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When your aging parent is no longer able to keep track of bills, investments and money management, someone else must step in.

Often the parent has appointed an adult child or other relative to do the job.

3 mistakes to avoid

Mistake #1: Failure to communicate.

Most aging parents do not want to give up control. They have appointed someone to be the agent as Power of Attorney and/or they have appointed a successor trustee.

But when it comes time for that person to take over. There is resistance and sometimes hostility from the aging parent. Keep all explanations simple

Offer to pay bills first. As this is often an area where failure to keep track is recognized somewhat by the elder. You may get pushback but you are doing the job you are required to do and resistance must not stop you.

Mistake #2: Going to your aging parents’ bank with only the Power of Attorney.

Most banks are required to report suspicious activity that could harm a customer. They are supposed to watch out for financial elder abuse.

Since the Power of Attorney (POA) is a revocable document. The bank does not know if the elder was manipulated into signing it. And if it’s a ticket to steal or if it is legitimate. They sometimes want the elder to sign the bank’s own POA document.

But if your aging parent is “out of it” and that’s why you are taking over financial management. The elder may be not legally capable of signing another POA document. The bank will likely want some proof that your aging parent is incapacitated.

Mistake #3: Failure to look at your aging parent’s trust to see how it defines “incapacity.”

You need to know who can legally take over if your aging loved one becomes incapacitated, for finances. And know how your aging parents’ trust defines incapacity and how it is determined.

In many cases, the requirement of getting not just one, but two doctors to say, in writing, that a person is incapacitated. For finances cannot be chamged if its built into the trust.

One thing you can do early on is to have a conversation with your aging loved one to discuss the “worst case scenario” of becoming impaired. Do this proactively, perhaps at the time of retirement.

Although many aging parents are secretive about their finances. It is worth a try to get them to discuss how their estate plan addresses the issue of becoming incapacitated to manage finances. When the legal paperwork is well done, everyone is better protected.

Thank you to Carolyn Rosenblatt and Forbes for this content.

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