A concern for many adult children with an aging parent is whether or not they can still handle money and make sound choices regarding their financial affairs. There are many reasons why an elderly parent would have trouble handling their own finances, usually due to some physical or mental ailment or the loss of a spouse who normally handled the finances, though there are other times when the parent just decides they would rather have someone else handle financial decisions, so they may focus on other things.
The consequences of an elderly parent facing financial trouble can range from inconvenient, like having the utilities shut off for non-payment, to dangerous, like losing a home or apartment due to unpaid mortgage, taxes, or rent.
Perhaps the most daunting aspect of this whole matter is speaking with your parent about their finances. Many will insist they can still do everything they did when they were younger, as they fear a loss of independence or feeling like they are no longer in total control of their own lives. This is why it’s important to have a plan in place before your parent even needs help. Speak with them while they’re still in control of their finances to let them know you’re thinking of the future and want to help and try to determine together the best way to avoid financial difficulties. This is usually the point where an experienced LA County elder law attorney can help.
Oftentimes, the elder law attorney will suggest setting up a trust that names an adult child as a successor trustee in conjunction with a Power of Attorney as a way for the adult child to assist with the finances. These documents give the adult child the authority to make financial decisions for trust funds and all other solely-owned assets, while also providing a level of fiduciary responsibility that must be followed. This added responsibility may ease your parent’s mind of any concerns they have that their money will be used improperly, since there are legal consequences if that were to happen.
If you would like to learn more about the best way to help your elderly parent manage money, or if your parent is currently having financial problems and you’d like to explore solutions for helping them, please set up an appointment at our Los Angeles County elder law office by calling (818) 905-6088.