How and When to Step In With Managing Your Aged Parents’ Finances
A study published in The Journal of the American Geriatrics Society that found that financial capacity decreases with advancing age, especially for women. You may have noticed some signs your parents’ finances aren’t being managed properly by them, such as trouble doing basic tasks like balancing a checkbook, making lots of unnecessary or frivolous purchases, or not being able to cover their bills, it might be time to have a tough conversation. Here are some tips from MJ Housing & Services to help you through this difficult time.
Have the Conversation Early
When it comes to your aging parent's finances, you may feel caught in a tricky situation. If you take care of their finances for them and save them from the stress of having to manage their assets, they could be more willing and able to keep living at home. But, if your parents have different values or lifestyles that do not align with yours, this arrangement could lead to conflict. It is important that you discuss these differences with your parents early to be sure everyone is on the same page.
Where to Begin
Start gradually, like offering to help them balance their checkbook, or offering to set up automatic bill payments for them. Offer to set up direct deposits for things like retirement accounts or stock dividends. Ask to be a co-signer on their bank accounts so that in case of emergency, you can access their funds for them if they’re not able to. However, it’s important to keep your finances separate from theirs.
Arrange to have a power of attorney drawn up with them. According to Daily Caring, a durable POA is one that stays in effect if they become unable to handle matters or make decisions on their own. As your senior’s chosen representative, you could pay their bills, manage their investments, or direct their medical care.
When It’s Time to Sell Their Business
Make sure that before you sell your parents' small business, you’re being honest with yourself about what you understand their goals in life to be and how they feel about selling their company. If they have not been able to run their business because of health issues or other reasons, then it might be time to sell now. In many cases, selling their business will earn them a tidy sum of money and relieve some of their financial stressors.
Before selling, make sure to get a professional business valuation so you have an objective perspective on the business's value before it's sold. The valuation should include all your business assets, including all real estate and inventory.
If you’d like to learn more about the process, or you’re thinking about starting or running a business of your own, it could be helpful to pursue a degree in accounting. And if you take advantage of online programs, you’ll be able to learn at your own pace, without having to take time off to focus on your education.
When It’s Time for Assisted Living
Your parents won’t be able to live alone forever – and if they’re stubborn or difficult, it won’t be easy to convince them to change their lifestyle. That’s why it’s important to find a place that will feel like home to them. It’s also a good idea to investigate potential nursing facilities should that be required. This will make a potential transition easier if the time comes.
Make sure that wherever you help your parents move to, they have some say in it, that you’ve toured the place together, and that you talk to the staff and one or two of the residents or their families to get a sense of how comfortable everyone is with the place.
Coping with the difficulties associated with aging parents is never easy, but remember that by gaining some control over their finances, you’re helping them lead a less stressful and more financially stable future.
For more information about how we enhance the lives of seniors in affordable housing communities, visit MJ Housing & Services today!