Caring for Elderly Parents: The Financial Issue

Jun 13th, 2010 | By | Category: Senior Finances

A recent SCJ Editorial Staff meeting found several editors comparing notes about dealing with financial issues with their aging parents.  SCJ Editors are all seniors themselves, and they all have elderly parents for whom one level of care or another is required.  The results of the discussion were notable, and this post describes what we all learned from the intercourse.

One editor has an aging parent in assisted living in another state.  On her behalf, he recently sold some property from an estate for which she is a beneficiary.  The funds went in to a trust account for her sole benefit.  He explained the entire scenario to her, whereupon she stated she expected the funds to be deposited in a local bank account, so she “…can write checks” to use the money.  This elder has mild to moderate cognitive impairment and medical reports from several different offices have noted her poor judgment and inability to do effective reality testing over the past decade; she was also recently a victim of an identity theft scam that left her totally perplexed about how she was victimized.  She hasn’t had access to a checking account for several years, and it became the editor’s job to determine how he would handle this situation with his mother.

His Response:  Upon recommendation of a nurse with extensive experience working with seniors, he wrote a letter to his mother detailing how the funds were reserved for her use, and why he would remain in control of them, denying her un-filtered access.  He asked her to keep the letter so when she had questions about why he was managing the money and she was not, she could refer to the letter for a detailed explanation.  The letter was written in kind and loving tones, using simple language she could easily understand.  He expects to hear questions from her about the funds, and he will both answer the questions as well as refer her to the letter that explains the entire process.  He is credited with maintaining a loving and supportive relationship with his mother throughout his life, never giving her any reason to doubt his intentions with relationship to her.

Another editor is dealing with an aging parent who managed his own financial affairs until just the past couple of months.  He is severely cognitively impaired and unable to remember anything beyond a few seconds.  Long term memory is somewhat better, but even details are confused when he relates a memory from years ago.  Over several months, it became clear to the editor and her siblings that he was unable to manage his various investments alone and, in fact, there was some concern about the possibility of identity theft and being a victim of scams on the elderly.  She knew action had to be taken sooner rather than later. 

Her Response:  The siblings agreed they would ask him to voluntarily execute the power of attorney he had prepared several decades ago, realizing that if he did not agree, they would be faced with having him declared mentally incompetent–a place none of them wanted to go.  When approached about the POA, he readily agreed to execute it, which now allows two of them to participate in all financial decisions that must be made on his behalf.  The siblings are credited with maintaining a loving relationship with him over eight decades which was likely the basis for him feeling comfortable with signing the document. 

On the surface, these two experiences have very little in common.  However, the editors agreed we learned an important lesson in caregiving for elderly parents:  There aren’t any ‘rules’ for how to deal with financial issues with elderly parents.  Each situation must be carefully evaluated, taking in to account all the dynamics and variables that affect where the parent is at a given point in time, knowing that can change in the future.  The best advice we can offer is to act from a position of love and caregiving for one’s parent, evaluating medical, social, environmental, mental, emotional, psychological realities of the parent, and then asking ourselves how we would want our child/children to act if we were the one receiving care. 

SCJ will probably revisit this issue in a few months, adding to the journey our editors are on with their elderly parents.

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