When to Take Away the Financial Keys

3 min read
September 13, 2016

If you find it difficult to talk to your parents about money and the day-to-day management of their finances, you aren’t alone. Imagine how difficult that same conversation will be while in the midst of a spiraling medical crisis? Besides dealing with their basic finances you also have to deal quickly with a health care proxy and getting a durable power of attorney in place.

This necessary conversation may not just apply to an aging parent – it could be a spouse or yourself whose welfare is at stake. There are intelligent financial moves you can make early on before a health crisis happens to you or your loved ones:

Recognizing When to Step In

When you live close by and see your parents frequently, the signs of weakened health and mental capability may be gradual or not very noticeable. If you live a distance away, consider asking a friend or relative to stop in periodically. Ask them to check on your parents and let you know how they think things are going. Staying in touch with regular phone calls or Skyping can provide you with some peace of mind and alert you to subtle changes.

Health care advocates and geriatric social workers can be hired for drop in visits as well. If available, services such as House Call Providers and Visiting Angels can also provide a sense of relief to distant family members who are unable to monitor a parent’s well being in person.

Have That Tough Conversation Right Away

Most parent-child financial discussions should start when the parent is around 70 years old. But the deterioration of physical, mental health or the death of a spouse or loved one at an earlier age can trigger that tough discussion, often under duress. Also the frequency of scams targeting seniors may result in a parent being taken advantage of financially without you knowing. The better plan is to begin talking now and continue to have ongoing conversations with your parents. This might avoid you having, out of necessity, to step in and take over handling money issues with little warning. Loss of control spirals emotions that lead to nonsensical conversations. By talking things through earlier the parent can have more say and feel in control.

Ways to broach the topic with your parents might include:

  • asking your parents what protections they currently have in place
  • suggest you help with one of their financial tasks, such as preparing their taxes or setting up automatic bill pay to simplify check writing regularly scheduled bills
  • express concerns you have

At the very least, communicating where various financial accounts are located, will be helpful. Ask them to put a list of where things are (keys, passwords, documents) and who should be contacted (CPA, lawyer, financial advisor) if needed.

Gather the Documentation and Store it In a Safe Place

One of the most time consuming things to do is to gather vital documentation in one place and then storing it securely. These documents include deeds, tax returns, wills, trusts and powers of attorney. But also essential are bank and investment accounts, insurance policies and credit cards. Ask where logins and passwords are stored so that if needed, you will be able to access the accounts. If your parents have an estate plan already set in place, find out where the documents are stored and who their attorney is.

Eventually you’ll want to gather information and contact details for your parents’ doctor, accountant, mortgage holder, financial planner or brokerage firm. If your parent is retired, you will want to know where their income streams come from such as pensions, Social Security and IRA withdrawals.

Consider helping your parents with getting free annual credit reports from AnnualCreditReport.com. The reports can help in monitoring for unusual activity or potential identity theft. The National Do Not Call Registry is free and by registering home and cell phone numbers, can provide additional safeguards against unsolicited calls from scammers that target seniors. States, such as Oregon, allow you/ your parent to sign up to receive email updates about current scams targeting seniors.

At least one family member should know where important papers are kept. A fireproof safe, an attorney’s office, a bank safe-deposit box or a secure virtual safe, such as Fidelity’s FidSafe, are all good options. Just be sure someone knows the access code, combination or password or is on the signature card for the safe deposit box and has a key. And remember: this isn’t a one time thing. Reviewing important documents should be done annually for everyone’s peace of mind.

This post originally appeared on Clarity Wealth Development.


Kay Dee ColeAbout the Author: This post originally appeared on Clarity Wealth Development. Kay Dee Cole, CFP®, Owner of Clarity Wealth Development in Corvallis, Oregon specializes in family financial plans and business retirement plans. If you’d like to learn more about Kay Dee, you can connect with her on Linkedin.