Having Difficult Conversations with an Aging Parent

If your aging parent is having trouble managing their money, they’ll need your help. Here’s how to approach the subject with care.

Is It Time to Help?

Did your father forget to pay his utility bill? Does your mother have a big stack of unopened mail on her kitchen counter? Did someone send your uncle a check that never got cashed? These may be signs that your aging loved one needs some help managing their money.
 
Before you can do that, you’ll need to sit down and have an honest, detailed conversation with them about their day-to-day finances.

Get the Conversation Started

The idea of talking to an older parent or other relative about their finances might make you a bit nervous. Your loved one, after all, likely values their independence. But it’s best to start the conversation now, before there’s a crisis. If you’re thoughtful in your approach, you can get past the initial awkwardness and find solutions that will make everyone feel better.
 
First, choose a date and time when you can focus without distractions. Having your initial conversation in the midst of a family holiday celebration, for example, probably won’t be productive. Give your loved one – and any other family who will be involved – plenty of notice, so they arrive prepared.
 
Assure your older parent or relative that, while you want to help safeguard their ongoing financial security, they’re still in control of their money. Tell them that you care and want to work together to understand their finances so you can best support them.

Begin Slowly

Don’t take on too much right away. You won’t be able to organize an older person’s entire financial life in one conversation. Instead, plan to have several discussions over time.
 
Start by asking about their goals, which will help guide you moving forward. Be sure to take notes whenever you have chats about finances.
 
Ask where your loved one needs the most help and start there. Are they struggling to pay bills on time? It might make sense to set up automatic payments. Are they having trouble making investment decisions? Perhaps you can offer guidance, along with the help of their financial advisor.

Scam Savvy

Alert your older parent to scams. Advise them, for example, never to share their social security number or other personal information when someone they don’t know reaches out by phone or email.

Get the Full Financial Picture

It’s important to wrap your head around your loved one’s finances. So sit down with them to identify the various pieces of their financial life. Start by locating bank statements and tax returns, which can provide valuable information.
 
List sources of income such as:

• savings and checking accounts
• certificates of deposit
• Social Security benefits
• pension funds
• investment accounts (stock, bonds, mutual funds)
• retirement funds (IRAs, Roth IRAs, 401k plans, profit-sharing plans)
• rental income

List debts such as:

• mortgages
• property taxes
• credit card debt
• car loans
• personal loans

Collect related financial documents and set up a system – either digital or in physical folders – to keep things organized. That includes your loved one’s estate plan, which should list their financial power of attorney, the person who they’ve chosen to make financial decisions on their behalf if they become unable to do so.

Assess and Make a Plan

Now with your loved one’s financial information in hand, you’re ready to craft a plan. Here are some steps to help get you started:

• Sit down with your loved one to review their income and monthly expenses. Then make any necessary adjustments. Are they subscribing to a streaming service that they no longer need? Go ahead and cancel it. Did you notice an unusual transaction on their bank statement? If they don’t recognize it, contact their financial institution. Reviewing everything at once may be overwhelming for your loved one. If that’s the case, take breaks or have several shorter sessions.
• Streamline financial tasks (to make life easier for both of you). Consider setting up automatic payments for regular bills. For income sources like Social Security payments, pensions and retirement account dividends, set up direct deposit into their bank account. Be sure to involve your loved one in the decision making every step of the way.
• Consider asking your older parent or relative to add you to their checking or savings account as an authorized signer. They’ll still be the owner of the account, but you’ll be able to write checks and make deposits when needed. If you pay bills or make other transactions on their behalf, be sure to document it to keep your loved one in the loop.
• Meet with your parent or relative’s financial advisor together, so you can better understand their investments. Again, make sure to take notes during the conversation.
• If your loved one doesn’t have a durable financial power of attorney, ask them to set one up. This document gives you (or someone else they trust), called the “agent,” legal authority to manage financial tasks on their behalf if they become incapacitated.

Prepare to Take on More Responsibility

Over time, your loved one’s needs may change, so be prepared to pivot. If he or she develops dementia or Alzheimer’s, or otherwise becomes unable to make sound financial decisions, it’s likely time for you (and maybe other family members) to take on more responsibility.
 
If the person has a durable financial power of attorney, their trusted “agent” can begin making financial decisions for them. If they didn’t sign a durable power of attorney before they became incapacitated, a judge will name someone to manage their finances.
 
Their agent can take steps to prevent trouble, such as reducing the spending limit on the person’s credit cards. Your loved one’s financial advisor can provide further guidance.
 

 

 
Sources:
 
Elder Care Alliance, “How to Take Over Your Parent’s Finances,” published January 18, 2024
 
Kiplinger, “11 Tips for Talking to Your Aging Parents About Their Finances and Future Care,” published May 2, 2024
 
Nolo, “First Steps to Managing an Elder’s Finances,” published May 23, 2024
 
UDS Foundation, “Navigating the Process of Taking Over the Finances of Aging Parents,” published August 14, 2024
 
AARP, “10 Steps to Help You Manage a Loved One’s Money,” published August 12, 2024
 
Nolo, “The Durable Power of Attorney: Health Care and Finances,” published October 7, 2024
 
National Institute on Aging, “Managing Money Problems for People with Dementia,” accessed November 21, 2024
 

 
This article was created in accordance with the Patelco editorial policy.