Protecting your parents' finances: 6 steps to follow when managing their money

June 29, 2021

If your parents are getting older, they might need some help taking care of their finances. This checklist will help you get the process in motion when it’s time to take over.


As the people you love start getting older, they may need more help with managing their money. It’s important that their finances and estate stay in order, and to do so, you may need to take a leadership role. This may sound like a daunting process, but following clear-cut steps can help ease some of the stress on both you and your parents.


1. Start the financial planning discussion early

Start talking to your aging parents about how they want you to handle their finances if you ever have to take over. Have your parents give written consent for you to talk to their bankers and financial advisors so you don’t run into issues with privacy laws. They can also work with a lawyer to grant you power of attorney, which gives you authorization to manage your elderly parents’ assets and finances. Once written consent is given, it’s much easier to get access to the documents and information you’ll need. Talking about money with family can be emotional, so having an honest and candid conversation will show you care and help get everyone on the same page.


2. Be mindful of emotions

Thinking about your parents getting older and needing help with money can be just as distressing for them as it is for you. Bringing it up might be upsetting, but planning what you want to say ahead of time can help keep your discussion clear and compassionate. Remind them that having you assist with their finances can help them relax and enjoy their later years, instead of worrying about things like elder fraud or forgetting to pay bills on time. Remind them that just because you’re managing their finances, doesn’t mean you respect them any less or think they’re incapable of caring for themselves. From here, you can make a plan that works for them, and for you.


3. Gather information about your aging parents’ finances

Everyone’s finances will look a little different, but when you’re dealing with an elderly person’s financial history, there’s a lot keep track of. Account numbers, lines of credit, mortgages, liquid assets and retirement accounts are just some of the bases you’ll need to cover as you learn more about your parents’ financial standing. Work with your parents to figure out where everything is, and consolidate it. Get all of the physical documents together in one place, and work with their bank and financial advisor to get information on all their accounts. Take a look at the list of personal and financial information the National Institute of Health advises you gather to make sure you’ve covered all your bases.


4. Simplify elderly parents’ finances where you can

When you’re taking over someone’s finances, it’s important to take preventative measures to ensure bills are paid and deposits are made consistently. Work with a banker to switch any income streams, like a retirement fund, to direct deposit into their checking account. If paying bills is difficult for your parents to remember or manage on their own, automatic online bill pay can help ensure their bills are always covered.


5. Keep the financial planning conversation going

Whenever you change something in your aging parents’ finances, let them know. An open line of communication makes it easier to make informed decisions about the money you’re managing, and helps your elderly parents feel confident that they’re being well taken care of. As they continue to age, you might need to make big changes, like moving them to a care facility or selling unneeded assets like vehicles. Keep them in the loop and consider their input.


6. Ask for help protecting elderly parents’ finances

Managing someone else’s money on top of your own can be stressful and time-consuming, so don’t be afraid to work with a professional to keep everything streamlined and simple. That helper might be a financial advisor who knows your parents’ financial history well, or a banker that can keep you up to date on relevant changes to account balances. Even if your elderly parents’ finances are complicated, managing them doesn’t have to be.


Keep your parents' identity safe and prevent financial exploitation. Learn tips to help you recognize, react to and report common financial scams.

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