When
you see these signs, don't wait to take action
by Rodney Brooks |April 18, 2019
Telling an elderly
parent that they need to stop driving and taking away their car keys is one of
the most difficult things adult children have to do.
But there is
something that can be even more difficult. At some point you may realize
that it’s time for you to take control of your parents’ finances.
“We deal with this
all the time,” says Dave Geibel, senior vice president and managing director at
Girard, King of Prussia, Pa. What makes it particularly difficult for Baby
Boomers, Geibel says, is that their parents, from the Greatest Generation, are
typically very private, particularly about their finances. “You have to balance
when is it too early or too late,” he says. “Some parents will be crabby and
difficult.”
Keep an eye out
Experts say you
should look for the following signs that your parents aren’t keeping up with
money responsibilities.
“Some of the obvious
signs are when you see them getting forgetful, misplacing items, or acting
different with finances,” says Kristian Finfrock, president of Retirement
Income Strategies in Madison, Wis. “You may see purchases they haven’t
historically made or repeated trips to the bank.”
Finfrock says one
client discovered her elderly mother was a victim of elder scam. By the time
she investigated her frequent trips to the bank, the client discovered that her
Mom had sent scammers more than $100,000. The Senate Special Committee on Aging estimates that the elderly
lose nearly $3 billion a year to financial scams.
Geibel had a client
with dementia who forgot to pay her long-term care insurance premium and lost
the coverage. “They had sent her five notices,” he said.
Have the conversation
“Every situation is
different,” says Christine Benz, director of personal finance at Morningstar.
“Children’s relationship with parents are so different. Feel them out to see
how comfortable they are with you getting involved. From there determine the
appropriate case of action.
“You may see
purchases they haven’t historically made or repeated trips to the bank.”
Kristian Finfrock,
president of Retirement Income Strategies
“In many cases the
catalyst for adult children getting involved is some sort of physical illness,”
says Benz. “Maybe a parents needs knee replacement. That will sideline them
from handling finances. In other cases, adult children may observe some
cognitive decline. It’s reasonable to ask if there are things going with
finances as well.”
Benz has first-hand
experience. “In my parents’ case we had perfect relationship. I work in
financial services. I lived two blocks from them. But, even with us we had
slipups. Mom had been main bill payer. When mom had a fall, I noticed a
supplement policy hadn’t been paid. She was struggling with taking care of my
dad who had dementia. Even in relationship where everything seems air tight.
There can be slippage.”
Get involved early on
Geibel says the
earlier you get involved, the better. “If you see behavior changes, might have
to get more aggressive,” he says.
“My advice is get
involved while your parents are still healthy, and you can have a rational
conversion,” he says. “If you wait until dementia or illness fits in, or your
dad dies and mom isn’t ready, it will be harder. Chip away at iceberg instead
of coming in with power of attorney.”
Even though the
financial planner’s fiduciary duty is to the client, they can play a role in
getting help with a client who is deteriorating mentally. In one case Geibel
was able to get the son involved when his mother was suffering with dementia.
Sometimes you have to
make tough decision,” he says. “You might have to get court involved. It will
save you in the long run.”
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