Age of responsibility
Helping older parents look after their finances requires respect and sensitivity
IT’S a funny thing when you realise your parents are old. It makes you reflect on their lives, as the responsibility of care shifts to you looking after them.
We’re talking about making sure they’re taken care of and in the best position to enjoy their golden years. Part of that is ensuring finances are in order.
Having gone through the process with both our parents, looking after an elderly parent’s finances and how to approach them can be a sensitive area.
HAVE THE TALK
The first step is to discuss the issue with your parents as early as possible. It can be uncomfortable as no parent wants to face the problems of old age or feel their children are putting them out to pasture.
Sit down with them, show respect and tell them you have some questions about their financial wellbeing … and to make sure they’re OK.
Emphasise that you’re not asking as a gold-digging child, but a family concerned about caring for them in the best possible way if problems occur.
The next step is to get all the key information together and details of anyone managing their affairs. If your parents are starting to forget information or lose track of things, ask to meet their bank manager, but make sure they make the introductions.
During the meeting ask to sign an authorisation that allows the banker to talk to you about their accounts. This means the bank can give an early warning if irregularities start to appear.
Check that they’re receiving the maximum government benefits they qualify for. Are they getting the age pension? Are they eligible for rent assistance or allowances for things like pharmaceuticals, utilities and phone bills?
Also find out if your parents have done an official will and where it’s located. Explain you don’t want to know what’s in it, just check that they’ve done one.
If they haven’t done a will or updated it in years, put them in touch with a lawyer or get them a do-it-yourself Will Kit.
APPOINT A POWER OF ATTORNEY
Once parents have suffered a stroke or moved into the advanced stages of Alzheimer’s disease, they may not be able to give you legal authority to act on their behalf.
So it is critical a power of attorney is arranged to enable a friend, relative or solicitor to take control of their finances when needed. It is not a pleasant thought, but one that must not be neglected.
A power of attorney can be limited to a designated piece of real estate or it can cover all financial transactions. Your parents don’t have to be incapacitated to need a power of attorney – they may just need someone to look after their affairs if they go away for an extended period.
WARN THEM OFF SCAMS
Elderly parents can be too trusting and confused by technology, so remind them never to pass bank details or passwords to anyone, beware of cyber crooks masquerading as bankers and not to do business with anyone they don’t know.
While it’s not an easy process to manage an elderly parent’s affairs, it is your responsibility to ensure they’re looked after, so approach it with respect and don’t leave it too late.