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Tax Tip of the Week | No. 473 | “When To Step In With An Older Parent” August 15, 2018

Posted by bradstreetblogger in : General, Tax Planning Tips, Tax Tip, Taxes, Uncategorized , trackback

Tax Tip of the Week | Aug 15, 2018 | “When To Step In With An Older Parent”

I have been in denial most of my adult life. I never wanted my awesome parents to ever get older. They were like Superman and Superwoman to me – totally invincible. I really believed that if I ignored that fact that they were aging – it wouldn’t happen. But alas, once again, denying and ignoring what was happening in front of me – didn’t save the day. If you find yourself in a similar situation, perhaps what you read below may be of value.

Glenn Ruffenach of the WSJ on May 4, 2018 shares some of his thoughts that follow in his article with us:

…that 92% (that is a HUGE number) of “caregivers” provide some type of financial assistance for a family member such as handling insurance claims, filing taxes, paying bills, etc.

As for “when,” I would broach this topic as soon as possible. If anything, many families are too slow to act. Denial plays a big part in this. Older parents, hoping to stay independent, are quick to minimize difficulties; adult children, reluctant to meddle, may ignore red flags. (And few families, of course, enjoy talking about money.) As such…everyone waits. But the consequences of waiting can be dire: closed accounts, damaged credit, money lost to scam artists—even foreclosure.

The simplest approach is usually the best: pointing out to your mother (or parent) that all of us, as we age, need help, whether its yard work or home repairs or transportation. And household finances are no exception. I began talking with my mother when she was in her early 70s (and still in good health) about the importance of having a family member on “standby”—someone who knew about her bills, credit cards, insurance, investments, etc.

We already had her estate plans in order, and I had power of attorney. But we took two additional steps: We added my name to her checking account, and I filled out a separate set of power-of-attorney forms with the custodian of her individual retirement account, her biggest asset. (Many financial institutions have—and require that you complete—their own documents if you wish to give, say, your spouse or an adult child access to an account.) The latter proved to be invaluable when my mother suffered a stroke and I needed to tap her IRA quickly to help pay for long-term care.

For anyone acting as a financial caregiver, the following resources are invaluable:

•    The federal Consumer Financial Protection Bureau
•    The National Caregivers Library
•    AARP

And if the person who needs help is at some distance from you, you might want to hire a daily money manager. These professionals can sit with a person at home and help pay bills, balance checkbooks and decode medical bills. Start with the American Association of Daily Money Managers (aadmm.com). Be sure the manager you choose is insured, bonded and willing to include other family members in his or her work.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in our Dayton office at 937-436-3133 or in our Xenia office at 937-372-3504. Or, visit our website.

This week’s author – Mark Bradstreet, CPA

–until next week.


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