Stepping In to Help Your Elderly Loved One With Their Finances
Deuteronomy 5:16
“Honor your father and your mother, as the Lord your God commanded you, that your days may be long, and that it may go well with you in the land that the Lord your God is giving you.”
There has never been anyone more important in your life than your parents. They guided you through all your formative years, giving you the foundation and the sense of who you are and your place in the world. You are the person you are, and hold the values you cherish because of them. And now it’s time for you to help guide them through a time in their life when they need it. They may have reached a point in their life when they can no longer properly handle their own finances and need your help.
You May Notice Some of These Sign
If you have the opportunity, try to go through their accumulated mail. Be aware of letters from creditors. Or if you hear them getting calls from their bank about late loan repayments. Sometimes, with age, people can begin using poor judgment with their spending. Even though they may have been quite frugal when you were growing up, never buying themselves anything too fancy, you may notice they’re spending money now on frivolous or extravagant items. This can be a sign that you’ll have to step in. If you hear them complain about not having enough money for basics even though you know their budget and income are enough to cover those things. This could mean they may no longer be able to manage their personal finances like bank deposits or savings and retirement transfers.
Even something that seems unrelated, like a disorganized kitchen or closet from someone who always prided themselves on being organized, can be a red flag that their finances may also be in disarray.
What You Can Do to Help
You should, first and foremost, let your parent know that you’re on their side and want only what’s best for them. Denial about losing one’s ability to stay in control of their own finances is common, so don’t be surprised if they balk at your attempts to help. Ask the clergy at their regular place of worship for some help. These are people your parent probably already look to for guidance and are persons of trust. If you can enlist their help, it could make things go a lot easier for you. Ask your parent to let you have access to their credit report. This may feel like an invasion of privacy but assure them that you’ll also monitor it for them to be sure there haven’t been any identity theft attempts or errors. Then check it regularly or set up alerts for sudden drops in their score. A sharp decline in their credit score could be an alert to missed bills or forgotten payments.
Make a visit to their bank together and make yourself a signer on their account. Set up automatic deposits and bill pay and have alerts to overdrafts or spending increases over a certain dollar amount go to your email account. You may eventually need to have a power of attorney drawn up. Executing a power of attorney with your parent ensures you have the legal authority to make important decisions when your parents are unable to. An attorney specializing in elder law will be able to draft a power of attorney that fits your needs.
If Your Parent Is a Business Owner
If your parent is a business owner but is no longer able to properly manage or maintain it on their own, you have a few options. One, you can help them manage it as a partner. You can take over the entire operation of the business, giving your parent back a share of the profits and a limited say in the running of the business, or you can sell or close it.
First, get a professional valuation of the company. That will help you decide not only if it’s worth holding on to but how much you can expect to sell it if you go that route. Find out if the business is structured as Single-Member LLC or Multi-Member LLC. For a Single-Member LLC, the operating agreement should contain clear instructions and steps for transferring ownership of the company. For a Multi-Member LLC, the members remaining in the business may have to dissolve the company and then restructure it without your parent who is leaving.
In any case, you should speak to the company’s attorney since selling a business requires you to follow a lot of steps, and there are penalties if you miss any of them. IJN Ministries believes that through the Word of God, prayer, and faith, lives are transformed. They aim to equip, train, and develop others to live their best lives. Follow the podcast, too, as founder Reverend Antoinette Edmonds discusses topics surrounding faith and brings on special guests.
Having a conversation early with your parents can make things easier when the time to step in occurs. Monitor their credit report and look for signs that they may not be able to handle their finances as well as they once did. Take steps to take over or sell a business they may own by following every legal step. And hold on to your patience when they seem reluctant to accept help. Remember, they did the same for you.
Guest Contributor:
James Hall