As the client services director at Lifecare Affordability Plan, Arvette M. Reid helps families bridge the gap between health care and finance. With more than 15 years experience in the senior housing and health care industry, Reid also experienced the aging health care system with her mother and now helps other families navigate the difficult emotional, familial, clinical and financial decisions that accompany aging.
Question: My mom’s getting older, and my sisters and I recognize we need to be more involved. What do we even need to be thinking about regarding financial matters? Where do we even start to make sure we’re setting everything up correctly as she ages?
Answer: This is a great question, and you’re doing the right thing by getting started early!
Below, I’ve outlined three tips for helping adult children assist their aging parents with organizing their finances. As an adult daughter who has been through this process with my parents and in-laws, I speak from both personal and professional experience.
1. Start gathering documents
While most people think of documents as the legal ones you get from an attorney, many other documents are very important from a financial perspective. As you begin to gather statements, create a folder. Every time something new comes in the mail, stick it in the folder. Examples of legal and financial documents include:
- Investment accounts
- Retirement accounts like an IRA, annuity or 401(k)
- Checking and savings accounts
- Loans associated with a home (mortgage or home equity line of credit)
- Car loans and other kinds of loans
- Will or trust, power of attorney, advanced directive
As you begin to gather statements, create a folder. Every time something new comes in the mail, stick it in the folder.
Let’s talk about monthly income for Mom. Mom may be receiving Social Security and pension income every month. That income may be from her working years, or she may receive survivor benefits from marriage. There may also be other forms of income like from a rental property. Another good place to start is Mom’s tax returns. Pull the last two years of tax returns because there can be helpful information.
Then let’s talk a bit about the expenses for Mom. To get ahold of all the different expenses that Mom has, create another folder and put all bills into it. Examples include utility, cable, food, phone and credit card bills, as well as costs for health, home and long-term care insurance.
Remember to keep at least two statements on a rolling basis so that at any point, if you need to talk to a financial advisor, you will have the latest statements ready to go.
2. Review the documents
Once the documents are gathered, it’s not enough to put them in a folder. You should review each statement to ensure it’s accurate. Are there any weird fees on her credit card and bank statements she’s not aware of? Paying attention to that allows you to get rid of unnecessary fees or subscriptions that she’s not using anymore.
Regarding the estate documents, like a will or a trust: When Mom reads it, is it still the wishes that she wants? Do they have the correct beneficiaries? Also, check the beneficiary listed for all financial or insurance accounts. So many families forget to do this step.
…check the beneficiary listed for all financial or insurance accounts. So many families forget to do this step.
To communicate this information more easily, start a family group chat or email chain for discussing these matters regularly so siblings living out of state don’t feel left out.
3. Treat Mom with dignity
Lastly, and the most important step, treat Mom with dignity. This is not the time for you to come in and take over. Instead, sit down with her and ask questions as you go through each document. Maybe you find out she owes $20,000 on a credit card. It’s not time for judgment; it is strictly data-gathering. This process may be overwhelming to her, so give Mom time to process and answer your questions. You want her to feel comfortable opening up and understand how going through this process of getting organized is good for the family, just in case something unexpected happens.
This process may be overwhelming to her, so give Mom time to process and answer your questions. You want her to feel comfortable opening up and understand how going through this process of getting organized is good for the family.
Take the time to ask her what she envisions as she ages. Does she want to stay in her house? What if something happens to her? Does it make sense for her to sell where she’s living now and downsize into something smaller? Try not to tell her what she should do. Let her talk it through, even if you disagree. For example, maybe she’s thought about moving to the local retirement community where her friends live, but she thinks it’s out of her price range. Now that you have all the finances organized, you should go take a tour and find out if it’s really an option for her or not.
When going through this process, remember to enlist trusted advisors from the senior housing, health care, legal and financial services industries to help guide “Team Mom” through the journey.