Taking Care of Your Senior Loved One’s Finances
by guest author Janet Campbell
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If you have an aging parent or other loved one, pay attention to signs that they can no longer handle their finances. For example, suppose a loved one starts to lose focus. In that case, they may be starting to experience memory loss and may not remember important financial information on their own.
Read on for more suggestions on how you can help your loved one avoid economic mishaps.
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When It’s Time to Intervene
Recognizing when senior loved ones can no longer handle their finances may challenge you. Some early warning signs are:
- They find it hard to balance a checkbook or savings account.
- They make frequent mistakes on bills, such as paying twice or forgetting to pay altogether.
- They can’t keep track of who owes them money and whom they owe money to.
- They struggle to make a decision.
- They can’t prepare common household budgets.
This is Not Uncommon
Seniors with failing health or poor eyesight frequently make errors with their finances. The older we get, the more likely our memory will falter. Family Matters In-Home Care notes that older adults face a host of challenges, such as computer illiteracy, hearing and vision loss, mobility issues, depression, and dementia. If you’re experiencing this with your senior loved one, you are not alone.
Having “the Talk”
Your loved one’s finances can be tricky to discuss because you may not know how and when you should step in.
Begin early to get all the necessary forms before you need them. These include:
- Power of Attorney—ElderLawNet points out that a Durable POA will take effect once a person has become incapacitated.
- Living Will—As the Mayo Clinic explains, this legal document specifies your loved one’s requests for end-of-life care.
- Financial Information—This includes bank account numbers; credit card information; Social Security, 401k plans, and other retirement info; and long-term care insurance policy details.
If the Need to Move Becomes a Necessity
Senior care experts say that the first step is to look at your loved one’s finances and see what kind of investments they have. Figure out whether they can still meet their economic obligations, like living expenses and healthcare costs. If they can’t afford to stay in their home, you may want to sell the house and use those proceeds to fund their long-term care.
Note that before Medicaid pays for assisted living, they seize assets first, like money from the sale of a home. It’s best to contact an estate lawyer or attorney who specializes in the elderly to learn how to shelter assets so you can manage that equity to your loved one’s best advantage. You can use a home sale calculator to determine how much you can expect to receive if you sell the house or apartment.
If your loved one doesn’t have a pressing financial need to address, you may decide that their home may serve better as a rental. This allows you to preserve the dwelling as an asset while you generate income to help with your loved one’s expenses. Of course, you will need to consider your own time constraints. You may not have enough time to serve as a landlord while meeting all of your loved one’s needs.
The Rental Option
You might also consider finding your senior loved one a new accessible rental home or apartment with less maintenance. When scouting rentals, look for homes in neighborhoods with the amenities they need. View online listings to find properties in their price range to locate the perfect place.
Selling a Business
If your loved one is either a sole business owner or if they have partners, many of the steps involved will be the same, but others will vary, depending on if the business is a sole proprietorship, an LLC, or a multi-member LLC. In any case, you’ll need a complete valuation of the business, its assets, including real estate and inventory, and debts. You will want to access to all the company’s documents, like business tax returns, customer and vendor contracts, and building and equipment leases. You’ll also want to have an attorney help with the dissolution of a business, but you can save yourself a lot of billable hours by gathering as many documents as you can before the formal sale.
However, you may want to take on running the business yourself. If so, you might need to move the company. If you go this route, be sure to consult professional movers as early in the process as possible. Allow yourself as much time to plan as you can. Work closely with the movers and your employees to ensure a smooth transition. If you outsource many roles to remote work, employees will not need to move or be replaced.
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Taking care of our parents and other senior loved ones is an emotional roller coaster, and the financial considerations vary from person to person. If possible, speak up early and get all the relevant paperwork signed and documented, so that when you finally step in to help, you can do so with the respect and dignity your loved one deserves.
