Helping Your Aging Parents with Their Finances

One of the most difficult discussions for adult children to have with their aging parent(s) happens when it’s time for Mom and or Dad to hand over the car keys for safety reasons. More times than not, all parties don’t see eye to eye on the timing. Another equally awkward conversation between grown children and their elderly parents comes when it’s time to talk about the parents giving up control and management of the check book and their finances.

After more than 30 years of working with countless clients, I can tell you that most adult children are not comfortable bringing up the subject of finances and estate planning with their parents. I can also tell you that most seniors need a considerable amount of help getting their finances and estate plans organized, updated, and coordinated. The takeaway here is not to wait until there is a crisis at hand before addressing the subject.

The senior population has long been the target of financial con men and scammers. What may surprise many people is that a large percentage of the financial exploitation cases of seniors involve family members and people close to the senior victim. It’s not just crooked family members or evil scammers that many seniors need help looking out for. Banks and credit unions are happy to have and will say nothing to long time senior customers who have large sums of money sitting in a savings account earning close to zero percent interest on their accounts. Insurance companies also love their long-term senior customers who just keep renewing policies without ever reviewing coverage or shopping rates. That being said, it is my professional opinion that at some point by their late seventies, someone in addition to the aging senior should get involved in reviewing and maintaining the finances.

Here are a few red flags to look for that may indicate that your aging parent or loved one may need help managing and or safeguarding their finances.

·         Piles of unopened mail.

·         Unpaid bills and shutoff notices, or bills paid more than once.

·         Unusual purchases on bank or credit card statements.

·         Contributions to charities that your parents haven’t supported in the past.

·         Mail and phone solicitations that suggest your parents may have already been defrauded.

·         They continually ask the same question even though it has been answered several times.

·         They have A new friend or organization that they want to help out financially.

·         A new friend or relative is suddenly spending a lot of time with your parents.

Here is a partial list of the important documents and financial & estate information that should be located, organized, and maintained.

·         Estate planning documents (Wills, trust, durable power of attorney for finances and healthcare, healthcare directive, Living will, DNR(s).)

·         Birth certificate(s), marriage certificate(s), death certificate(s), divorce decree(s), Social security card(s), Medicare card(s), Military discharge papers and separation documents.

·         Copies of all real estate deeds and current property tax statements

·         Retirement and pension papers (survivor benefit information)

·         Recent statement for each and every bank account, investment account, IRA, etc.

·         Bank/CU Checks, debit cards, credit cards, mortgage/loan documents

·         Auto loans, auto lease agreement, auto title(s) and registration, insurance, etc.

·         Boat, RV, ATV, motorcycle, snowmobile, trailer, firearm, etc. title(s) and registrations.

·         All property & casualty, life insurance and annuities policies and recent statements.

·         Safe deposit box info and key. Check to see who can access the box after death.

·         Tax records (past 7 years)

·         A complete contact list of all service providers and professionals that they work with.

·         And more…

Here is a partial list of other important financial information that should be checked on and maintained over time.

·         Do all bank, credit union and investment accounts have named (pay on death) primary and secondary beneficiaries and are those beneficiary choices in alignment with and coordinated with the estate plan?

·         Are there joint accounts? Are those joint accounts in alignment with the estate plan?

·         Do all banks, credit unions and financial institutions have copies of the DPOA for finances, trust documents, etc. Do they require their own documents?

·         Do all life insurance policies have primary and secondary beneficiaries and are those beneficiary choices in alignment with and coordinated with the estate plan?

·         If there is a revocable living trust, is the trust properly funded?

·         What income is coming into the household? How? When?

·         What bills are due and when? Is there a detailed written budget for running the household?

·         Are there personal financial statements? (Personal balance sheet, cashflow statement)

Getting a person’s finances organized and properly coordinated with their estate plan is a big job and requires a significant investment of time and energy. A challenge for many family members is the fact that much of the work that needs to be done such as making calls to banks, credit unions, insurance companies, etc. must be done during the work week. With only so many paid days off and family commitments of their own, many adult children find it overwhelming to complete the project on their own.

A solution for many families, especially those who live out of town from their loved one is to hire a professional Daily Money Manager (DMM) to step in and take on or complete the job. Once everything is organized and coordinated the DMM can hand it back over to a family member to manage and maintain or at the family’s request the DMM can provide those on-going services as well. To locate a qualified DMM in your area you can visit the American Association of Daily Money Managers (AADM) website at www.aadmm . In the state of Michigan you can reach out to my firm at www.mmifinancialgroup.com .

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Todd W. Meyer is one of the principals at MMI Financial Group, Inc. He has 38 years of experience working with clients and personally heads the Daily Money Management & Financial Concierge Services department of the firm. Todd is an active member of the American Association of Daily Money Managers (AADMM). Todd can be contacted at todd@mmifinancialgroup.com

 

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