Elder parent's finances:Help them without hurting yourself.

Your elder parent’s finances can quickly impact upon your own if you're not careful. Your thinking about your elder parent’s finances may not even include some of the everyday things you do for them such as buying groceries, buying a warmer coat, paying to install a ramp, or the many trips back and forth to the doctor’s office. But, their expenses include the small everyday things as well as the large things that may come to your awareness suddenly such as the need for adult day care and a way to pay for it. You need a way to regulate the smaller expenses as well as figuring out a way to pay for the larger ones. These are all things to consider in an analysis of your elder parent's finances.

Elder parent’s finances: It's tough and it's personal

The various aspects of your elder parent’s finances involve some very tough and very personal decisions. Many of your decisions will depend upon your own financial security and their financial insecurity, as well as your personal relationship with your parent or personal views. However, you need to be very careful not to compare yourself with others and to consider your decisions immoral, unless you are obviously doing something very wrong. There's nothing wrong with not wanting to undermine your own financial stability or dip into your children's college fund to pay for your parents bills.

The first step is always to learn about all of the benefits, services and programs that are available in your area to help with your concerns. Many times, families with very limited resources, pay for all of their parent’s expenses without realizing that there are actually public and private programs available in the community to help. Learn about Medicaid, Medicare, PACE programs, VA benefits, benefits for government employees and their families, and other work-related benefits that may extend to your parents or other family members. There are many services available in the community such as old-age care, transportation, meals on wheels, and various community services that may be available free of charge or on a sliding scale. Reverse mortgages are also available in many cases to provide a relatively creative solution to some of your elder parent’s financial problems.

Elder parent’s finances: What should I do next?

After learning about some of the benefits available in the community to assist in your elder parent’s finances, the second step involves looking carefully at your own financial resources. What do you need to live on and retire? How do you continue to care for your children and provide for their education future? What can you afford to spend? Are you really willing to spend it?

If you decide to spend some of your own money, do you have siblings who are willing to share the burden? You should probably create a fund in which you all contribute appropriately and then appoint someone to keep track of the expenses associated with the fund.

If you're the only family member willing or able to help, you can treat many of the expenses as a business arrangement. There's nothing wrong with considering many of the daily expenses within the context of a business arrangement. For example, if you give your mother a loan, she may be willing to pay it off (with or without interest) upon her death. You may even consider buying her house and allowing her to remain in it until she dies which would then provide her with more spending money. If you make an arrangement like this, you should write up a contract with clearly defined terms and have it signed by both parties, so there is no misunderstanding.

If you are beginning to see that you're paying for everyday expenses that are starting to add up, you should keep a record of what you spend. You may be able to identify ways to deduct some of these expenses from your taxes, including declaring your parent as a dependent. Also, you may be able to work it out so that you are reimbursed from their estate after their death. Always alert your siblings about the expenses you're paying and make sure they agree to the reimbursement plan. You should then send them regular financial reports and keep very meticulous records which include all bills, receipts and canceled checks. You don't want your parent’s finances to undermine your personal relationships with your siblings or other family members.

You're not betraying assumptions of goodwill by making the transactions associated with your elder parent’s finances more of a businesslike arrangement. Many of the closest family relationships can be absolutely destroyed by financial issues. There will be much less contention if everything is decided in advance and maintained in a businesslike manner related to your elder parent’s finances.

Adapted from How to Care for Aging parents by Virginia Morris

Webpage by Paul Susic MA Licensed Psychologist Ph.D. Candidate