Managing Elderly Parents' Finances: A Guide to Assistance and Support

Article Summary

This article provides advice on how to help a parent manage their finances after a dementia diagnosis.

Key takeaways:

1. It is important to set up a power of attorney as soon as possible after a dementia diagnosis.
2. Professional help from an elder law attorney and financial advisor may be beneficial.
3. It may be necessary to add your name to your parent's bank account in order to pay bills on their behalf.

Getting help from professionals

Some people prefer to take over their parent’s finances without help from professionals. You can look online for your state’s power of attorney form. If your parent’s financial situation is straightforward, you should be able to fill out the form yourself. If you have questions or there are special circumstances, you and your parent should meet with an elder law attorney, who can recommend options.

“Attorneys may customize the form one way or the other,” Tinkler says. “[If] you want someone to have the ability to do everything – except for anything related to estate planning – or you want them to do everything except for real estate transactions – because there’s a real estate agent you like to work with – that would be a limited power of attorney.”

You and your parent may also benefit from seeing a financial advisor.

“Some people are thinking, ‘Oh, that’s for really rich people,’ but it doesn’t necessarily have to be,” Tinkler says. “The financial advisor that most elder law attorneys work with is Krause Financial Services – all they do is elder law. We work with them, and it doesn’t cost the client anything. It really doesn’t hurt for them to review your documents and see what you qualify for, how they can save you money.”

A financial advisor or elder law attorney may provide a checklist, similar to one from the Alzheimer’s Association, to help you help your parent identify all of their accounts.

“Find out as much about your parent’s assets as soon as possible,” Tinkler says. “Communicate with them. Watch out for any mailings or online information, because there could be things out there from years ago that you’re not that familiar with.”

How to pay your parent’s bills

When you eventually become power of attorney for your parent, you should be able to pay bills on their behalf, using their funds. You may or may not need to have your name added to your parent’s accounts to do this, depending on your state and your parent’s financial institution.

“If you are a power of attorney, then sometimes you can contact the bank [to pay bills for a parent without having your name on the bank account],” Tinkler says. “[But] the easiest way would be to add the name to the bank account.”

Some people are hesitant to add their names to a parent’s bank account, in case that would keep the parent from qualifying for Medicaid. While rules may vary by state, your parent shouldn’t be penalized for simply adding you to their account.

“I have not experienced the case where a child adds their name to an account and then Medicaid would then look at the child’s assets,” Tinkler says.

However, if you contribute your own funds to your parent’s account – especially cash that can’t be accounted for – that may affect their ability to qualify for Medicaid. To protect your parent’s potential Medicaid eligibility, keep your money separate.

Author Bio

Lisa Fields is a passionate healthcare writer and advocate for better senior care in America. This article has been reviewed by TJ Falohun, co-founder and CEO of Olera. He is a trained biomedical engineer and writes about the cost of healthcare in America for seniors.