5 Tips for Helping Loved Ones Manage Their Finances
By Amy Goyer. Amy Goyer is a paid spokesperson for HEALTHY ESSENTIALS®
When my Dad was in the early stages of Alzheimer’s disease, I noticed him becoming very stressed when dealing with financial matters. I found many stacks of paperwork with sticky notes saying, “Ask Amy.” Clearly, he needed some help. So, my sister and I began helping him sort mail, prioritize, file and make decisions. Over time I gradually took over managing all of his and our mom’s finances (she had a stroke many years earlier). We were lucky that he was very happy to have the help – but it has remained a major, time-consuming and sometimes complicated part of what I do as a caregiver.
Here’s what I’ve learned along the way:
No. 1: Watch for these signs that your loved one may need help with finances.
- Unopened mail or unfinished paperwork piling up
- Unpaid or overpaid bills
- Unusual spending patterns and mounting debt
- Repeatedly falling victim to scams
- Unusual stress or confusion about how to handle routine or complicated financial matters
- Inability to navigate financial systems, such as accessing customer service, paying bills in the manner they have been doing, or using online services
No. 2: Understand what you are legally able to do.
You may begin helping more informally with financial matters – talking about options, helping to interpret paperwork, making phone calls or writing letters. But eventually you may need to create a formal legal arrangement to be able to make business, legal, property and financial decisions for them.
Find out if your loved ones have already set up a power of attorney for finances. If they have not, and they are of sound mind, help them set one up. It’s a good idea to involve an objective third party if you are to have power of attorney, so no other family members have concerns. An elder law attorney can help you choose the type of agreement (such as limited, springing or durable), when it begins and ends, whether or not your loved ones have to be declared incompetent, and who is designated to serve as the “agent” or “attorney in fact” and which financial matters are covered.
If you have the power of attorney, you are legally required to take actions that are in the best interest of your loved ones. You may become a co-signer, joint owner or trustee of some of your loved one’s bank accounts, credit cards, loans or investments. Be sure to ask if you are taking on any liabilities if you do so. Also ask if a digital power of attorney should be created so that you can handle loved ones’ online accounts.
There are some cases in which a power of attorney will not be accepted. For example, the Social Security Administration has its own “representative payee” designation you might have to obtain. Some banks or investment companies may require your loved ones to sign their own power of attorney documents even if you already have one in place.
No. 3: Get Organized
- Gather account information, payment due dates and amounts, terms, interest rates etc., from all financial accounts, such as:
- Income and/or financial assistance, such as pensions, retirement plans, savings, investments, benefits, Social Security, Veterans benefits, disability, temporary assistance for needy families, food stamps (SNAP), Supplemental Security Income (SSI).
- Assets information, including properties, vehicles, investments, jewelry, artwork and other valuables
- Debts, including credit cards and loans.
- Health insurance, such as Medicare, Medicaid, supplemental policies, retiree policies, etc.
- Other insurance policies, including home owners, renters, car, or boat.
- Titles to properties and vehicles.
- Tax Information, including location of previous tax records, who prepared them, any tax information that has been collected to date for the current tax year, taxes currently owed, any tax payment plans.
- Safe-deposit box contents, including important documents and valuables.
If your loved one has an accountant, financial manager or advisor, inform them of your role. Create a budget and a method for tracking your loved ones’ debt and income, keeping in mind their care plan and goals, potential need for increased care and services.
Set up both digital and paper filing systems, and be sure to keep your finances separate from your loved ones’, and make detailed, accurate records of all of your actions on your loved ones’ behalf, including decisions, changes, applications, payments, transactions and allocations.
No. 4: Get help from professionals.
Your loved ones finances may include complicated matters you haven’t dealt with before, and may not have adequate time to deal with the day-to-day financial management. Get help from qualified, credentialed professionals. Research their track records, check with the better business bureau for complaints and ask for references. You might find help from:
- Financial planners, money managers, accountants, debt counselors or brokers who can provide periodic consultation or manage day-to-day financial matters, such as paying bills, balancing checkbooks, managing debt or handling insurance matters
- Local service organizations that help with tax preparation
- Lawyers who can help navigate complicated legal aspects
- Geriatric care managers or ‘aging life care specialists’ who can help find local assistance, sort mail, file papers and monitor other professionals whom you hire
- Your local area agency on aging, which may have a list of local agencies that can help
No. 5: Be aware of and sensitive to your loved ones’ concerns.
Be compassionate if you meet with resistance, sadness, pessimism or confusion from those you’re trying to help. Your loved ones have handled their complex affairs for many years, and it’s understandable that they may not want to let go. They may also feel that they’ve failed if they can no longer manage these concerns. Assure them that you are there to help, not to take over their lives.
Many families don’t discuss finances so it can be challenging to bring up the subject and make changes. If your loved ones are able to understand, make sure they have the opportunity to discuss options and make decisions, even if you carry them out. When my Dad needed me to take over paying the bills and managing more complicated financial matters, we opened a separate checking account with a debit card he could use for everyday expenses. That helped him feel more secure, better equipped, in control, and more empowered. You can find ways to involve your loved ones yet ease their burden and help them stay financially on track.
Amy Goyer is a caregiving expert with over 35 years of experience advocating for and caring for older adults. She has also been a family caregiver her entire adult life and is currently caregiving for her 94-year-old father who has Alzheimer's and lives with her. She is a paid spokesperson for HEALTHY ESSENTIALS®.