Giving up the check book is worse than giving up the car keys. We often hear children talking about their aging parents and how difficult it was to convince them to stop driving. But I believe that asking the parent to stop managing their money and trusting someone else to watch their assets is much more challenging.
Furthermore, many parents may have never discussed their financial situation with their children. They frankly don’t want their children to be aware of their financial holdings, and they certainly don’t want their children to worry about their parents running out of money.
What are some of the signs that a parent might be reaching the point where they need help, and what are some ways of making the transition go smoothly?
You might hear your parents making some of the following statements:
- I can’t remember if I paid the electric bill this month.
- I get so much junk mail and it is hard to tell if it is real or junk.
- How will my spouse handle the money when I am not able to do it or if I am not around?
- Your dad spends too much money – will he run out if I am not here to watch?
- When filling out a check, they comment on how poor their handwriting has become.
You might observe some of the following behaviors when you are visiting them in their home:
- Kitchen table or office desk piled high with mail.
- Much of the mail appears to be junk mail claiming they have won a prize.
- They are suddenly receiving more magazines and some of them are not in their field of interest.
- They ask you to fill in the check for them because they are having trouble seeing or writing.
- They lose their train of thought in the middle of paying a bill.
The most important part of transitioning the financial management of the household is developing a relationship with someone they can Trust! We recommend the following steps to prepare for a smooth transition.
- Hire a Personal Assistant Early. Before services are needed, engage a bookkeeper or personal assistant to begin tracking income and expenses. By recording the monthly cash transactions, the bookkeeper will become familiar with the bills that need to be paid each month and what income comes in each month. This also gives the couple an opportunity to get comfortable with someone else involved in tracking their spending. Finally, these reports will provide the added benefit of year-end tax reporting for the couple’s CPA or tax preparer.
- Retain Check Signing Authority. Do not permit the bookkeeper to having signing authority or online access to the parent’s bank account. The control should remain with the parents or with the Power of Attorney appointed by the parents – but should be a person other than the bookkeeper/personal assistant.
- Continue Reviewing Monthly Statements. Ask the bookkeeper to provide monthly reports of spending and continue to receive bank statements which should be reviewed by the parents or the Power of Attorney.
- Set Up Automatic Payments For Recurring Bills. For those regular bills such as utilities, car payments, mortgage payments, and telephone bills, work with the vendor to have the payments automatically deducted from the bank account each month. This prevents late fees and interest for missed or late payments.
The most important advice that I can give is to preserve the dignity of the senior by permitting them to continue directing the Personal Assistant in their financial matters. Doing things behind their back will raise suspicions and create acrimony in the family, so include the senior in the discussions and listen to their points of view.
Reba Rogers, CPA, is the founder of Secure Aging, a group of care managers who preserve the independence and protect the assets of seniors by helping them with financial management. She is also a Director Consultant for BNI (Business Network International), a referral marketing organization which gives her access to many trusted business professionals in the community.
