When is it time to take over a parent’s finances? The realization that parents can no longer be entrusted with their own finances often comes on the heels of the decision to take away the car. This is a very difficult issue because the parents of Baby Boomer kids are the “Greatest Generation.” As a general rule, they were and are extremely private about finances. The steps to take are outlined in this article, “Here’s how to know when it’s time to take control of your parent’s finances,” from Considerable.
The tricky part is figuring out the timing. If it is done too soon, you’ll be battling with your parents. Conversely, if it is done too late, major financial damage may be done.
Keep your eyes open for signs that your parents are not able to maintain their responsibilities. That includes changes in their behavior, misplacing things and not being able to locate them, or making too many trips to the bank for reasons that they can’t or won’t explain. Other clues that it may be time to take over a parent’s finances: purchasing things they never bought before, or paperwork piling up on a desk that used to be tidy and organized.
One adult daughter didn’t realize that her mother was being scammed until Mom had sent more than $100,000 to scammers. Elderly financial abuse is pervasive, and the Senate Special Committee on Aging estimates that elderly Americans lose some $3 billion annually to financial scammers – including family members!
One elderly woman, suffering from dementia, forgot to pay her long-term care insurance premiums and lost the coverage. The company had sent five notices, but she didn’t understand the importance of those notices. (Many insurance companies now request a back-up contact person who can be notified if a payment is missed).
Even children who have close relationships with their parents can miss the signs. Often, the children don’t step in until the parent has a health crisis, and, at that point it becomes clear that things have not been right for a while. If one parent is overwhelmed by taking care of his or her spouse, an otherwise organized parent may become prone to making mistakes.
The earlier children can become involved, the better. Children should ideally become involved with their parents while they are still healthy and able to communicate the necessary information about their financial lives. If the family waits until illness strikes or dementia becomes apparent, there may be significant and irreversible damage done to the parent’s finances. Sadly, even with well-drafted estate planning documents, a guardianship court may have to become involved if the parent is not willing to let the children help.
An elder law attorney will be able to help the family as they transition the parents away from being in charge of their own finances. It’s not always an easy process but sometimes it’s necessary.
Reference: Considerable (April 18, 2019) “Here’s how to know when it’s time to take control of your parent’s finances”
