Taking Over Aging Parents' Finances

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Real Estate Agent with Realty Group Referrals 16766
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Taking Over Aging Parents' Finances

As our parents age, there is an almost inevitable probability that they will require assistance with financial or health issues.

One or both parents may become ill or incapacitated and unable to keep up with their financial affairs as their mental and physical abilities decline. This can mean that bills don't get paid or they get paid twice and checks bounce. Even worse, parents can become susceptible to scams and fraud. Children usually will have to step in and take over the management of their parents' finances, often during a crisis, and often with little knowledge of their parents' financial affairs. This can cause stress, not only to the parents who feel that their independence is suddenly being taken away, but also for the children who are now in the position of having to navigate through years of financial documents to ascertain exactly what the parents' assets, liabilities, income, and expenses are. Taking over parents' finances can be tricky business, both emotionally and financially for all involved.

The best way to avoid problems later on is to plan ahead. Planning ahead helps to ensure that parents' wishes are carried out, and it can eliminate potential conflicts among siblings about how mom and dad's finances will be managed and by whom. Children should have a frank discussion with parents about their assets, liabilities, income, and expenses around the time parents retire, if not earlier. The problem is that many people are private about their finances, so parents may be reluctant to discuss their finances with their children. While bringing up the subject of finances with parents can be awkward, it is an important and necessary conversation to have so children can better assist their parents later on. At the very least, parents should let their children know where the parents keep their important financial documents in case these documents are needed in an emergency. Ideally, parents should have an estate plan in place that includes powers of attorney or revocable living trusts that dictate who will manage their finances and under what circumstances. Additionally, parents should maintain updated lists of income and assets.

An article on Forbes.com offers a few practical suggestions for actions that children can assist their parents in taking now that will ease the burden and transition for children later, if and when the children need to step in and take over the management of their parents' finances:

-- Put regular transactions on autopilot. Have Social Security and other monthly checks deposited directly into bank accounts and have bills automatically debited.

-- Simplify where possible. Consolidate bank and brokerage accounts and request that financial service companies send duplicate paper statements to parents and children.

-- Have one child in charge. When children do take over, have only one child handle everyday finances and regularly inform the other siblings in writing of what is going on. Such communication can prevent tension and potential problems down the road.

-- Locate insurance policies. Insurance policies can easily be overlooked. Ensure that copies of all policies are easily accessible.

In taking over the management of a parent's finances, it is important that children respect their parents' rights and wishes. Children should allow parents to maintain as much control as possible. Parents should be kept involved as much as possible and informed of all actions that their children are taking on their behalf. Children should always keep their parents' money separate from their own. Starting the conversation about finances with a parent now will go a long way to help ease the transition of finances to a child later.

The attorneys at The Estate Planning & Elder Law Firm can assist clients with their estate, financial, insurance, long-term care, veterans' benefits, and special needs planning issues. 

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The Estate Planning & Elder Law Firm, P.C.

The Estate Planning & Elder Law Firm, P.C. is an elder law firm. We represent older persons, disabled persons, their families, and their advocates. The practice of elder law includes estate planning, estate and trust administration, powers of attorney, advance medical directives, titling of assets and designations of beneficiaries, guardianships, conservatorships, and public entitlements such as Medicaid, Medicare, Social Security, and SSI, disability planning, income tax planning and preparation, care management, and fiduciary services. For more information about The Estate Planning & Elder Law Firm, P.C., please visit our website at http://www.lifecareplanning.com.

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The Estate Planning & Elder Law Firm, P.C. encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to The Estate Planning & Elder Law Firm, P.C. If you are interested in a free subscription to the Elder Law News, then please e-mail us at office@lifecareplanning.com, telephone us at (703) 243-3200, or fax us at 703-841-9102.

This newsletter is not intended as a substitute for legal counsel. While every precaution has been taken to make this newsletter accurate, we assume no responsibility for errors, omissions, or damages resulting from the use of the information in this newsletter. The Estate Planning & Elder Law Firm, P.C. thanks the law firm of Oast & Hook for their input to this newsletter.

Copyright © 2006-12 by The Estate Planning & Elder Law Firm, P.C.

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Longwood Gardens Orchid Extravaganza IMG_4028

Photograph by Roy Kelley using a Canon PowerShot G11 camera.

Roy and Dolores Kelley Photographs

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Roy and Dolores Kelley Photographs

Roy Kelley and Associates

 

Roy Kelley, Associate Broker

Realty Group Referrals (Retired from RE/MAX Realty Group)

6 Montgomery Village Ave., Suite 200

Gaithersburg, MD 20879

Main Office:  301-258-7757 (You will not reach me at this number)

Send an email message if you need my phone numbers. I will be happy to recommend a real estate professional if you are moving to the area.

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Re-Blogged 1 time:

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  1. John McCormack, CRS 03/05/2012 10:51 PM
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Ambassador
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Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Roy- great information for all of us.  My mother-in-law planned and laid out everything for us even deciding on her own to enter a adult living community.  She didn't want someone to make the choice for her.  And I agree, having one child in charge of day to day matters is important. 

Feb 28, 2012 11:46 PM #1
Rainmaker
592,740
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

Good ideas. My parents are still active but are getting up there in years. Might be time to talk to them.

Thanks for the information and photo.

Feb 28, 2012 11:53 PM #2
Ambassador
1,497,536
John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Roy this is a very important and timely post.  Debbie is trying to assist her aging yet still independent parents who live 1300+ miles away.  She's on the phone numerous times daily checking in, asking questions, covering the financial and health bases.  She has conference calls when they are at their Doctors as they both are dealing with cancer and other health issues.  It's an ongoing battle and draining on Debbie.  It won't get better only worse but I will say this my wife will move Heaven and earth to take care of her aging parents.  Just makes me love her more!

Feb 28, 2012 11:56 PM #3
Ambassador
2,302,041
Belinda Spillman
Aspen Lane Real Estate Colorful Colorado - Aurora, CO
Colorado Living!

Roy,  My sister in law took over the finances for my husband's parents years ago.  It was a lot of work for her but she did a great job.  They both passed in 2010 - six months apart.  She knew where everything was and how to deal with all the finishing details. 

Feb 28, 2012 11:59 PM #4
Rainmaker
5,347,759
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much for your comments and personal experience.  Please share this information with your friends and family and encourage all to have their plans in place.  We have no children and that presents a different kind of problem when planning for senior years.

Longwood Gardens Orchid Extravaganza IMG_4041

Photograph by Roy Kelley using a Canon PowerShot G11 camera.

Roy and Dolores Kelley Photographs

Feb 29, 2012 12:23 AM #5
Rainmaker
519,398
Francine Viola
Coldwell Banker Evergreen Olympic Realty, Olympia WA - Olympia, WA
REALTOR®, In Tune with your Real Estate Needs

Excellent post. While families may not want to discuss these things as they are painful and emotional, having a plan will remove a lot of undue stress for both the parents and the adult kids.

Feb 29, 2012 01:23 AM #6
Rainmaker
2,520,392
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

This type of advice is so vital for those approaching that stage of life.  Planning ahead, before a crisis, can do much to alleviate any tension in the family, when the time actually arrives.

Feb 29, 2012 06:59 AM #7
Rainer
144,389
Victor Zuniga
Berkshire Hathaway Home Services California Properties - San Diego, CA

Hi Roy,

I agree that having one child in charge is a very good thing to do.

Feb 29, 2012 07:00 AM #8
Rainmaker
5,347,759
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thanks so much for your comments. I hope you are having an outstanding week.

Camellia, Longwood Gardens IMG_2137 A

Photograph by Roy Kelley using a Canon PowerShot G11 camera.

Roy and Dolores Kelley Photographs

Feb 29, 2012 07:21 AM #9
Rainmaker
929,022
Kwee Huset
Kwee Huset Realty - Venice, FL
Venice Florida Homes For Sale

Roy, it is a great information for senior and/or adult with aging parents, so that they may plan ahead before too late.  

Feb 29, 2012 10:44 AM #10
Rainmaker
5,347,759
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

I hope you are having an outstanding weekend. Dolores and I visited Longwood Gardens on Saturday.

Feb 21, 2016 03:38 AM #11
Rainmaker
5,347,759
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

We have some unusually cold weather in Maryland. Have a wonderful weekend.

Apr 09, 2016 05:49 AM #12
Rainmaker
5,347,759
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

One of the March, 2017, challenges to go back an update old blogs. I am in that process.

Mar 05, 2017 09:54 AM #14
Rainmaker
5,347,759
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

It is sometimes good to revisit old blogs and reblogs. We might even find some good ideas for new posts.

Mar 11, 2018 09:37 AM #15
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