10 Ways to Prepare to Help Your Parents Manage Their Finances
These 10 actions can help open the lines of communication and determine where you can play a role.
It's common for aging parents to reach a point at which they need help with their personal finances, though they may not initially recognize it. Cognitive decline typically begins in our 60s and can be gradual—so gradual that until problems arise, it may not be obvious that their finances are in disarray.
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To help your parents avoid future issues with managing their finances, it's a good idea to start planning now.
Here are 10 ways you can prepare to help your parents manage their finances.
1. Start a Conversation
This is your parents' money you're talking about, after all, and if your goal is to make their later years simpler and less stressful, say that as you try to open the lines of communication about their finances. Asking questions about their long-term plans and what they've done to prepare for them will give you a better sense of how you can assist them.
However, your parents need to be ready to be transparent with you. "It's critically important for parents to share all of their financial information with their children so that an action plan can be put in place. It's very difficult, and perhaps detrimental, to implement strategies with half-truths or limited insights in information" says Ivan Watanabe, managing partner with Opus Private Client, LLC.
2. Review Their Records
To get a sense of where your parents are financially, and to be able to make informed suggestions going forward, ask if they will share their records and account information with you.
Knowing what they have, and where it is located, is a great start. Then, if problems arise, you'll at least know where to start looking for anything that may be missing or questionable.
3. Ask for Introductions to Their Advisors
If your parents have existing relationships with advisors, such as attorneys, accountants, brokers, and/or financial advisors, ask if you can meet them to better understand the services they're currently providing.
"It is always a good idea for the parent to introduce their adult children to their team of professionals, especially the financial advisor," says Arvind Ven, CEO and founder of the Capital V Group.