Having a conversation about your parents’ finances can be uncomfortable and even difficult. Mom and Dad want to remain fully independent, including their financial freedom. What would happen, though, if you suddenly had to take over their finances? Would you feel prepared or equipped to handle the job if you never had a conversation about their finances with them?
Talking to your parents now can go a long way in preparing you for the day that you may find yourself managing your parents’ finances – if that day has not come already.
Whether you are planning ahead or currently find yourself in this position, our team at Uplands Village wants to help. As a life plan community in Pleasant Hill, Tennessee, we aim to provide individuals and families with the knowledge, resources, and care needed to promote healthy and safe living. We are sharing tips on approaching this conversation and steps you should take when managing your parents’ finances.
1. Know the Signs
While not every situation is black and white, some signs may signal it’s time for you to start taking a more active role in your parents’ finances. Noticing any of these signs could mean that now is the time to ask questions and start the conversation.
- They have unopened mail piling up,
- Your parent has been making unusual purchases,
- They are complaining about money more than they used to,
- They are becoming forgetful about cash,
- They are experiencing physical setbacks or mobility issues,
- Or you have noticed that they are experiencing trouble with their memory.
2. Promote Open Communication
Talking with your parents about their finances is not about invading their privacy or taking away their independence. Instead, it is about creating an opportunity for you to understand their financial status and how they want to spend their money. Ensuring your parents that you want to help and respect their wishes may make them feel more at ease with the situation.
Having this conversation as early as possible allows you to prepare and get things in order as well as gives your parents the time to share how they want to spend their finances.
3. Gather & Organize Important Documents
Another helpful tip is to locate all of their important documents and get them organized in one place. This will help you tremendously going forward. Whether you currently manage your parents’ finances or not, you should complete this step.
Some of these important documents could include:
- Bank statements,
- Any living wills or trusts,
- Insurance policies,
- Mortgage information,
- Social security payments,
- And safe deposit box information (if applicable).
4. Gain Access to Their Accounts
Banks, credit unions, and other financial organizations often have strict rules about who can access accounts and require specific paperwork before you are able to pay bills or make purchases from them.
After organizing your parents’ important documents, the next step would be to get access to their accounts. This step can require planning, so it will be much easier to get access to your parents’ bank accounts with their assistance.
This is an important step, but we encourage you to consult with a financial advisor or other professional before signing any paperwork or getting joint access to your parents’ accounts.
5. Consider Hiring a Financial Advisor
It can be overwhelming to step in and manage your parents’ finances. A lot of pressure comes with this responsibility, and even if you are good with money and have no problems managing your own, it is a much different job to manage somebody else’s finances. This is why it may be a good idea to hire professional help. By doing so, you can ensure that your parents’ finances are appropriately taken care of and that their preferences and wishes are being followed.
As uncomfortable as this topic may be, do not let it stop you from talking to your parents about it. As author Chris Bradford once said, “hope for the best, prepare for the worst.” Many individuals may never find themselves managing their parents’ finances, but if the time comes that you have to, you will know you have taken the steps needed to protect your parents’ finances and assets.
At Uplands Village, we have you and your parents’ best interest at heart. To learn more about the compassionate care offered at our life plan community in Pleasant Hill, Tennessee, we invite you to visit our website or contact a member of our team.