Family Matters: Talking to Your Senior Loved Ones About Finances

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It’s tax time again, even with a one-month extension this year, finances are top-of-mind for many of us. While your own finances may not be a favorite topic, it’s often even more uncomfortable to ask your parents, grandparents, or other senior loved ones about their finances. However, it is something that almost everyone must address with their elders. And, quite honestly, it’s one of those topics that is better addressed soon than later.

What can be most difficult is that even seniors who are still sharp as a tac in conversation and other mental skills may not be able to manage their own finances. Financial capacity is known to be one of the first to diminish as we age.

If your loved one is reluctant to share financial specifics, it’s important to at least have an understanding of and access to some documents. Perhaps the best way to bring up the subject is to let them know you don’t want them to be concerned about their wishes being followed even if they become incapacitated. You might start by talking to them about some of your own planning with regard to these important documents:

1) A power of attorney form. This allows you to step in and care for their finances should that become a necessity.

2) A health care proxy. This enables you to make critical medical decisions in the even they cannot do it for themselves.

3) A will. Even if there are verbal agreements for assets, a legally drawn-up will is essential to ensure the estate distribution runs smoothly and in the way they desire.

These important documents should not be kept in a safe deposit box in a bank but in a fire-proof safe in the home. Unless you are listed on their safe deposit box, you will not be able to gain access without these forms. If they’re inside the box you need access to, you can see the dilemma. If it’s too late for this, you can gain access to the safe deposit box by having a new power of attorney drafted, if your loved one is still competent to authorize it. Otherwise, you will need a court order to open the safe deposit box.

Making sure that these specific documents are lined up well ahead of time will ensure that you do not have to make a contentious trip to court to have them drafted. Should you be in a position where a court trip is necessary, hire an experienced elder law attorney as you will need to prove medical and/or physical incompetence, as well as the possibility of a judgment that your senior will require additional financial oversight over your own expenditures. An elder law attorney is uniquely qualified to guide you through this process. It is very expensive and time consuming and can be avoided simply by having the power of attorney form at hand.

As your loved one ages, they may ask you to step in with powers of attorney. This names a person who can act on your behalf.

  • Specific powers of attorney are limited to handling certain tasks, such as paying bills or handling retirement accounts, usually for a set amount of time.
  • General powers of attorney give your agent wide-ranging authority to handle all legal and financial matters. Specific and general powers of attorney can end authority when you become incapacitated.
  • Durable powers of attorney may be limited or give your agent general authority to handle all your legal/financial matters, but your agent keeps the authority even if you become physically or mentally incapacitated.

Rules vary by state and your needs may change over time, so it’s important to research and understand your options before creating a power of attorney.

There may come a time when you need to step in to handle your loved one’s larger financial investments. If all the information is not at hand and they are not able to point you in the right direction, a good place to start sleuthing is their tax returns.

Schedule B will list dividends and interest income, as well as the names of financial institutions. If your loved one worked with an accountant or financial advisor, they should be able to help.

Obviously, it is helpful if you are listed as a contact with their financial advisor or accountant and have the power of attorney document at hand. Many financial advisors will even ask to have a family member listed as a contact in the event that your loved one seems to be making unexpectedly rash or unstable decisions.

Click here to download a checklist of the documents that should be kept on hand at home in a fire-proof lock box.

Remember, companionship helps to keep seniors sharp, and Assisting Hands Home Care serving Cincinnati, OH can provide someone to help with practical needs and offer a listening ear. Give us a call to learn how we can help you take the stress out of caregiving.


Sources: ClearCare, AARP, Bankrate