Are you worried your elderly parents could be slipping when it comes to money?
Maybe Mom is moving funds from one bank account to another or told you the house phone was broken when service was actually shut off because no one paid the bill.
A person who may be beginning to exhibit symptoms of cognitive decline may not even realize he or she is unable to manage finances properly, according to a 2014 Center for Retirement Research at Boston College study.
How do you know when it's time to help with aging parents' finances?
"Use your gut, and if it doesn't feel right, investigate," says Christina Lesher, an elder law attorney in Houston.
Here are five signs that might signal your elderly parent is struggling with money management.
1. Stacks of mail
Piles of unopened mail might include unpaid utility bills, bank statements or other crucial correspondence. "If Mom was a meticulous bill payer and there are stacks of mail all over the place, that tells you there's a problem," Lesher says.
If your parent pays bills online, it's a good idea to gently talk to him or her if you have concerns about past-due payments.
2. Neighbor concerns
Your parents' neighbors might tell you, "There's something wrong with your dad." Pay attention. He may be doing things that signal dementia or other health issues.
3. Behavior changes
Look for changes in your parents' behavior. For example, if your mom buys a hundred boxes of laundry detergent or purchases dozens of items online that go unused, take note. Watch for out-of-character actions such as a typically frugal person buying an expensive car he or she doesn't need.
4. Strange comings and goings
Have neighbors told you that unfamiliar people are suddenly showing up at your parents' house? That stranger could be targeting your parent for a scam. According to Lesher, people often prey on older adults by taking advantage of cognitive impairment problems.
Of course, not every new person is a scammer and you won't (and shouldn't) necessarily be familiar with all aspects of your parents' lives. Respect your parents' privacy and independence as much as possible while keeping an eye out for anything unusual.
5. Asking to borrow money
When formerly financially self-sufficient parents ask you for a loan, it may be time to ask where their money is going.
Find a way to talk about money.
Once you determine your parents need help, it's time to strategize.
How you approach your parents is critical, says Doug Reuschel, a certified care manager and owner of Sundance Care Specialists in Houston. "For a lot of people, the checkbook or control of finances is the last thing they're willing to give up."
If you frequently talk about important matters with your parents, it could be easier to start a conversation about money. But if you suddenly start discussing money, you could be met with resistance, Reuschel says. Try to step into your parents' reality and empathize.
Reuschel's suggestions include:
- Listen. Elderly parents might be grieving the loss of a career or regretting things they'll never get to accomplish. Maybe your parents fear they'll outlive their savings or worry that you'll place them in a nursing home.
- Plan a family meeting. Consider inviting an outside professional, such as a social worker or care manager, to the conversation. That might ease what can be an awkward discussion. Make sure your parent is okay with having someone else present before you set up the meeting.
- Don't push too hard. If a parent is resistant, raise the subject of money in varying conversations, a snippet at a time. "Maybe just gently bring up an idea and let it settle a little a bit, and come back and talk about it later," Reuschel says.
How You Can Help
Hopefully, your parent already assigned you or a sibling as financial power of attorney years ago as part of estate planning and placed all important documents in a file, telling you where it's located. If not, and if your parents are willing, work with them to gather these items:
- Financial and health care power of attorney forms.
- Contacts for accountants, attorneys, financial advisers and bankers.
- Estate planning documents such as a will and trusts.
- Online account passwords.
"Ideally, have copies of everything at home and in a safe deposit box or fireproof safe," says Alex Menassa, a senior financial planner at Szarka Financial Planning & Investments in North Olmsted, Ohio.
The financial power of attorney document allows a designated person -- usually an adult child -- to make financial decisions on a parent's behalf. "Without that (power of attorney), it's a disaster," Menassa says.
If you see signs of poor money management with aging parents, it may be time to step in and offer to help. Remember to empathize with their situation as you work to talk through and help them safely manage their finances.
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