Three Strategies to Help Aging Parents Manage Their Finances

Sometimes it is obvious when older parents need help managing their money, but sometimes the warning signs are more subtle. It may be time for you to step in, or if your parents aren’t yet ready to cede control of their finances, the key is to start talking now. Here are three steps that could make the transition to managing your parents’ finances a little easier:

1. Begin the conversation early.

It is important to get a complete understanding of your parents’ income sources. Find out where they keep their money—bank accounts, brokerage accounts, 401(k)s, IRAs, etc. Get a handle on their debts and on all current and future income, such as Social Security, pensions and any guaranteed income. Ask where important financial and legal documents are stored, and get the names and contact information for their accountant, attorney and financial advisor if different than yours.

2. If your parents are not ready to give up control, make sure the trusted contact forms on all their financial accounts have been filled out.

Retirees are now a prime target for fraudsters and scammers. One safeguard: If a bank or investment company suspects an older client might be a victim of financial fraud, they can put a temporary hold on withdrawals and notify a trusted contact—usually a close relative—who can then reach out to the potential victim. This safeguard only works, however, if the client has filled out a trusted contact form.

3. Ask them to assign power of attorney (POA).

If your parents ask you to manage their finances—or even if they expect you to take over eventually—make sure they have filled out a power of attorney form. POA authorizes you to make financial and legal decisions on their behalf should they become unable to do so on their own.

River Wealth is here to help you through generational wealth transfers or planning for your legacy through charitable giving. Please reach out to your wealth advisor if you would like to start the conversation.