Many people worry about the ability of aging parents and other loved ones to handle money and financial affairs. Many older people need assistance because of:
When elderly people cannot handle daily finances or become more susceptible to financial abuse, the consequences can be severe. Older people who forget to pay bills could lose their home to foreclosure, get evicted from an apartment, risk utility shut-off, or damage their credit. Those who fall victim to scams might get cheated out of large amounts of money or lose their home.
This article discusses informal methods of assisting elder relatives with their financial affairs -- including figuring out what kind of help is needed, broaching the subject with your relative, and how you can provide assistance yourself.
Sometimes an older person needs a guardian or conservator to take control of finances and medical decisions. Guardians and conservators can be family members or other adults, but they must be appointed by the court. To learn more about these more formal methods of handling an elderly person's affairs, see Nolo's article Conservatorships and Adult Guardianships.
The first step in assisting your elderly parent or relative with money management is to determine if they need help -- and, if they do, how much help. Start by talking with your elderly relative. In some situations, the financial needs of the elderly are apparent. Some seniors may admit they need help and will welcome your assistance. Others will insist they can handle their affairs and so will resist intervention. If your relative falls into the latter category, but you see signs that assistance is necessary, do some investigating.
It is important to broach the subject of financial assistance with sensitivity. Many older people are embarrassed by their inability to handle their financial affairs. Others are afraid that by relinquishing control of money, they are losing a large measure of independence. Some believe that children or relatives want to steal their money.
Often, the best time to discuss finances for the elderly is before your elderly parent or relative needs help. Talk about what will happen if and when they need help managing finances, agree on some "trigger" events that might indicate they need help (for example, receiving account alerts), and come up with a plan as to how the two of you will work together if and when that time comes.
Explain your concerns about certain aspects of money management, and point out possible consequences if things remain as they are (such as foreclosure, closed accounts, or damaged credit). Involve your elderly relative in the decision-making process as much as possible. Keep the focus on what they can do and make suggestions only for those tasks that you feel they need help with. Most important, listen to what they have to say about the issue.
These conversations can be difficult and emotional for all parties involved. Before you dive in, consider getting guidance from an expert on elder issues. Your local Area Agency on Aging (AAA) can provide referrals for experts, workshops, or resources in your area. (To find your local AAA, visit the federal government's Eldercare Locator at www.eldercare.acl.gov.)
To learn more about the steps you can take to help manage an elderly family member's finances, see our article First Steps to Managing an Elder's Finances.