If you have aging parents, how do you help them safeguard their life savings? Even if your parents are in good shape now, don’t think this won’t ever be a problem for you. Here’s a frightening fact. One out of two people age 85 or older have Alzheimer’s according to Investor’s Business Daily. That being said, it just makes sense to put safeguards in place now so that if the time comes when your parents can’t take of their own finances, the money will be secure.
In my experience, it makes a lot more sense to deal with this before it’s a problem rather than wait. That move could potentially save your loved ones from financial devastation down the line. Here’s how to dig your own defensive moat around your parent’s hard-earned treasure:
1. Track Spending
By far the most important step you can take is to monitor how your folks spend their loot. Put a budgeting program in place. Either do this for them or show them how to track their spending. Then, review this with them every month. This way, if they are blowing the cash on the Home Shopping Network or something equally dangerous, you can put a stop to it “muy pronto”.
2. Get Into The Huddle
Ask your mother and father to introduce you to their lawyer, accountant and financial advisor. Make sure you attend meetings with them. Find out about any outstanding issues or problems. Review their annual tax returns and make sure you understand it fully. The same goes with their investment statements. If you don’t understand the ying and yang of their monthly reports, go with your parents to meet the advisor and don’t leave until everything is crystal clear to you.
If you suspect that one of the professionals on your parent’s financial team is incompetent (or worse) get a second opinion.
3. Family Affair
The last thing you want is for one of your siblings or sibling’s spouses to feel threatened by your good intentions. But if you don’t communicate what you’re doing and why, that’s exactly what is likely to happen. They’ll fear that all you want is the coinage.
The solution? Invite them to participate and continue to reach out. Provide updates. Call your siblings and let them know what is going on. Ask for their ideas (unless they are complete morons or irresponsible jerks).
It’s sad that parents and children sometimes have to reverse roles – but sometimes that’s just the way it is. Rather than wait for this to happen, why not start putting safeguards in place now?
Are you involved in your parent’s financial planning? How? Do you wish you got involved earlier?