Tips For Helping Family Members With Finances

A frequent challenge is how to help older family members with their finances without taking away their autonomy or getting into a tug-of-war over the issue. Concerns often arise when visiting loved ones and finding that bills have not been paid, papers are in disorder, or even that utilities have been cut off. It’s not unusual to find family members defrauded by predators or going on a shopping spree on the Home Shopping Network.

All relationships are different. Some older adults freely share financial information with their loved ones and readily let them participate in bill paying and investment decisions. Others hold onto control as if their lives depended upon it—and well it might, to the extent that they would lose their identity along with their checkbook. They may even suspect their loved ones of wanting to take their money.

There’s no single answer for every situation. The following, however, are approaches that have worked for our clients in the past:

• Offer to help with bill paying. Permit the older adult to continue to control the checkbook, but schedule a monthly sit-down to go through all of the bills that have accumulated. The family member writes out the checks and the older person signs them.
• Use the Internet. With on-line access to accounts, you can monitor them. If unusual payments or transfers occur, actions can be taken, rather than waiting to review monthly statements.
• Segregate accounts. Leave the older adult in charge of the family checking account, but take control of investment accounts. This will leave only smaller amounts at risk, rather than the person’s entire estate.
• Make sure the older adult does estate planning while competent. Through properly-executed durable powers of attorney and revocable living trusts, loved ones can step in when needed.
• “Play” on family responsibility. While it is contrary to the traditional “parent-child relationships” for the child to handle the parent’s finances, it is consistent for the parent to take care of their child, no matter what their age. Explain the need to help with finances as a way to put the adult child’s mind at ease, rather than as a response to the parent’s increasing need for assistance. Stress that this is something the parent can do for the child, rather than the other way around.
• If all else fails, it may be necessary for the family member to seek court appointment as guardian or conservator over the older person’s finances. While this gives the guardian complete control, it removes the older person’s right to make any financial or legal decisions. This can be very difficult emotionally and financially because it involves legal costs, periodic reporting to the court and, in some instances, the necessity of seeking court approval for expenditures or estate and long-term care planning steps that could be carried out freely under a durable power of attorney or revocable living trust.

Just as there is no single answer for every family situation, it may be necessary to try various interventions to determine which one(s) works best.

This information is not to be considered legal advice. If you have questions about this blog, please contact us.