At first you might notice a pile of unopened mail. Your normally fastidious mother may be getting sloppy with her checkbook. Your elderly uncle may be behind on his electric bill.
The signs are often subtle, but they may indicate that aging relatives are no longer able to handle their personal finances.
Family members who sense this may want to step in and take over, but that could set up an emotional confrontation. It could also make older relatives fear losing their independence.
There are options to provide help, but they all start with having a conversation that can be difficult.
“Don’t wait for the signals to begin having the conversation,” advised Kevin Gahagan, a financial planner with Mosaic Financial Partners in San Francisco, who said he has dealt with such situations both professionally and personally. “I encourage our clients who are older to have discussions with their children, and I encourage our clients who are younger to have discussions with their parents.”
Those who aren’t proactive in talking about finances may be met with resistance. One strategy is to see if a non-family member who has a relationship with the elder relative — such as a doctor, attorney or financial planner — is willing to get involved.
Once the conversation is started, be sure to discuss a budget, their income, assets and insurance policies. It can also be a good time to make sure that a will is in place, and discuss whether a health care power of attorney is appropriate.
Bill-paying problems may stem, at least in part, from the person living on a fixed income. If that is the case, a range of local, state and federal programs are available that can help cover heating and other utility bills, provide meals, pay for prescription drugs and even reduce taxes.
“There are lots of benefits programs out there that people are eligible for” but don’t take advantage of, said Wendy Zenker, a vice president of the National Council on Aging. She cautioned that older relatives may need help applying for those programs. Sometimes the issue is confusion, but there is also often a reluctance to share personal information.
If they have applied for programs in the past and been turned down, some people may now qualify because of the recession. “People who were otherwise not eligible are finding that they are now eligible,” Zenker said.
Another potential source of funds is unclaimed pension benefits. The federal Pension Benefit Guaranty Corp. returned $137 million to more than 22,000 people between 1995 and 2007. The most recent data available showed the agency, which handles pensions of bankrupt companies, held $133 million in unclaimed benefits for 32,000 people, averaging nearly $5,000 per person.
Some companies fail to pay benefits because of paperwork foul ups or other reasons. Labor unions can also help track down missing pension funds.
Family members should also check safe deposit boxes for savings bonds and other assets. And if elders have left mail unopened or failed to cash checks, also search for unclaimed funds with the state comptroller or department of state.
Make sure direct deposit arrangements are in place for Social Security, pensions and other income sources. Likewise, automatic bill payments for utilities, rent and other bills should be set up.
When possible, family members might want to arrange for duplicate bank statements or bills to be sent to them.
Family members who do not live near elderly relatives or encounter resistance may consider bringing in a bookkeeping service or a daily money manager. Daily money manager fees vary around the country, generally ranging from $40 to $100 an hour, said Roberta Gosier, president of the American Association of Daily Money Managers. A similar service is offered free by AARP, utilizing volunteers that are supervised by local agencies that partner with the organization.
“This is being provided to people who couldn’t otherwise pay for the service,” said Robin Talbert, president of the AARP Foundation. “It provides a tremendous service to the people who need the assistance. It also provides a lot of satisfaction and reward for the volunteers.”