Helping an Aging Loved One Manage Their Finances - an Overview

Laura Herman, Dementia and Eldercare Professional
Added: 04.14.2022
10 minutes read
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Contents
1. Start with a Durable Power of Attorney
2. Document Everything
3. Consider the Pros and Cons of a Joint Bank Account
4. Watch Out for Fraud and Scammers
5. Plan for Future Care Needs
6. Find Financial Assistance
7. Tackle the To-Do List
8. Explore Your Resources

1. Start with a Durable Power of Attorney

A durable power of attorney gives you the legal authority to make decisions and act on behalf of your loved one in legal and financial matters. Unless you have guardianship or conservatorship over your loved one, it’s essential they complete a power of attorney right away.


2. Document Everything

If you have guardianship over your loved one you’re required to document all financial transactions, but even if you aren’t legally obligated to do so it’s always a good idea. 

Clear records are especially important if: 

  • You share a joint account
  • You pay yourself or others from your loved one’s estate
  • There’s any conflict of interest (or even potential appearance of one)
  • There might be a need to examine financial transactions (for example, if there’s any chance your loved one might need Medicaid for long-term care coverage in the next five years)
Good documentation may include: 

  • A notebook or digital file detailing every penny spent and received along with the date, person or company’s name, and reason/note.
  • All receipts are organized and accessible. 
  • Opting for checks, credit cards, or digital transactions over cash. 

3. Consider the Pros and Cons of a Joint Bank Account

Asking your loved one to add your name to their bank account can make it much easier to step in to pay bills in a pinch. It can also be a good way to keep an eye open for red-flag transactions. However, a variety of problems can also arise from shared accounts. It’s important to understand the risks to determine whether this is the right move in your situation.  

Some states support special “convenience accounts” which provide most of the pros of shared accounts with few of the cons.


4. Watch Out for Fraud and Scammers

Older adults are at risk to be targeted by scams and fraudsters because of their age. If they’re duped once there’s a good chance they’ll be targeted even more heavily again. 

Keep an eye open for red flags, which could include suspicious mail, phone calls, or emails. Popular scams include criminals posing as representatives from Social Security, Medicare, or other government agencies, lotteries, sweepstakes, free or discount medications, or other special offers. 

Steps you can take to reduce the chance they become a victim of fraud:


5. Plan for Future Care Needs

The majority of older adults in the U.S.will need some sort of long-term care in their lives. Long-term care can be provided in different kinds of facilities, like nursing homes or assisted living communities. It can also be provided at home. Regardless of where it occurs, it’s expensive, and paying for long-term care often requires some sort of strategic planning process.

Long-term care planning can involve various types of insurance, government benefit programs, tapping home equity, and other strategies. It might require consultations with elder law attorneys, certified financial planners, insurance agents, or other professionals.  

Keep Medicaid in the Back of Your Mind

Medicaid can pay for long-term care for individuals with very few assets or income. Many people who eventually apply first go through a process of Medicaid planning to keep their spouse out of poverty or protect their home to pass on to an heir.  

The chances that your loved one might end up needing Medicaid – even if you don’t currently expect to – is significant enough that it’s worthwhile to learn the basics about this program.

The very least every family caregiver should know about Medicaid:

  • Long-term care is very costly, and many people rely on Medicaid to cover it.
  • The application process for Medicaid includes a look at all financial transactions in the previous five years (2.5 years in California).
  • To be eligible for Medicaid, you must have almost no countable assets or income. There are ways to convert “countable” assets or income into “exempt” ones, but this usually requires a planning process and the assistance of a professional. 
  • Anything deemed a gift – including transfers of cash or assets sold for less than market value – can affect eligibility.
As a family caregiver managing finances, it’s important to keep one eye on the future so that your loved one will be able to access whatever care they may need.


6. Find Financial Assistance

There are countless financial assistance programs available across the nation. Some are limited to local areas and others to individuals in certain circumstances. However, if you don’t know about a benefit program can’t do you much good. Luckily there are several ways to locate potential financial assistance for whatever your situation.

  • Visit the National Council on Aging’s Benefits Check-Up to quickly and easily search thousands of benefit programs that may be available to your loved one.
  • Look into local resources that may be available.
  • Contact your local Area Agency on Aging for information on resources, benefits counselors, or benefit programs in your area.
  • Talk to a Medicaid Planner to determine the best way to approach Medicaid planning in your situation.
7. Tackle the To-Do List

It’s best to start by talking to your loved one as early as possible – before they even need help if you can. It can be a lot easier to find out this information by asking them directly than it is to dig it up and discover it on your own.

  • Take an inventory of your loved one’s financial and legal bill information, including:
    • Wills, trusts, or other estate planning documents
    • Power of attorney and other legal documents 
    • Bank, investment, and credit card accounts
    • Retirement, pension, and annuity accounts
    • Login information for online bill payment accounts
    • Auto-recurring subscriptions
    • Mortgage/rental information
    • Utility and monthly bill accounts
    • Information on loans or debts
    • Insurance policies
    • Tax information from the last 3-7 years
    • Safe-deposit box information
    • Property deeds and vehicle titles
    • Birth certificate, marriage/divorce documents, citizenship papers, etc
    • Social security statements and benefits letter
    • Information about Medicaid, veterans benefits, or other programs 
  • Determine whether any payments are behind and create a schedule for bill payments. Automate payments to make things more manageable.
  • Cancel all unnecessary payment accounts, including credit cards, lines of credit, PayPal, Venmo, etc.
  • Consider professional assistance. Check your Olera dashboard for recommendations for professionals in your area.
    • Elder law attorneys can assist with:
    • Certified Financial Planners can:
      • Develop holistic budgets
      • Review or update investment strategies
      • Create plans for funding long-term care or reaching other financial goals
    • Senior money managers can:
      • Handle day-to-day financial needs
      • Write checks
      • Maintain records
      • Gather documents
      • Manage bill payments
      • Provide reminders
    • Insurance agents can help with insurance questions and needs about whichever types of insurance they specialize in, such as:
      • Medicare
      • Private health insurance
      • Long term care 
      • Life insurance
      • Annuities
8. Explore Your Resources

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