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Help Clients Assist Senior Parents with Money Matters

As life expectancies increase, helping senior parents manage their finances becomes more and more important to our clients. Having things arranged in advance can relieve stress for all parties involved.

A recent article in Investor’s Business Daily gives four tips for helping elders with money matters in order to give them peace of mind.

1.    Obtain authority and inventory assets

The first step for your clients is being named as their parent’s power of attorney for financial matters, giving them authorization to manage accounts and pay bills if mom or dad becomes incapacitated. Do this now, not later. Trying to obtain control after a parent becomes mentally or physically incapacitated can take weeks to months – and that’s precious time wasted.

Clients should help elderly parents create a detailed list of bank accounts, titled property, investments, and retirement accounts. The list should include the name of the institution holding the assets, the name of a contact person or service manager, account numbers, and any online login information that might be required.

It’s important that your clients collect this important information while their elder parents are able to assist with the process. Trying to get access to the data later is much more difficult.

2.    Add up the bills

It’s important for clients to know their senior parent’s recurrent expenses (i.e. monthly bills), including account numbers, due dates, estimated payment amounts, and to whom checks should be made.

We would add that in planning for these normal expenses, clients should also think about non-recurrent expenses as well. Recently, the Wall Street Journal discussed a study that helps clients estimate these sorts of less predictable expenses, ( most of which are centered on medical expenses.

These expenses can be tricky to calculate exactly, but estimates are possible. The article explains that for individuals ages 85 and older, the average and the 90th percentile of nursing-home expenses were $24,185 and $66,600, respectively, during a two-year period.

In addition, over half of people over age 65 needed in-home health care prior to death, and for those ages 85 and older, over half needed either short or long term care in a nursing home during their lifespan.

We recommend that clients consider and plan for worst-case scenarios to ensure financial peace of mind.

3.    Set up automatic payments and deposits

Once clients know what mom or dad’s expenses are, making arrangements for direct-deposits and automatic payments can simplify financial management. Taking care of elderly loved ones is difficult enough. Streamlining the process will relieve the financial strain and stress for all parties concerned.

4.    Make plans for end of life issues

Clients should help ensure that end of life plans are in place. Is mom or dad’s will up to date? Who has been named as power of attorney for health care decisions? Have they filled out an advanced directive specifying medical wishes? Have they completed a living will? Have they completed necessary forms to make their wishes known?

Some of these forms must be notarized, and clients should keep both digital and print versions so they can be produced when necessary. Our office is here to answer questions and create these documents.

Taking action now, rather than later, to help a client with their senior parents can make all the difference. If they do nothing: Utilities might go unpaid. Checks can be lost. Surviving spouses might not know how or where their deceased spouse managed their finances. Any of these issues can easily destroy their retirement planning.