It's not easy watching your parents getting older. When I was a child, my Mum had the answer to all the questions I could think of asking and my Dad could fix just about anything -from broken dolls to outboard motors. They were hard workers, careful with their money, and always there to help and support. The trouble with old age though, is that while modern medicine is very good at keeping organs and limbs in good working order, we have not yet figured out how to maintain brain function. As we get older, it becomes harder for our brains to process information. Filling out forms becomes a nightmare, and understanding directions or instructions is very confusing, especially if they are in writing. My parents are now in their eighties and grow up through the depression years, learning to appreciate the value of money and how to be frugal. People of that era did not talk about money but learned to be very good at managing it.
It's hard for that generation to allow someone else to take care of their financial affairs, not only because of a reluctance to discuss private matters with anyone else, even children, but also because it represents loss of control and independence. There comes a time, though, when our parents, who we thought were capable of doing anything and everything, need our help. The trouble is that often we recognize this need before they do. Aging is a gradual process and it's hard to know when the right time to intervene. The signs of inability to accept include piles of mail that has not been attended to and confusion about whether bills have been paid or not. Your parents may not be able to tell you how much money they have in the bank or in other investments and they may get confused about which banks or other financial institutions it is invested with. You may find, if you probe further, that money placed on fixed deposit has not been reinvested on maturity and is sitting in a low interest call account.
So what can be done? Start with the piles of paper. Help your parents set up a simple filing system to keep track of everything and to keep important documents safe and secure. Help them decide which pieces of paper should be kept and which should be thrown away. Check on the filing once a month or so to see if they are managing. These days, most bills can be paid by direct debit or automatic payment, so make arrangements for this to be done. Ensure that you parents have an up to date will, and ask them to grant enduring powers of attorney to someone they trust – either a family member or friend. This should be done while they are still mentally capable and will enable that person to manage their affairs and take care of their welfare should they become mentally incapacitated. If they are willing, help them review the bank accounts and investments they have and where possible simplify things, for example by reducing the number of bank accounts.
Late in life, investments should be identical by either placing funds on deposit with a bank or arranging for them to be managed by someone else such as a family member (under power of attorney) or a financial adviser. There is a real risk in some families of what is termed "elder abuse". I have seen instances where aging relatives have been pressured to invest their money in risky investments in order to obtain a higher return (so that their derivatives may receive a larger inheritance) or where children have become aware of how much money their parents have and pressured them into making it available to pay the children's debts or fund risky business ventures with low interest loans. The aged need to be treated with dignity, respect and tact. Help them, but let them do as much as they can while they are capable, and remember that their affairs should always be managed in their best interests, not somebody else's.