Managing someone else’s money — no less your parents’ finances — is nothing like managing your own. You don’t have all the information you need, and getting information from someone who may have memory problems may be especially tough. The hardest part, though, is the role reversal, says Linda Fodrini-Johnson, president of the National Association of Professional Geriatric Care Managers. Research shows that even in the early stages of Alzheimer’s, people have trouble with simple financial tasks — and they are more likely to become victims of fraud. If no one steps in, they might not have any money left by the time they reach the later stages of the disease. “You feel like you’re taking control away from them, but it’s the disease that’s doing that,” Fodrini-Johnson says. “You have to remind yourself that you’re securing your parents’ future.”
Parents are usually reluctant to share financial information with their children, let alone relinquish control, say financial planners and elder-law attorneys. Ideally, opening the dialogue about money should begin well before a parent needs help, says Greg Merlino, a financial planner and president of Ameriway Financial Services in Voorhees, N.J.
One way to start the conversation is by talking about your own situation: “Mom and Dad, I recently met with a lawyer to draft powers of attorney for financial and health situations so that my spouse can handle things if I’m ever in a situation in which I can’t.” Then ask your parents what protections they have in place. Or you can mention an article you’ve recently read (such as this one) about the importance of getting your parents’ personal-finance information in case they ever need help managing their money.
If your parents are receptive, find out where they keep lockbox keys and important documents, such as the deed to their home, tax returns, wills and powers of attorney. Get a list of their banks, doctors, accountant, attorney, mortgage company, financial planner and brokerage firm. If your parents are retired, ask where their income comes from (pension, Social Security and IRA withdrawals, for example).
Learn your parents’ medical history (such as any drug allergies and past surgeries) and what prescription drugs they take. And if they’re willing, get their Social Security numbers, as well as numbers for their bank and investment accounts and insurance policies. Find out who the beneficiaries are. Be sure to ask what their final wishes are and how they want funeral arrangements handled.
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