If you have decided to help your aging parents remain at home, you aren’t alone.
85% of adults want their parents to stay in their own homes for as long as possible. This puts a unique strain on their children; how do you juggle handling your family, raising your kids, and dealing with aging parents?
The costs alone can seem overwhelming, and it’s easy for finances to spin out of control quickly. This guide can help you when you are dealing with aging parents and helping them manage their finances.
What Is a Power of Attorney?
The first step in dealing with your parents’ finances is to choose a power of attorney. There are two types of “Power of Attorney.” They are:
Medical Power of Attorney: The person chosen to make medical decisions in the event someone is incapable of doing so, either physically or mentally.
General Power of Attorney: Also known as the financial power of attorney, this is someone chosen to make financial decisions for the person(s) they represent.
It’s important to understand that the general power of attorney is not the same as the medical power of attorney, and while they can be the same person, the functions need to be legally separated in documents.
Choosing your family’s general power of attorney will be a big first step in dealing with aging parents and potential financial complications and will legally put an end to sibling conflicts about how money is being spent.
Other ways to legally take over a loved one’s finances are through being named a designated trustee or a court appointed guardian.
Dealing with an Aging Parent’s Finances
Once a financial power of attorney is chosen, it’s time to gather all of their statements and documents, roll up your sleeves, and take control of their finances.
Identify their Spending Habits:
We don’t want to think about someone taking advantage of our parents in any way, but the truth is that one out of every five people over the age of 65 are victims of financial scams and frauds.
When you take over a parent’s finances, look through their bank statements, credit card statements, and checkbooks.
- Identify anything that seems off and mark it for further research
- Compare bills and bank account statements to make sure bills are being paid properly. Sometimes bills can be paid twice, sometimes not at all
- Make sure credit card charges are in keeping with what you would expect your parents to be buying
- Check for any recurring charges; there’s a good chance that these are for a service that your parents do not need and possibly didn’t realize they were authorizing
Warn Your Parents about Scams
When dealing with aging parents and their finances, you need to be aware of how many scams target the elderly and just how susceptible they are. Warn your parents about IRS scams, fake charities, and even fake funeral arrangement schemes.
Let them know it’s ok to hang up on anyone that makes them feel pressured or uncomfortable and to tell you immediately. To help protect them from potential scam phone calls, register their phones on the Do Not Call Registry.
Take Advantage of IRS Tax Credits
The IRS will give tax credits to the elderly and the disabled. This credit can range anywhere from $3750 to $7500, a big help when dealing with aging parents.
You, as a caregiver, can take advantage of a tax credit for taking care of an elderly parent as well as deductions for medical expenses and other tax breaks and exemptions.
Open a Joint Account
Opening a joint account is a great way to keep an eye on your parents’ spending while allowing them to keep their independence. Be very careful adding your name to a parent’s account, though; it’s possible that creditors can try to collect from both parties on the account.
Don’t get Frustrated; Get Help
Dealing with aging parents can be highly stressful. You may not have time to pay their bills, or you may just forget to do it. You can get resources for everything from bill paying to financial advice and even help to file insurance claims at the National Association of Area Agencies on Aging (N4A).
Choose a Flexible Caregiver
When you are looking to hire an agency to provide care in your parents’ home, make sure the agency is responsive and flexible to your needs. You may need someone to visit a few times a week to provide bathing or every day to administer medications and prepare meals.
The price you pay for your caregivers should change to reflect the level of care your parents need.
Step in for Contractor Repairs
Dealing with aging parents means dealing with home repairs and other contractor work.
Arrange to be with your parents when they meet contractors, and make sure you have copies of the estimate. Make it clear that you will be evaluating the work and making sure the contractor will not be making unauthorized charges or upgrades.
Stay Alert for Missing Funds or Bizarre Purchases
Even if you are not the financial power of attorney, you can still monitor your parents’ finances for things like missing funds, large or bizarre purchases, and things that generally do not make sense.
It’s perfectly acceptable to keep an eye on the general power of attorney to make sure he or she is properly managing funds for your parents and not misappropriating money for their own use.
Is it Time to get Help?
You have the best of intentions when you decide to provide care at home, but dealing with your aging parents can be very stressful. On top of worrying about them financially, you worry when you aren’t there to keep an eye on them.
Caregiver burnout is a very real concern for the children of elderly parents. If you are starting to experience burnout, it’s time to give the professionals a call and let them match your parents with the perfect caregiver. Contact us and see how we can help you today.
