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7 Ways to Help Ageing Parents with their Finances

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Discussing personal finances is never easy, and finding a way to ascertain your elderly parent's financial situation can be challenging. There are however, questions you can ask to help understand your parents' financial security without appearing too forceful.

There could be a number of reasons why older people may not have planned for their financial future; fear of confronting death, of losing control, or of family issues and conflicts. But simply sitting down and chatting, as well as offering your help can reassure them that they can have control over their finances and estate matters.

Before you initially broach the subject, here are some areas to consider discussing:

1. Be Respectful. Firstly, it's important to be sensitive and respectful of your parents' financial and emotional needs. Not having the ability to maintain their financial independence as they get older can be frustrating and disappointing.

2. Organise Essential Financial Documents. Establishing where important personal papers are located, and being able to access them is key to helping your parents with their finances. These include birth and marriage certificates, bank details, insurance policies, share certificates, and mortgage information.

3. Make Lists of Financial Activities. Make a list of your parents’ income and expenses, including whether they receive a monthly pension, investment income or other allowances, and any monthly expenses such as car and mortgage payments, credit card payments, utility bills, and other personal expenses. Also, list their bank and investment company information, including bank account numbers, investment accounts, stock and share certificates, as well as solicitor, accountant and financial adviser contact information.

4. Organise Estate Planning Documents. Find out if your parents have made a Will and whether it’s up-to-date, and where the originals and copies are located. If they don’t have a Last Will & Testament, work with them to create them. A Will is an essential estate planning tool to protect assets on death, and can avert huge problems for the family. If they die without making a Will (intestate), their assets (money, property, jewellery, etc) could go to the person they least wanted to have it, such as an ex-spouse, relative or the taxman.

5. Create Lasting Powers of Attorney. Granting someone a lasting power of attorney can allow aging parents to appoint a trustworthy individual to manage their financial affairs should they become disabled or incapacitated. A lasting power of attorney lets your parents choose someone to execute financial transactions on their behalf should they become incapacitated. It can be set-up to only take effect if a specified event occurs, such as dementia, an incapacitating illness, or the death of the spouse.

6. Involve a Financial Expert. If your parents’ financial situation is more complex than you or they can handle, it might be prudent in appointing a financial adviser, accountant or trust & estates solicitor. Whatever you decide, you can ensure their financial health, while maintaining your parents’ financial independence.

7. Look out for Red Flags. As you organise your parents’ financial records, keep an eye out for any suspicious activity on bank statements. Some red flags include incorrect or duplicate payments, unusually large purchases or charitable donations, high cash withdrawals, or high credit card debt. These red flags are indications that your parents may need assistance in managing their financial obligations.

The Best Time to Discuss Finances

The best time to discuss finances with your parents is when they are competent, self-sufficient adults. Planning ahead and seeking out the appropriate professional financial assistance on their behalf can help ensure your parents enter their retirement years in the most comfortable, stress-free and secure way possible.

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Disclaimer: The information provided in this site is not legal advice, but general information on legal issues commonly encountered. GlossLegal is not a law firm and is not a substitute for a solicitor or law firm. GlossLegal cannot provide legal advice. Please note that your access to and use of the GlossLegal website is subject to additional terms and conditions. GlossLegal is the trading name of Enterprisexchange Limited registered in England, United Kingdom under Company Number 3803556.