How to help elderly parents with investments


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Regardless of whether your aging parents have shown any signs of mental decline, you need to talk with them about their investments before it’s too late. If you don’t know what they’ve done with their money, you won’t be able to help them manage their affairs when it comes time.

Just like all matters that cause seniors to lose their independence, this one needs to be handled tactfully and delicately.

Having the “talk” with your elderly parent(s) seems about as awkward as the one they had with you before your teen years about sex. Everyone feels the embarrassment.

But, the earlier you initiate the conversation about your parent’s investments, the better, says Brent Neiser, senior director of Strategic Programs and Alliances at the National Endowment for Financial Education in Denver.

“It’s helpful to know about money matters in case you need to harvest resources for your loved one’s care,” Neiser says.

Setting the stage

Daughters and daughters-in-law are usually the prime movers in starting these conversations, says Carolyn Rosenblatt, an elder care attorney in San Rafael, California.

“Because women are the caregivers and nurturers, they almost always initiate talks about financial matters,” says Rosenblatt, who also wrote “The Family Guide to Aging Parents: Answers to Your Legal, Financial, and Healthcare Questions.”

Consider where the discussion will take place. It should be a place where the senior parents feel comfortable, Rosenblatt says. Find a location that signifies comfort and peace and will put them in the right mood — their home, a park, a special restaurant.

Leonard Raskin, CFP professional with consulting firm Raskin Global in Hunt Valley, Maryland, suggests holding the dialogue at the senior parent’s attorney’s office, doctor’s office or with a senior ombudsman present.

“Find someone the elder trusts and respects to witness the conversation,” Raskin says.

Try to uncover everything you can about your parent’s investments during this time. Neiser recommends asking the following questions:

  • What investments do you have?
  • Where are those investments held?
  • Who are the contacts for the investments?
  • How are these investments titled (joint accounts, individual, etc.)?
  • Is there a financial adviser in the picture?

“Ask your elder about IRAs (individual retirement accounts), credit union accounts, bank accounts and insurance policies,” Neiser says.

Assessing the situation

Speaking with your parents about financial matters while they are mentally sharp and physically healthy is ideal, but sometimes mental decline makes it necessary for you to jump in quickly and either help or take over.

Financial capacity — the ability to manage one’s financial affairs — in the aging population has been studied extensively by Daniel Marson, director of the Alzheimer’s Disease Center at the University of Alabama at Birmingham. In a report for the American Society on Aging, Marson says older adults are most vulnerable to impairment and loss of financial skills and capacity as a result of not only Alzheimer’s disease and related dementias, but also through normal cognitive aging.

Elder care attorney Rosenblatt agrees. “By the time a parent has memory loss, they’ve already suffered damage to their financial decision-making.

“If they frequently forget that they just talked with you, or they keep retelling the same stories, those are early warning signs something is wrong,” Rosenblatt says.

A combined study with Marson’s UAB team and the National Endowment for Financial Education revealed the warning signs of seniors struggling with financial transactions:

  • Taking longer to complete everyday financial tasks.
  • Showing reduced visual attention to key details in financial documents.
  • Showing decline in arithmetic skills related to finances.
  • Showing decreased understanding of financial documents.
  • Having difficulty identifying risks in an investment opportunity.

The mail can be one of your best friends, Neiser says. It tells you when bills haven’t been attended to and also gives you clues about the parent’s investments. Normally, statements for taxes, trading and banking come in the mail. Look at those to get an idea of the condition of the senior’s finances.

“In addition to the mail, tax returns can also be a forensic tool,” Neiser says. “Look at returns from the past few years to see if they show interest or dividend income, indicating investments your loved one might have forgotten about.”

Assisting your elder

Even though your parent might forget the details of his or her investments, you must make a point to never treat them as a child.

“They accumulated this wealth and successfully got to this point in their lives,” Raskin says. “Right now, you should assist and not take over. The takeover will occur when it should.”

According to Raskin, this can be a good time to get your own financial house in order. Make sure to discuss your investments with your own children. If you relay to them what you care about, why you donate to charity and what you believe about money alongside information about where you’ve put your money and why, you’ll have strengthened their ability to handle your finances when the time comes.

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