‘My siblings and I are concerned that our parents are being overwhelmed by charitable donation requests. They’re losing track of the groups they give to and how much they’ve already contributed, and it’s starting to impact their finances.’
‘Mom took over managing her finances after Dad died, and she’s been getting confused about how things work. She recently overdrew her checking account because she thought the bank would automatically transfer funds from her savings account to cover it.’
These are conversations I recently had with clients who are concerned about their parents, but not sure how to help.
It’s hard for many families to talk about finances to begin with, without all the emotional baggage that comes with the parent/child dynamic. Some parents are intensely private about what they have, how they spend their money, and uncomfortable with the idea of their adult children second-guessing their financial decisions. Then there’s the control issue. Along with driving, managing our own money launched our independence as young adults, and the thought of letting go of either privilege creates anxiety. Ideally, we’d like our parents to maintain their independence for as long as possible without putting themselves at risk, but what is the right way to do it?
One helpful book I’ve found for addressing the issues that arise with aging parents is With All Due Respect..Are Your Parents Driving You Crazy? Written by Dr. Joseph Ilardo, a clinical social worker, and Dr. Carole Rothman, a clinical psychologist, the title may sound dramatic, but it offers practical advice and a framework for finding solutions to the various dilemmas you may face – from medical issues to family feuds. I recommend using it as a resource for approaching difficult conversations and determining when you really must step into a situation.
I’m fortunate to have parents in their late 80’s who are healthy and enjoying their independence, but a few years ago they were victims of the ‘grandson in trouble’ scam. The experience left them feeling embarrassed and vulnerable, and a subsequent mix-up with Medicare premium payments finally led us to create our own set of solutions to help them feel more financially secure.
Streamline Charitable Giving
My parents were becoming overwhelmed by donation requests just like my client above, we discussed the issues that were important to them and the charitable organizations that supported those causes. We reviewed some on Charity Navigator, to help them decide which to support, and came up with a list of nonprofits to whom they now donate along with their college and church. We reached out to the other charities and asked them to take Mom and Dad off their mailing list.
Automate Bill Paying
Many older people pay their bills with paper checks, which can lead to late payments when the USPS is struggling with mail volume and other issues. We set up many of my parents’ regular, reoccurring expenses to be paid by credit card, allowing them to monitor their expenses on their monthly statements while earning cash back.
Set Up Alerts
To prevent an unpleasant surprise, I now receive alerts when my parents use their credit cards or there is a transaction in their bank account over a target level. This would have prevented their scam loss a few years ago, and it will hopefully help to reduce any potential issues in the future.
Passwords and Monitoring
Many of the organizations my parents depend on no longer wish to communicate by mail or phone, which are the methods they prefer. To be able to communicate on their behalf and receive notifications electronically, we set up account IDs and passwords on the respective websites to allow me to monitor the status of their accounts, get answers to their questions, and make requests on their behalf. This has provided significant peace of mind for them.
Computers, iPads and Phones
Dad signed on to his computer regularly but was still using Windows 7 software that was no longer supported by Microsoft and was vulnerable to hacking. We retired his computer and replaced it with an updated iPad he uses to access the web. We updated all their account passwords and purchased a new iPhone with more current software as well.
Financial POA
If your family member is beginning to show signs of dementia or has been diagnosed with Alzheimer’s or other disease that will impact their cognitive abilities, we recommend consulting an elder law attorney for advice and creating a financial power of attorney for their bank and brokerage accounts. Companies like Fidelity and Schwab have their own forms that need to be completed as well to allow a relative to have oversight of their account. We can provide a referral to an attorney if you need one.
All the changes described above may sound like a lot of daily monitoring on my part, but the number of transactions is low, and our system will allow them to remain in control of their finances much longer than they would otherwise. If you have questions about your family’s financial challenges caused by aging, please let us know how we can help.