress enough how important it is for you to respect the wishes of your parents. This means considering how they want to live out their golden years. Even if they are experiencing some mental decline, it is your duty to endure they are happy with where they are.

For example, if they choose to enter an old age home you will need to review all their accounts to see how realistic this is for them.

But, if their wish cannot be granted (due to finances), work with them to find an alternative (such as a personal support worker, or live-in caregiver) to makes them happy.

Ultimately, taking over your parent’s finances can be tough. But, with a strong financial plan, understanding, and respect, your whole family can achieve long-term financial success. For advice or a free consultation, call us today at 407-328-5001.

Image: Unsplash