Helping Parents with Their Finances Is Not An Easy Task

MP900448491The Social Security Administration reports that about 10,000 Baby Boomers will be retiring every day over the next 20 years, and as they move through retirement, they may need caregiving assistance. Many times, it's their adult children who must serve in this role.

The Des Moines Register's article, "How to assist your aging parents with their finances," points out another aspect of care giving: helping parents manage their finances. If that's the case, then be sure to do the following:

Understand your parents' overall goals. When assisting your parents with their finances, helping them to reach their goals should be your main objective. Talk to them and see whether they have financial goals above just covering their day-to-day expenses. It's important to understand what they want their money to do.

Have this conversation more than once. That's a biggie! The "getting-to-know-your-goals" talk shouldn't be a "set it and forget it" one-time conversation. Speak to your parents frequently about their goals. Their plans may change over time, especially after important life events, like the birth of a grandchild or the death of a loved one.

Know the sources of their income. If your parents have a regular income which is enough to pay their bills, then managing their assets may be just keeping track of what they already have and using the regular income to pay their monthly expenses. But if your parents don't have this regular income, then managing their assets will become more challenging.

Find all of the important legal documents. Before your parents can legally let you handle their financial matters, you need to be listed as their power of attorney. Without it, you may be in store for a lengthy court proceeding before being given permission to manage your parents' assets in the event they become incapacitated. If your parents want you to also handle their medical decisions if they become incapacitated, make sure they have health care directives in place as well.

Managing your parents' or any relative's finances can be extremely challenging. Talk with your estate planning attorney. He or she can help you make sure you have all the tools to do the job right.

Reference: Des Moines Register (November 24, 2015) "How to assist your aging parents with their finances"

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