It’s not a thought many of us want to entertain, because it’s hard and it’s an unflinching reminder of the terminal forwardness of life. Your parents will get old and they will need your help.

It’s a lucky thing, too, to have elderly parents – to be gifted with that time together. But it’s hard when the roles of parent and child begin to shift. It’s hard when adult children become caregivers to their parents. It can be difficult and awkward to navigate that transition.

I can’t state this strongly enough: don’t let that awkwardness prevent you from stepping in to assist your parents when the time is right. If you don’t intervene, others will - and they very likely won't have your parents' best interests in mind.

Why do you need to start thinking about this early? Because:

• Approximately 10,000 Americans turn 65 every day.
• More than five million Americans are currently living with Alzheimer's disease.
• One in 10 people aged 65 and older have Alzheimer's dementia.
• One in ten Americans over the age of 60 has been the victim of financial fraud or abuse.

Senior are at heightened risk of fraud

Every person is different, and knowing when to assume control of your elderly parents’ finances isn’t as simple as waiting until their 65th birthday. But it’s important to remember that criminals have always targeted seniors, and for good reason: it pays. Scams cost American seniors approximately $3 billion every year.

How can you tell if your loved ones are susceptible to fraud? A recent study found that seniors who felt “lonely, disconnected or ignored” were more likely to respond to scammers and be taken in by fraud.

Anyone, however, is susceptible to fraud. For any age, the best way to prevent fraud is awareness. The FBI maintains a list of the most common scams directed at seniors. Take the time to discuss safety and personal protection with your elderly loved ones and give them a fighting chance against fraud.

Watch for warning signs

It’s important to remember, though, that scammers aren’t the only threat to your parents’ financial wellbeing. Sometimes the biggest threat is your parents themselves.

These are just some of signs that your parents may be beginning to lose track of their finances:  

• Unopened mail begins to pile up in their house
• They become forgetful about cash
• They start getting lots of calls from creditors
• Their house is filled with expensive new purchases
• Their gambling increases in frequency and amount
• They complain often about not having enough money
• They have difficulty with simple tasks, like bill paying or balancing their checkbook

Even if you have no worries whatsoever about your parents' physical or mental health, it’s a good idea to familiarize yourself with their finances as they approach retirement age. The sooner you start to integrate yourself into that element of their lives, the more comfortable they’ll be including you in important decisions and the easier it will be to take full control when the time is right.

How to take control of your elderly parents' finances

Taking over control of your parents’ finances is complicated, but the longer you wait to become involved the harder it becomes to sort out all of their accounts and make the necessary legal steps to ensure your ability to successfully manage your parents’ money.

Account for all assets, liabilities, debts, and income

This can be a complicated process made all the more complicated if you wait until your parents are no longer able to help you sort out their finances. Use tax returns and credit reports to help piece together a complete picture of your parents’ financial infrastructure.

Evaluate and pay bills

If you waited until some of those warning signs started to pop up before becoming involved in your parents’ finances, this may not be a simple matter of setting up auto-payments. Many of your parents’ bills may be past due or even in collections. Worse, there’s the very real possibility that they’ve become overextended and don’t have the means necessary to pay all their bills.

You’ll need to evaluate all of your parents’ bills and then create a budget and a spending plan. Try to work directly with creditors to address any overdue or charged off accounts. If the debt is well beyond your parents’ ability to address, consider speaking to an attorney to see what your options are. If you need help putting together a feasible budget for your parents, consider speaking with a certified credit counselor – just be sure your parents attend the counseling session with you or have previously granted you Power of Attorney to handle their finances in their stead.

Get the proper authority 

You’ll find it much easier to get the access you need to put your parents’ finances back together if they’ve granted you Power of Attorney.

The Consumer Financial Protection Bureau (CFPB) has a series of helpful guides for those attempting to manage someone else’s funds. The guides cover powers of attorney, court-appointed guardians, trustees, and government fiduciaries. Be sure to take a look if you’re in the process of assuming control of someone else’s finances.

Document everything

Handling someone else’s money can be a minefield. Money, unfortunately, has a knack for driving a wedge in even the strongest families.

To head off the possibility of negative feelings or concern, be thorough and document every move you make with your parents’ money. The easier it is for you trace your transactions, the less likely it is that you’ll face hostility or second-guessing.

Stay involved

There’s no right way to take control of your parents’ finances, but waiting too long and doing nothing simply increases the chances that the people you love might fall into a financial tailspin they can’t recover from. Be proactive. Be patient. Mostly, just be involved. It makes an enormous difference.

Article provided by Money Management International. To learn more about MMI and how they can assist you with financial assistance FREE for members, visit offers.memcu.com/mmi