Caring for a Loved One's Finances

Posted by Dave Tomar on September 05, 2014

Caring for a Loved One's Finances

As a caregiver, you are probably accustomed to helping your loved one with physical therapy, daily chores and everyday activities.  But what happens when your aging parent or spouse is no longer physically or mentally capable of paying bills or managing a bank account?  As a caregiver, you must prepared to step in and begin managing your loved one’s finances. 

The Sooner the Better

Transitioning financial decisions from patient to caregiver is not an easy step.   It’s natural for both patient and caregiver to want to delay this move for as long as possible.  But the longer you put off talking about it, the more difficult it will be to manage this transition when it becomes inevitable.

The National Caregivers Library advises that the lines of communication between caregiver and loved one should remain open and fluid.  Engage in frank, honest and sympathetic discussion about the best plan of action to be implemented when the time comes.

As the primary caregiver to an aging senior, you should arrange for unfettered access to bank accounts, investment funds, mortgage payments and assorted bills. Know exactly where to look for the appropriate information when the responsibility does fall upon you.  Make sure that your loved one’s records are organized and that their accounts are in good standing.  The more you work together in advance to ensure a smooth transition, the easier it will be for you to look after your loved one’s best interests when they no longer can.

Take Legal Steps

In order to represent the interests of your loved one, you’ll need to secure what Care Pages calls “durable power of attorney.”  This legal status provides you with the right to sign documents, enact transactions and speak on the patient’s behalf on financial matters.  In the event that your loved one declines in health to the extent that he or she is unable to perform these functions, power of attorney would remove any legal constraints on your ability to do so.

If you feel that you are unable to perform these functions on your loved one’s behalf, you could consider contracting a third-party agency to help handle finances.  As is always the case with such a service, however, you are advised to work only with a trusted party.  There is no shortage of dishonest practitioners in the financial management business.

Simplify

Once you have assumed control of financial affairs for your loved one, take steps to simplify your job.  First, consolidate assets where appropriate.  Combine checking, savings and money market accounts into one functional account to reduce the possibility of confusion.  You should also pay off and close out any unnecessary credit cards or consumer accounts.  Eliminate any and all bills and fees that are no longer relevant.

It is also critical, Care Pages advises, to keep your financial affairs separate from those of your loved one.  Do not commingle bank accounts, expenses or purchases.  This will prevent confusion or uncertainty down the line.

Be Sensitive

Managing your loved one’s financial affairs may be a practical matter but it has definite emotional implications.  Your loved one may feel that he or she is surrendering an important strand of personal independence.  Recognize the difficulty of this stage and its broader implications.  Be sensitive to the emotional needs of your loved one and, where possible, do everything in your power to represent his or her wishes. 


TAGS: caregivers and finances