Can you legally take over elderly parents' finances if they are mismanaging money?

Get the legal right to make financial transactions You need to be a joint account owner, trustee, their agent under power of attorney, or their court-appointed conservator or guardian .

How do I access my elderly parents' bank account?

Power of Attorney It means that you can deposit, withdraw, pay bills, and manage other assets. Additionally, a power of attorney allows you to sell assets and access parents' bank accounts . For this, you need a long-term power of attorney that remains valid even if the parent becomes incapacitated.

What is it called when you take over someone's finances?

A conservatorship is a court order that appoints someone to oversee the financial affairs of a minor or a person who is incapacitated. A guardianship typically involves the appointment of someone to manage the medical and physical care of a person with limited capacity, or a minor. One person can serve in both roles.

Should I put my name on my elderly parents bank account?

Having a joint bank account with an elderly parent can be convenient, but it usually isn't the ideal approach to helping your parent with money matters. If you have siblings, it easily could lead to disputes.

What is it called when you take over your parents' finances?

Taking Over Elderly Parents' Finances Legally There are a few options: for your parents to execute a durable power of attorney naming you as their agent, for your parents to create a revocable living trust, or for you to pursue a conservatorship over your parent.

Is it better to have a POA or joint bank account?

Most estate planning attorneys recommend the use of a POA rather than adding an owner to a joint account .

Should I be on my elderly mother's bank account?

The funds in the account can affect your ability to qualify for financial assistance. For example, sharing a bank account could put an elderly parent above the income threshold for Medicaid. It could also affect financial aid for prospective college students.

Can I take over my dad's bank account?

It's illegal to take money from a bank account belonging to someone who has died. This is the case even if you hold power of attorney for them and had been able to access the accounts when they were alive. The power of attorney comes to an end when a person dies.

Is there a program that pays you to take care of your parents?

Medicaid HCBS (Home and Community Based Services) or 1915(c) are the most common option , allowing states to pay for in-home personal caregiving and assistance with activities of daily living (ADLs).

Can I pay myself to take care of my parents?

Some elderly individuals that have long-term care insurance may use the benefits from that insurance to pay their children to provide them with care. Each policy is different and some policies may expressly prohibit family members from being compensated . However, such rules are relatively rare.

Can I control my parents' bank account?

Set up a durable power of attorney A durable power of attorney lets you make financial decisions on your parents' behalf. To get them on board, highlight how you're trying to make their lives a little easier. They'll still have access to their accounts, but so will you.

Am I responsible for my parents finances?

In 26 states (and Puerto Rico), laws generally hold children financially responsible for certain debts of their parents . These laws are referred to as filial responsibility laws (or filial support or filial piety laws). The details of filial responsibility laws vary by state.

Am I financially responsible for my parents?

Filial laws require children to provide for parents' basic needs such as food, housing, and medical care. The extent of filial responsibility varies by state, along with conditions that make it enforceable including the parent's age and the adult child's financial situation.

Taking Over Your Parent's Finances | Elder Care Alliance (2024)

Being the child of an aging parent often comes with unexpected responsibilities and difficult decisions. Not only do your roles begin to shift as you take on more duties to care for your parent, but you may also end up making choices for your parent that they would normally make independently. If the time comes when your parent is no longer capable of making financial decisions due to a medical condition or escalating Alzheimer’s or dementia, you need to know how to take over your parent’s finances.

When Is It Time To Start Managing Your Parent’s Finances?

Aging isn’t something that happens overnight. So before cognitive or physical factors become an issue for your parent and hinder their decision-making, have a conversation with them about their finances.

This isn’t an easy conversation to have. Aging parents wanting to hold on to their independence as long as possible often avoid the topic. Adult children not wanting to meddle in their parents’ affairs also often avoid it. The result of waiting and ignoring the issue, however, can be dire. Your parent may see their accounts closed, credit damaged, insurance lapse, and retirement funds drained.

There are early warning signs that indicate it may be time to step in and help your parents manage their money. Watch out for the following behaviors or events:

There are piles of unopened mail at the house
Your parents seem to lose track of cash or checks
Your parents cannot explain calls from creditors
Your parents complain about not having enough money
You notice frequent and uncharacteristic trips to the bank
Your parents send money to participate in multiple contests and sweepstakes
Physical ailments or memory problems make it difficult for your parents to keep up with everyday financial tasks

If you start to notice these signs, it’s important not to delay talking to your parents about putting their financial affairs in your hands.

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A Step-by-Step Guide: How To Take Over Finances for an Elderly Parent

There’s no right way to approach your parent about financial matters. The best thing you can do is follow these steps before your parent becomes too ill or is incapacitated and cannot communicate with you. Use this information to create a checklist for taking over parents’ finances.

1. Start Early and Start Slow

Having conversations ahead of time before you have to think about how to take over your elderly parent’s finances has two benefits. It makes the transition smoother, and it gives you a better picture of their whole financial landscape.

If you can, ease into the process as much as possible instead of diving in. For example, if one of your new responsibilities will be to help pay bills by writing checks from their account, do this task together for a while before you do it independently. Make sure you get written consent from your parent for any type of financial responsibility they want you to take on, such as setting up their accounts for automatic payments or canceling a utility.

2. Organize Financial and Legal Documents

Before taking over elderly parents’ finances legally, get all of their documents organized and secured in a safe place. At this stage, you’ll need to complete the following:

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3. Consolidate Financial Responsibilities

As you get to know your parents’ financial reality, you may start to notice that they have different systems for bills, credit cards, services, and utilities. At this point, you should encourage them to consolidate and streamline their finances to reduce the burden of keeping up with physical checks and multiple carriers.

Start by ensuring that you can switch the income they receive to direct electronic deposit. That way they don’t have to sign checks and stand in line at a bank to replenish their accounts. After that, work on consolidating credit card accounts or closing them altogether and getting your parents set up with automatic bill payments.

4. Watch Out for Scams and Identity Theft

Older adults are often the prime targets of financial scams and identity theft. As they age and you contemplate how to take over your parent’s finances, you need to stay alert for signs of financial insecurity and danger.

Talk to your parents about signing up for a credit monitoring service, and get their permission to receive account transaction alerts in your email or personal device. Get your parents’ numbers and address on the national registry to opt out of spam, and keep an eye on the mail that arrives at their home.

5. Maintain Separate Finances

Your parents might suggest that you combine accounts so that they don’t have to worry about getting behind with the bills, but you should always maintain separate finances. When it comes to taking over elderly parents’ finances legally, things can get messy if you have shared accounts.

Even though it seems convenient, you need to know what resources your parents have and how to use them appropriately when it comes to that point. You should not mix your personal finances with your parents’.

6. Consider Power of Attorney

One of the most important things that comes up when looking at how to take over your parent’s finances is power of attorney. This is a formal designation that gives you power over your parent’s legal and financial matters. Power of attorney is something your parents can only grant while they are still mentally competent and able to make this decision.

Exploring this option doesn’t mean your parents need to give you complete control of their lives. There are various forms of power of attorney, some temporary and some permanent. Because it is a legal document, you and your parents can adjust it to fit your expectations and needs. It’s best to consult with a lawyer who specializes in elder law to complete this step.

7. Communicate Clearly and Often

You probably already know that money can impact all kinds of relationships, but it can especially affect family dynamics. So make it a practice to communicate openly with your siblings and other family members about how to take over your elderly parents’ finances. This kind of open communication can help avoid misunderstandings between all parties who have your parent’s best interests at heart.

8. Speak to a Financial Planner or Attorney

The financial health of your parents is almost as important as their physical health. Just as you wouldn’t hesitate to bring in a medical expert for an ailment, don’t hesitate to bring in financial experts to help keep everything in order and share the burden. Financial planners or elder law attorneys know the ins and outs of your unique situation and can help you make sound decisions.

Taking Over Your Parent's Finances | Elder Care Alliance (2)

9. Notify the Proper Agencies

As time progresses and you begin taking over your elderly parents’ finances legally, make sure to notify the proper agencies. If you do have power of attorney, your parents’ financial institution needs to have a copy of the document on hand. This also applies to any institution or agency that oversees retirement benefits such as Social Security or Veteran’s Affairs. Similarly, if your parents are on Medicare, inform the agency about your legal role.

10. Keep Up-to-Date Documentation

When it comes to serious changes such as taking over your parent’s finances, you have to document every step of the process. While you will likely reach important points of consensus through discussion, try to follow up your in-person conversations in writing via email.

Take detailed notes of what you talked about and include dates. Show your parents and siblings that you are keeping track of how the conversations progress so that everyone feels included. Maintaining proper documentation will help you avoid legal problems in the future.

Most Common Questions: How To Take Over an Elderly Parent’s Finances

Is it legal to take over an elderly parent’s finances?

When done in the correct way, it is legal to take over your parent’s finances. However, you must understand that simply having access to your parent’s online banking accounts and being able to receive or send money with that information is not explicitly legal or legally binding.

Taking control of an elderly parent’s finances legally means getting power of attorney to act on their behalf. You can only create this legal document while your parent has the presence of mind and is capable of making that decision. If your parent is incapacitated or incapable of signing legal documents, you will have to petition a court for legal guardianship, which can come with expensive legal fees and may take many months.

What’s the best way to talk to elderly parents about their financial state and future?

It’s never easy to start a conversation about finances. Even if your parents are in a good financial position with enough retirement funding and other income streams to stay comfortable for many years, it’s still important to plan ahead for their financial future.

Try a gentle approach where you discuss your finances first. Let your parents know that you have a designated person lined up to take over your finances if anything happens to you. Then you can pose the question of what your parents have planned if something happens to them in the future.

Is there a checklist of what to do to take control of a parent’s finances?

As you plan to move toward overall management of your parent’s finances, check off each of these items one at a time:

Begin an open and ongoing conversation about the future of your parent’s finances
Take stock of your parent’s current financial landscape, including accounts, income, and expenses
Organize and secure your parent’s financial and legal documents
Communicate with your family members about any plans you make with your parents
Streamline your parent’s bill payments and consolidate any leftover debt
Assume one financial task at a time as your parent sees fit
Discuss power of attorney and consult a lawyer to draft a legal document
Be aware of actions and situations that signal when it may be time to step in and take control

Having this checklist on hand will help you navigate challenging situations that come up as your parents age.

How To Take Over an Elderly Parent’s Finances With Community Support

Trading roles with a parent as the financial caregiver and custodian can be overwhelming. Lean on your siblings and other family members to get through it as you discuss how to take over your parent’s finances. If you can, share some of the responsibilities with another person so that you don’t shoulder it all yourself. Remember that the sooner you understand your parents’ finances, the easier it will be to take over when they need your help to stay financially sound.

Elder Care Alliance has served older adults and their families in California for nearly 20 years through five different senior living communities. From day one, our mission and vision have been centered on the care of seniors — putting their well-being and dignity at the forefront of all we do.

We operate a network of communities that offers a range of senior living options with varying levels of service, support, and care. Whether you’re looking for a little assistance or a higher level of care, a short-term stay, or a new home, Elder Care Alliance has a community to meet your needs. We would love to give you a tour of one of our communities and answer any questions you have as you explore the best community for yourself or a loved one. If you would like to set up a virtual tour or see us in person, please call us today at(510) 617-5905.