There are many warning signs that it might be time to step in with parents' finances: dad can’t remember where he banks, or he struggles to do simple math calculations. According to the NEFE, 47% of seniors have trouble managing their bills.
This is one of the toughest decisions and conversations that a grown child can have with their parent. It’s the moment when there can be no beating around the bush—there is nothing left to do but to talk with Mom or Dad about the fact that they shouldn’t be handling their finances any more.
We find that the number one issue for most of our elderly clients is the desire to remain in control of their own affairs as long as possible. Sometimes, this desire to remain in control causes people to put off planning. They feel as though ignoring the problem will mean that they’ll never have to address it.
But as pointed out in the FoxBusiness article, ignoring the possibility that you or a loved one may need help with their finances is the worst thing you can do. Unfortunately, this is the case for many families, and a survey cited in the article notes that 70% of those surveys responded that there were “‘major barriers’ preventing families from discussing the issue.”
A simple planning document like a durable power of attorney can avoid costly court actions when an elderly loved one loses the ability to handle their own finances. Without a plan in place, it may be necessary to file a guardianship and/or a conservatorship action in probate court, a process that is both expensive and time consuming.
In addition, in Alabama a durable power of attorney can nominate the person that you would wish to serve as guardian or conservator in the event that your power of attorney or other estate planning documents fall short. This means that even if the probate court has to get involved for some reason, you know that a person of your own choosing will be handling your affairs.