April 2010 Transitioning Responsibility for Your Aging Parents’ FinancesConvincing senior parents to turn over management of their bank accounts can be more challenging than taking away their car keys As you may have already learned, convincing senior parents to turn over management of their bank accounts can be more challenging than taking away their car keys. After all, Mom and Dad have been role models on the importance of saving money and investing. Their repeated advice to you: Pay your bills as soon as they arrive, but check them for accuracy. Anything left over after you pay your living expenses goes into savings accounts or conservative investments. Red Flags. However, it is not uncommon for the children of elderly parents to begin seeing some serious red flags in their parents’ fiscal behavior, as they seem to no longer be living up to their own sage advice. The “every penny counts” mother mentions bounced checks and overdraft fees. Her electricity was shut off because she forgot to pay the bill for two months. A review of her checkbook shows that she mistakenly paid the same insurance bill twice. Or the historically frugal father has uncharacteristically paid $2,500 to sweepstakes entries over the last year and written six $100 checks to an unknown charity. Those are scary occurrences for adult children who can, for the first time, envision their parents making a devastating financial move and losing everything. Compromise. If you find yourself in such a situation, and your parents are reluctant to cede control, suggest starting with the “unofficial” role of financial monitor. That might involve a monthly review and/or reconciliation of the parent’s bank statement, and perhaps online account monitoring. Gradually, as your parent gets more comfortable with sharing control, you can move into the more official role of money manager. A more formal step is to enlist the help of an estate planning attorney to draft a Durable Financial Power of Attorney. This legal document allows a loved one to handle a person’s finances when he or she no longer can. It can be written to go into effect immediately or upon a doctor’s certification that the parent is incapacitated. Outside Help. Another solution for some families is to hire a licensed and bonded private fiduciary to pay the bills. There is also a growing body of professionals who help seniors without any family available to help, or whose loved ones are overwhelmed by the prospect of dealing with a senior’s financial problems. There is a variety of strategies in handling a senior parent’s finances. If you have ideas or good suggestions that have worked for you and your parents, please pass them along to us and we’ll compile them with others in an upcoming article.
Adapted from the Daily Plan-It newsletter Hoopes, Adams & Alexander, PLC, is a Chandler, Arizona, law firm offering services to Phoenix-area clients in the areas of estate planning, entity formation, commercial and real estate transactions, and civil litigation. | 
