Signs Aging Parents May Need Help Managing Finances

I have recently seen a number of articles on the subject of aging and the related decline in financial judgment. Here is a well-written article on how to identify this, and ways to begin a discussion of this difficult subject.

From the article:

Research shows that financial decision-making peaks around age 53, and by age 60 our ability to process new information starts to slow. The shift happens at a different pace for everyone, and it can be accelerated by medical conditions such as Alzheimer's and dementia. While some people are capable of managing their own finances throughout their lifetime, others may find their skills suffering.

The impact could be as benign as paying a utility bill twice, or something worse, like falling prey to a scam.

Experts say there are signs that children or spouses can watch out for that will help them know when it's time to step in and help an older relative with their finances.

The article goes on share findings from a new study from the University of Alabama at Birmingham:

The study looked at up to seven years of financial skill performance among cognitively normal older adults. The warning signs of financial decline it found are:

— Taking longer to complete everyday financial tasks;

— Missing key details in financial documents;

— Having difficulty with everyday math;

— Showing decreased understanding of common financial concepts;

— Having difficulty identifying risks in an investment opportunity.

Finally, the author shares some great tips on how to prepare for this situation, with the key takeaway being the importance of being proactive (something we can all work on!).

When And How to Begin a Conversation about End of Life Planning with Older Parents

One question I hear often when I am speaking with groups of people is “How do I bring up the subject of my parents’ plans for the end of their life?” It is not an easy question, nor is the answer a simple one, as it depends on the willingness of one’s parents to even discuss such issues, and also on the relationship they have with their children.

No one likes to spend time contemplating his or her death. But there are ways to begin a series of conversations that might take place over many months, depending on their willingness to open up.

“Have you and Dad made any arrangements with a funeral home or cemetery? If you die, we want to know what your wishes are, and that you have written this down for us.” That can also lead into a discussion on the relative pros and cons of burial versus cremation, and related costs.

A less direct approach might be to raise it after they have been to a funeral of a good friend.  Parents often let their children know when a friend has passed away, as the children likely know that person well. It is a good opening to ask about the funeral, who spoke, was there a celebration of life afterwards, etc. This can easily lead to the questions of “Have you and Dad thought about what you want?”

If you are in your 40’s, and nothing has yet been said, try to start a conversation…“I know you guys are healthy, but just in case something were to happen that put you in the hospital, we need to know that you have made some arrangements.”

At some point as they age, and you are likely in your 50’s or even your 60’s, you will need more specific information. I think it is easier to address in stages, starting with knowing their medical history, prescriptions and doctors. Past the age of 60, the great majority of people have been given some indication that there could be a problem in the future, due to high blood pressure, cholesterol numbers outside the desired range, and perhaps even diagnosed with diabetes or some other cause for concern which will lead to problems down the road. You can start the conversation by asking if they have this information written down, in case you need to help them at some future point. If you volunteer to help them put this together in one place, they are even more likely to agree to do this, and then you would only need to ask to update this perhaps twice a year.

Talking about financials can be sensitive, and often parents are reluctant to discuss this with their children. Initially you can say, “We don’t need to know who advises you, what your assets are, etc., we just want to know that you have this information, and who to contact, in some document, in case one of us needs to step in to help you.”

This takes on more urgency if they are hospitalized or begin to have signs of early dementia.

Putting these plans in place is a process that takes place over time. In my own personal experience, once someone is diagnosed with a very serious health issue, they first think about updating their estate plans. You want to remind them that they also need to think about the plans that detail how they are honored and remembered when they die.

The Difficult, Delicate Untangling of Our Parents’ Financial Lives

Excerpt from a moving article in the Wall Street Journal: 

When my in-laws became too incapacitated to handle their own affairs, my wife and I took over. A year and a half later, we’re still trying to figure it all out.

By WILLIAM POWER
Updated March 27, 2016

“No, no, no, don’t transfer me to her again,” pleads my wife.
It is a typically frustrating moment in our family crisis, one that many grown children will have to face, ready or not: We are people in our 50s who are unraveling the finances of parents who can no longer do it themselves.

My wife, Julie, is on the phone with the company where her 82-year-old dad had once worked, trying to change the direct deposit of his pension checks to a bank closer to the assisted-living home where he and his wife now live, which is near us in Pennsylvania. Again and again, she is transferred to the person in charge, “Rose.” And every time, the same recording: “This number has been disconnected.”

In the room next to her, I see our once-usable sofa, covered with her parents’ financial papers from the 1960s to now. On the floor sit a metal tub and plastic cups of coins that we had hauled from the parents’ third-floor walk-up in Queens, New York—a small (but heavy) part of their lifetime of earning and saving, nearly all of it offline.

These are the kinds of elder-care issues that people talk about, but until you have lived it, you don’t truly realize all that is involved—not even someone like me who has spent decades as a financial reporter.” 

So begins William Power’s, and his wife Julia’s, long, exhausting, frustrating journey trying to help her aging parents handle their financial, medical and personal lives when her father is hospitalized. There is no central record of their various financial accounts, so it takes months to begin to piece this together, as her parents memories are vague. Virtually everything is on pieces of paper, with records going back to the early days of their marriage in the 60’s. Over many months, they wait for the mail to determine what bills her parents’ owe, and pore over the monthly credit cards, as many charges are on auto bill, for services her parents don’t remember signing up for. You can read the full article here.

With more than 10,000 Baby Boomers turning 70 every day, this is becoming a much more common occurrence. Which is why adult children of aging parents need to begin to have these discussions by the time their parents are in their 60’s, and don’t feel as threatened by this conversation. 

There are resources out there to help families. Don’t put it off. 

Talking to Your Parents About End of Life Planning

We've talked about how important it is to be a full partner with your partner, and we've offered some advice on when is the right time to discuss your end-of-life plans with your children.

Now for the flipside: How can adult children think about raising this topic with their parents? Here are some thoughts based on my own experience.