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QUESTION


Q: My aging parents are getting to the point where they don’t seem to be able to handle their personal finances. At what point should I step in? – Concerned Adult Child


ANSWER


A: Dear Concerned: This is a painful reality many children have had nightmares about and one day it comes true. If you find yourself in this situation, you may have no choice but to jump in. If you don’t, you parents may become victims of scammers who prey on the elderly.

Here’s a basic roadmap of how to tackle this issue.

  • If you have siblings, call them together for a family meeting and organize a plan.

  • The plan should have two prongs: long term and short term.

  • The long-term plan should be to assess your folks’ health and viability. For example, can they and should they stay in their own home? Do they need a caregiver part-time or full-time?

  • The more immediate plan is to create a plan to take care of their daily activities like pay mortgage and utility bills.

  • In some situations you may need a power of attorney for finances. Check with your family attorney. Go to your parents’ banks and other financial institutions to discuss their situation.

  • With your parents’ assistance, find all their accounts and personal financial documents. If in doubt, find their most recent tax return and look at Schedule B.

  • Start assembling the bills and start paying them. Get current on mortgage, credit cards, utilities, etc. Don’t be surprised if they are a month or two behind at first.

Also keep in mind these important principles:

  • Always act in your parents’ best interests. You are a fiduciary so do not allocate any funds except towards your parents’ needs. There can be no ‘borrowing’ of funds or any conflicts of interest.

  • Always be meticulous about managing our parents’ funds. Pay bills on time and invest wisely.

  • Never co-mingle your money and your parents’ money. Don’t create any joint account even if you think it’s convenient.