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8 Steps to Managing an Elderly Persons’ Finances

May 9, 2023

As our loved ones age, it's common for them to need some assistance with managing their finances. Whether it's due to cognitive decline, physical limitations, or other factors, helping an elderly person manage their money requires careful planning and attention to detail. Here are some key things to consider when managing an elderly person's finances:

1. Establish legal authority: To manage someone else's finances, you need to have the legal authority to do so. This may involve obtaining power of attorney or guardianship depending on the situation. Consult with a lawyer to determine the best course of action for your specific circumstances.
2. Get organized: Gather all financial documents in one place, including bank statements, investment account information, bills, and insurance policies. Set up a filing system that makes it easy to access important information as needed.
3. Create a budget: Work with the elderly person to create a budget that covers all expenses and ensures that bills are paid on time. Make sure to factor in any regular medical expenses or other healthcare costs that may arise.
4. Monitor accounts: Keep a close eye on all bank and investment accounts to ensure that they are being properly managed. Set up automatic bill payments and alerts to notify you of any unusual activity or changes in account balances.
5. Consider long-term care options: As the elderly person's health needs change, they may require long-term care services such as in-home care or nursing home care. It's important to explore these options and discuss your family members’ wishes before they are needed.
6. Consult professionals: While you may have power of attorney for your elderly family member, it doesn’t mean you have to do everything yourself. Consulting an accountant, financial planner, and lawyer to help manage pieces of your family member’s finances can not only help you stay on top of things, but it can also protect you from errors or claims of mismanagement from other family members.
7. Avoid financial scams: Elderly people are often targeted by scammers who try to take advantage of their vulnerability. Educate the elderly person about common scams and encourage them to never give out personal information or money to anyone they don't know.
8. Communicate regularly: Keep the elderly person involved in the financial planning process as much as possible. Regularly review their finances with them and involve them in decision-making to the extent possible.

Managing an elderly person's finances can be a complex and challenging task, but with careful planning and attention to detail, it is possible to ensure that their financial needs are met and their assets are protected. By following these key considerations, you can help ensure that your loved one's finances are properly managed and that they have the financial security and peace of mind they deserve.

 

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