How to Help Aging Parents With Their Money

As parents age, many adult children find themselves helping with money, whether paying bills, managing accounts, navigating Medicare, making decisions about care or watching for scams. Taking on this role can be emotional and challenging, especially when parents value their independence. A thoughtful, respectful approach can protect both your parents’ independence and their finances.

Start the conversation early

The best time to talk about finances is before an emergency, while your parents are healthy and able to share their wishes. Waiting until a crisis, such as a sudden illness or cognitive decline, can make conversations and decisions much harder.

Approach the conversation with respect, empathy and a focus on your parents’ wishes. Many older adults are understandably sensitive about losing control of their finances or independence. Frame the conversation around wanting to support them and honor their preferences.

You might say something like: I want to make sure I can help if you ever need me to. Can we talk about where things are and what you’d want? Starting with small topics, such as where important documents are kept, can make the conversation feel less overwhelming. It may take several conversations over time.

Include siblings and other family members as appropriate, so everyone understands the plan and potential conflicts are minimized.

Get organized

Help your parents create an organized record of their financial information, so you or another trusted person can step in if needed. Key information includes bank, retirement and investment accounts, along with how to access them; monthly bills and income sources, such as Social Security, pensions and retirement account withdrawals; insurance policies, including health, Medicare, long-term care, life and home insurance; a will, powers of attorney and health care directives, along with where originals are kept; and contacts for their attorney, financial adviser, accountant and doctors.

Store this information securely and make sure trusted people know where to find it. Digital tools or a simple binder can work well.

Legal tools to put in place

A durable financial power of attorney allows a trusted person, called an agent, to manage financial matters if a parent becomes unable to do so. Durable means it remains in effect even if the person becomes incapacitated. Without a power of attorney, family members may need to go through a court process, such as guardianship or conservatorship, to manage a parent’s finances, which can be expensive and time-consuming.

A health care power of attorney, sometimes called a health care proxy, lets a trusted person make medical decisions if a parent can’t. A living will or advance directive documents wishes about medical treatment.

An up-to-date will and, in some cases, a trust help ensure assets are distributed according to a parent’s wishes.

Banks may also let a parent add a trusted contact person to accounts. A trusted contact can be contacted by the bank or brokerage if there are concerns about possible fraud or the account holder’s well-being, but doesn’t have authority to make transactions. This can be a helpful safeguard.

An elder law or estate planning attorney can help parents create these documents.

Watch for scams and financial exploitation

Older adults are frequently targeted by scammers, and financial exploitation can also come from people they know. Common scams targeting older adults include government impostor scams, grandparent scams, tech support scams, romance scams, investment fraud and lottery or sweepstakes scams.

Warning signs include unusual withdrawals or transfers, new friends or acquaintances asking for money, unpaid bills despite adequate income, secrecy about finances, sudden changes to wills or beneficiaries, purchases of gift cards in large amounts and changes in behavior, such as anxiety about money.

Help protect your parents by discussing common scams, encouraging them to never share personal information with unsolicited callers, setting up account alerts and reviewing statements together if they’re comfortable.

Plan for care costs

Long-term care, such as in-home care, assisted living or nursing homes, can be very expensive. Medicare generally doesn’t cover long-term custodial care. Discuss how care might be paid for, such as through savings, long-term care insurance, home equity or Medicaid for those who qualify. Planning ahead can provide more options.

Take care of yourself

Caregiving can be stressful, time-consuming and expensive. Many adult children help parents financially while also supporting their own families. Talk with siblings about sharing responsibilities fairly, whether through time, money or specific tasks.

Look into local resources, like your Area Agency on Aging, which can connect you with services such as meal delivery, transportation, caregiver support and benefits counseling. The Eldercare Locator, a public service of the U.S. Administration on Aging, can help you find local resources. Protect your own financial security, including your retirement savings, while helping your parents.

Report elder fraud

If you suspect a parent has been a victim of fraud or financial exploitation, act quickly. The Department of Justice’s National Elder Fraud Hotline, 1-833-FRAUD-11, or 1-833-372-8311, can help with reporting suspected fraud against older adults. You can also contact local Adult Protective Services, the police and the parent’s bank.