Understanding When to Let Others Manage Your Money

Deciding when to ask for help with your finances can be tough. It's important to talk to your family about this, even if you're hesitant. Donna Winton, for example, is ready to trust her children with her money when they feel it's time. During a doctor's visit in 2021, Donna hesitated to answer a question, and her daughter noticed she was becoming forgetful. Although her memory test results were normal, Donna was prepared to let her daughters take charge if needed.

For retirees, deciding when to let others handle their money is a major decision. It involves knowing yourself well and trusting someone else to make big decisions for you. A study showed that many retirees worry about picking the right time to do this, fearing they might wait too long due to not realizing their own mental decline or not wanting to lose control.

Donna, who retired in 2008 after working in financial education, is aware of the risks. She knows that even small financial errors can be serious, especially as studies have linked missed bill payments to early signs of dementia.

Elliott Arnold, a financial planner, works with families to manage these transitions. He often helps set up introductions between his older clients and the people who will eventually manage their finances. This is important as some older people may miss bills or be vulnerable to scams. Elliott also assists younger clients who notice unusual financial behaviors in their aging parents.

Appointing a "trusted contact" at your financial institution can help. This person can be alerted if there's suspicion of financial abuse, but they can't manage your money. A more formal step is giving someone "durable financial power of attorney," which lets them handle your finances if you become unable to do so yourself.

Elliott's own experience with his father, who had cognitive decline, shows that even with legal preparations, managing an aging parent's finances can be challenging.

If you don't have a family member to help, hiring a professional fiduciary is an option. These are licensed professionals who can help with financial tasks and decisions. Elliott suggests starting discussions about financial control early, preparing legal documents, freezing your credit reports to prevent fraud, and involving trusted people in your financial planning.

It's also wise to block unwanted solicitations to reduce the risk of scams. This can be done through services like dmachoice.org and the National Do Not Call Registry.

In the end, the goal, as Donna's daughter emphasizes, is to help maintain the lifestyle and independence of the person needing assistance, not to take over their life.

Bill Muck, MDiv., Executive Director of One Site for Seniors.