There's a certain irony in the parent/child relationship. When you're a helpless baby, you're dependent on your parents to do everything for you. As you get older, it becomes their job to teach you to become independent from them until you're ultimately on your own (and might even become a parent yourself).
Then comes that ironic moment when you have a total role reversal: You might need to help them take care of themselves -- until they reach a stage when they're totally dependent on you.
This is especially true when it comes to finances. Even if your parents have all their faculties, handling money and investments on a day-to-day basis may eventually become overwhelming. And if you wait until that moment occurs, it could be too late to help them out.
So when is the right time to take over your elderly parents' finances?
Image source: Getty Images.
Do your parents need help?
If you're lucky, your folks will recognize their capacities are diminishing and reach out to you for help. But most people have lots of pride, and asking for help doesn't come easily. In a recent survey by OnePoll, 45% of people interviewed admitted they're not good at asking for help with their finances.
And I'd bet that number would be higher if the age group was limited to the over-75 crowd because, well, it's just plain embarrassing to admit you can no longer handle these matters yourself.
Your parents may be in the early stages of Alzheimer's or another form of dementia, or may no longer have the wherewithal to handle finances themselves. But if they're not willing to be honest and up front about it, then it's your responsibility to look for the signs and respond in kind.
Looking for the signs
Some indications that they're no longer able to handle their finances may not be staring you in the face. For instance, when a close family member of mine was moving into assisted living, I discovered stacks of unopened mail hidden in garbage bags in the back of a closet. I was understandably shocked until I learned that this is a common action of people who are slowly being swallowed up by dementia.
Another sign is if your parents forget where they are or where they put things. It's normal to experience occasional forgetfulness. (I mean, who over the age of 50 hasn't walked into a room and forgotten why they did?) But if your parents ask the same questions time and time again, frequently get confused, or get lost in places they generally know well, these are signals you need to get more involved -- especially with their finances.
Watch out for elder financial abuse
Unfortunately, according to the National Institutes of Health, older adults are disproportionately targeted by criminals trying to take advantage of them financially. And if your parents are exhibiting some of the above symptoms, they're more likely to become victims of elder financial fraud.
Sometimes, it's as simple as they're entering sweepstakes -- a lot. Or they can be deceived by phone solicitors promising large amounts of money if they send them cash. Or perhaps the most sinister plot of all: Your parents receive an email from a "grandchild" claiming to have lost a wallet in a foreign country and could they please send cash ASAP. What loving grandparent wouldn't want to help out?
Don't brush off these issues thinking it could never happen to your parents. According to the FBI:
With the elderly population growing and seniors racking up more than $3 billion in losses annually, elder fraud has remained a growing problem ... . Seniors are often targeted because they tend to be trusting and polite. They also usually have financial savings, own a home, and have good credit -- all of which make them attractive to scammers.
How to take control of your parents' finances
If you're thinking it may be time for you to get involved, start slowly. Perhaps offer help with balancing their checkbook and paying bills, to take that burden off their shoulders. Not only will that help them out, but it will also give you a bird's-eye view of all the money that's coming in and going out.
Talk to them about your concerns. If they're amenable to your assistance, it's time to get down to it. First, make a list of all their accounts, including checking and savings, credit cards, mortgage or car payments, stock brokerages, and the like. Then make a list of their income sources. This way, you'll be able to balance what's going out with what's coming in.
It's also a good idea to have copies of their insurance policies, wills, estate plans, power of attorney, etc. You'll then have all these documents at your fingertips should the need arise. And while you're at it, get a list of pertinent usernames and passwords.
It's better to do all this while your parents are still functioning at a reasonable level. Be sensitive when you talk with them, and always ask permission before you stick your nose into their business.
They nurtured you for all those years, so it's only reasonable that you take the time to nurture them in their senior years. It may be ironic, but it's also a loving part of the circle of life.
