A survey published a couple of years back showed that most adults would rather have the “sex talk” with their kids than talk to their parents about aging, with money being one of the touchiest subjects.
Deciding it’s time to take control of a parent’s finances isn’t easy for the adult child or parent. Adult children don’t want to appear controlling or greedy, and may have trouble approaching a subject that many people from the previous generation consider private. A parent may have difficulty admitting or even accepting that they need help—something that can also be hard for the child.
Though difficult, taking control of a parent’s finances is a necessary step that can help protect them against financial fraud and help ensure they have the money needed to live comfortably. But how do you know when it’s time to step in and take control?
Look for the signs
Looking out for the signs that you parent is being irresponsible with money can help you know when to step in. For instance, you notice that your parent:
- is getting forgetful
- is misplacing items
- is making purchases that are out of character
- is making repeated trips to the bank
- has unopened bills piling up
- is getting calls or letters from creditors or collection agencies
The son of one our clients, who will remain unnamed for privacy, discovered his elderly mother had been the victim of an elder scam after noticing a letter on her dresser from the bank marked “urgent”. After some prying, his mother admitted to sending scammers more than $15,000. She lost the money to a CRA tax scam, and like many seniors who are the victim of fraud, she was too embarrassed and frightened to tell her family about it.
Years ago, another client, an Alzheimer’s sufferer and regular church attendee, wrote a cheque for no apparent reason to her church for $30,000.00. Her Power of Attorney continues to litigate in an effort to recover the funds to this day.
Fraud is the number one crime against older Canadians, according to a report by the Federal/Provincial/Territorial Ministers Responsible for Seniors.
Step in early on
Don’t wait for your parents to bring it up or until something catastrophic happens to step in. The majority of decisions about a parent’s finances and senior care are made during a medical crisis, which can complicate things greatly.
Getting involved while your parents are still healthy and able to have a rational conversation can make things easier for everyone.
If you are the person that your parent wishes to take over their affairs, you will need to have the right documentation in place. Having the account and pin numbers or even having a joint account with your parent isn’t enough; Powers of Attorney are required to give you control.
Your parent cannot sign Powers of Attorney if they lose their mental capacity. A lawyer can request a medical assessment before allowing them to sign any document if they feel your parent’s understanding of the documents is diminished.
Having the conversation
It’s not unreasonable for you to ask your parents how things are going financially and this is a good way to start the conversation. To make it easier, look for cues to bring it up. For instance, when your parent talks about home repairs or another potentially costly event or when a commercial comes on about financial services, retirement, or elderly care services.
If you’ve already noticed signs of a problem, use the following tips to help you talk to your parent about taking control of their finances:
- Lead with loving intentions – Start by letting your parent know that you care and just want what’s best for them.
- Express your concerns – Be specific about your concerns, such as a change in their health or other signs of a problem.
- Ask permission to help – By asking permission you are being respectful and less likely to offend them or make them feel helpless or powerless.
- Be reassuring – Reassure your parent that you are not attempting to take over their life or control them, but rather just trying to help out of love.
- Listen – Hear them out and encourage them to be open and honest about what they want and how they’re feeling.
David Porter, CPCA
Living Assistance Services – Senior Home Care
Don’t be fooled by fraudsters posing as CRA this tax season. http://www.rcmp-grc.gc.ca/en/news/2019/be-fooled-fraudsters-posing-cra-tax-season
Joint accounts. https://www.canada.ca/en/financial-consumer-agency/services/banking/bank-accounts/joint-bank-account.html
Powers of Attorney: rights and responsibilities. https://www.canada.ca/en/financial-consumer-agency/services/rights-responsibilities/rights-banking/rights-power-attorney.html