It is estimated that up to 5 million elderly Americans are being taken advantage of at an estimated loss of $36.5 billion (1, 2).  At some point, we may find it necessary or beneficial for someone to assist with financial activities.  When the time is right, receiving assistance with finances shouldn’t be seen in a negative light.  Financial assistance should be seen as the context of an investment, like hiring an investment advisor.  Without question, the most crucial element in this conversation is the balance of independence and self-reliance and the risks associated with the aging process.

I recently became the guardian of a close family friend who has dementia.  This experience inspired me to write the Estate Planning Series and create a few Estate Planning Tools, which I thought I would share.  This series explores some of the key elements I’m thinking about as I grow older.  Hopefully, some of this information will be useful for you as well.  This series is not intended to be comprehensive or all-inclusive but rather a reflection and lessons learned from my own experiences.  Feel free to use this as a foundation for conversations with your own family, friends, or professional service providers.       

Thankfully, the woman I care for had planned ahead by getting her long-term finances in order; she just needed help paying routine bills.  The process of getting my hands around the different accounts felt overwhelming.  Month after month, I would see various bills come in and talk to her about what we should keep open and what she wanted to close.  Like most of us, by volume, monthly bills made up most of her accounts, but there were also quarterly and a few annual bills we had to discuss.  The time between billing cycles meant it took over a year before I began to feel comfortable that I had a holistic view of her financial life. 

Whether you are creating a holistic estate plan for yourself or providing care to a family member, in either case, taking time to think about the process of financial management is an essential element for financial security.  One of the most important things to remember is how critical it is for people to feel financially independent.  Hopefully, some of the lessons learned from my experience will benefit others personally or as a caregiver. 

1. Long-Term Finances. Establishing investment strategies for pensions, retirement plans, 401ks, etc., provides peace of mind to everyone involved in the financial management process.  I imagine my experience was more straightforward than many people’s because the woman I care for has a pension covering her daily living expenses. 
2. Account Structure. Never comingle accounts.  Blending a caregiver and a loved one’s money increases the risk of misunderstandings.  It may be worth establishing multiple accounts, one set for the caregiver and one for the loved one, which would allow for greater financial freedom while minimizing financial risk and misunderstandings.  The caregiver must continue to monitor all accounts, but if the loved one makes a financial mistake, its impact is limited to one account.  I was fortunate because the established Trust had two checking accounts.  Two separate checking accounts allowed one to be used to pay the bills, and the other gave her a feeling of financial independence. 
3. Automatic Payments and Transfers. Automating as many payments and transfers as possible does a couple of things.  First, it’s a more efficient process, and second, automating the payments and transfers establishes accountability.
4. Power of Attorney (POA). For all the right reasons, many businesses won’t take action with a general Power of Attorney.  However, not being able to use a POA is problematic and challenging for a caregiver.  In many cases, it took me several weeks to get permission from a business to make account changes.  In some cases, the changes were as simple as updating a postal address.  Ideally, a loved one is in a position to help grant access to critical accounts.  If not, a caregiver may need to be prepared to take legal action to force a business to work with a caregiver.  Legal action may include hiring an attorney to request an order from the court to allow changes to an account.    
5. Trusts.  Having a Trust goes a long way in establishing a long-term plan for aging.  However, like a POA, caregivers need to be prepared to work with businesses and their internal processes to grant caregiver permission on accounts.  It was my experience that businesses didn’t have a designated office to deal with changing a Trust manager.  When businesses did have designated offices, the customer-facing employees weren’t well trained on the defined process. 
6. Account Lists. Having an updated list of open accounts would go a long way to facilitating a caregiver stepping in to provide financial assistance.  I was provided a thoughtful and comprehensive Trust when I became a guardian.  However, there wasn’t a list of the accounts I would be managing.  I had to assume a balance of proactively looking through files and opening postal mail to determine if I had tabs on all the accounts and bills that needed to be paid and managed. 
7. Communication.  A caregiver should be prepared to keep everyone involved up to date and on the same page.  Communication is vital in minimizing the risk of misunderstandings.  Routine communication may include monthly phone calls, emails, reports, etc.; every situation will differ.  On the flip side, family and/or friends must be sensitive to how resource-intensive caregiving can be and agree on the frequency and type of updates they expect to receive. 

Please feel free to share your own experiences and lessons learned in the comment box below.  Your shared thoughts may help someone else going through a similar experience.  Thank you.

1. Do you have a Will, Trust, or Living Probate? Having one of these and knowing how to use them will relieve a lot of stress, if not for you, then for your family and friends.
2. Are you open to the idea of having someone assist in day-to-day financial activities? If so, have you discussed this with them?  Predesignating someone to help with your financial activities will go a long way in minimizing arguing and hurt feelings within the family. 
3. Do you have someone you can trust to help you determine when and what type of help you may need or want? Talking to your doctor or a trusted confidant can help a person sort through their own thoughts, feelings, and emotions, enabling them to make informed decisions.    
4. Have you created or designated a long-term financial plan? The more specific and direct you are about your finances, the more relaxed you will feel with the help you receive. 
5. Have you considered how a caregiver will access your accounts to pay your bills? Preestablishing systems and processes for assistance will help to ensure you receive the assistance you want.  Otherwise, your caregiver will have to do what they think you want.  
6. Have you established your finances in such a way that you have minimized risks to your entire financial portfolio? Splitting your finances into more than one account ensures that you can still access your other accounts if anything happens to one account.
7. Do you have a list of accounts, assets, bills, etc., so if a need arises, a caregiver can step in and help in any way you want? Including an account list with your Will or Trust allows a caregiver to step in more quickly and efficiently to assist in a time of need.
8. Have you considered how you would like a caregiver to update you on your financial situation?  Face-to-face meetings are always best, but maybe you want to see something more: bank statements, spreadsheets, etc.

Do not complain about growing old.  It is a privilege denied to many (Mark Twain).

Good Luck and Stay Ready, My Friends.

RuReady Resources:

1. Estate Planning Organizer
2. Estate Planning Readiness Review
3. Estate Planning Series Resource List

 AARP Resources:

1. Financial Workbook For Family Caregivers. You will have to register for a free account with AARP to access this booklet.  I would highly encourage people to review this booklet to see if this is something you and your family could benefit from.  AARP is one of my first stops when looking for information on new topics I’m dealing with.  I have found AARP to be an amazing resource. 

1. National Council on Aging (2021, Feb 23) Get the Facts on Elder Abuse. https://www.ncoa.org/article/get-the-facts-on-elder-abuse 
2. Mary C. Hickey (2017, Dec 22). How to Help Your Elderly Parents With Their Finances.  https://www.consumerreports.org/financial-planning/how-to-help-your-elderly-parents-with-their-finances/#:~:text=How%20to%20Help%20Your%20Elderly%20Parents%20With%20Their,…%205%20Be%20Sensitive%20to%20Family%20Dynamics%20

Disclaimer: The information provided in this document is informational only and does not constitute professional advice or recommendation.