An Action Plan for Caring for Your Aging Parents' Money

Managing Elderly Parents' Finances

Updated: September 18, 2023

Advertising & Editorial Disclosure

Your parents raised you, loved you and provided financial security as you grew up. Now that you're grown with a family of your own, the roles are reversed, and you're a caregiver to your aging parents. Perhaps they need help managing day-to-day affairs such as finances, household maintenance or care for physical conditions like arthritis or gout. You might be concerned what would happen if they forgot to pay their bills, or if one of them suffered a stroke or received an Alzheimer's disease diagnosis.

This guide explains those circumstances that may require you to gain control over your parents' (or other elderly loved one's) finances — including warning signs that it's time to step in — as well as what legal steps are involved and how to talk to your parents about their needs in a sensitive way.

Knowing When to Intervene

One of the most difficult moments in life may be the moment you realize your parent is declining in mental sharpness. Maybe it's when you beat your father at chess for the first time or when your mother forgot your birthday this year. Worries in the back of your mind nag at you, but how do you address them?

The time to talk about your parents' finances may never seem right. You may feel like you're invading their privacy and independence, even their dignity. You may feel unwilling to face reality — that life is short and your parents are mortal. But the signs are clear. You'll need to take on an unfamiliar role and talk to them about their finances. Delaying this talk may prove costly to your parents. They may damage their credit, fall prey to elder financial abuse or identity theft, or even lose their home through foreclosure.

Warning Signs

If you live close to your parents and visit them regularly, you may already have an idea what their financial situation looks like. Even if you don't, you may need to become nosy and ask them questions about their money and household management. Watch out for these warning signs:

smartphone icon
  • Are creditors leaving voicemail messages?
  • Are charitable organizations calling to solicit additional donations?
  • Are new "friends" calling to ask for favors or loans?

Know who's making phone calls to your parents. New "friends" may enter the picture because your parents have become more generous with their gifts or money.

wallet icon
  • Are credit card companies offering balance transfer promotions?
  • Are collection agencies requesting payment?
  • Are your parents opening their mail?

Look at the type of mail your parents receive. Balance transfer offers and collection bills point to money mismanagement. Unopened mail may signal more than simple forgetfulness.

cashCard icon
  • Do your parents know how much cash they have on hand?
  • Do they know where they leave their cash?
  • Do they have any bounced checks?
  • Are they ignoring unpaid bills?

Take a peek at their checkbook and see whether they are paying bills and properly balancing their accounts. Being forgetful about cash and where they leave it may indicate mismanagement.

graphCard icon
  • Have they made out-of-character purchases?
  • Do you notice many new, expensive items in their home?
  • Have they upped the ante in their lottery ticket purchases?

Take a close look at credit card statements for unusual spending. They may be victims of telemarketing scams.

The Aging of the U.S. Population

65 million people
or 16% of the U.S. population is age 65 and older.

40% of the U.S.
population age 65 and older have some type of disability, with 15% reporting independent-living difficulty.

Approximately 17% of adults
care for an elderly relative, friend or spouse with chronic conditions or a disability.

An estimated 5.3 million
people age 65 and older have Alzheimer's disease, and the number is expected to grow to 7.1 million by 2025, hitting 13.8 million by 2050.

1 in 3 seniors dies
with Alzheimer's or another dementia.

Sources: U.S. Census Bureau,, Administration on Aging, National Institute on Aging, Alzheimer's Association, Argentum

How to Start the Conversation With Your Parents

An elderly parent undergoing a loss of independence may need his child's help with finances, which may feel like a huge blow. The relationship change spurs an identity shift in your parent's eyes — one loaded with emotion. You, too, may want to shy away from the topic. Who wants to talk about incapacitation or end-of-life issues? So it makes sense that it will be uncomfortable to have that first conversation with your parent about the need to depend on you.

If you don't believe your parent will listen to you, you could send a messenger — perhaps a close family friend. It may be easier to stomach such a conversation with a peer than hearing the hard truth from a child.

Here are some specific sentences you can use to get the conversation started with your elderly parents, according to AARP and

What did you do financially to provide for me when I was growing up?
I've chosen so-and-so to make financial decisions on my behalf in case something ever happens to me
I want to know what's important to you
Let's focus on ensuring you keep the most valuable things in your life

Legal Tools to Help Manage Your Parents' Finances

Although you can certainly help your parents manage their finances in an unofficial capacity, in many instances, having a legally recognized role may not only prove useful but also be necessary. Here are the key legal documents that give you authority to act on your parents' behalf.

Durable Power of Attorney for Property and Finances

What it does:
Gives a person other than your elderly loved one the authority to make decisions about property and finances. The person with authority, the agent, steps in to handle that person's finances in case he or she becomes incapacitated and is unable to manage them. The power of attorney defines the powers you have as the agent: write and deposit checks, pay bills and manage investments, for example. It can also limit what the agent can do. Your parents should choose the agent, who should be someone they trust.

When it's helpful:
If your parent develops Alzheimer's disease or gets into a car accident that results in incapacitation, you step in and independently access your parent's financial accounts to pay bills and expenses related to caregiving and household management. You have the authority to manage your parent's property and investments, including meeting with a financial adviser. Having this power of attorney avoids the need to go to court to be appointed your parent's guardian, which is ordinarily an expensive and lengthy process. It also helps avoid prolonged disagreement between family members because the agent is the final decision-maker.

How to set it up:
Before your parent suffers from any mental impairment, he or she meets with an estate planning or elder law attorney, who will prepare the form based on your parent's wishes. Although powers of attorney are readily accessible through online legal-service providers, meeting with an attorney ensures the document is properly prepared and matched to your parent's circumstances, so you don't encounter any roadblocks if the need to use the power of attorney ever arises.

Durable Power of Attorney for Health Care

What it does:
Gives a person other than your elderly parent the authority to make decisions about his or her health and medical care. The person with authority, the agent, steps in to make medical decisions relating to your parent's care in the case of incapacitation and the inability to make decisions relating to his or her own medical treatment. Your parent should choose the agent, and it should be someone trusted.

When it's helpful:
Perhaps an accident or serious illness has caused your parent to be unable to speak for him or herself and expressing certain wishes. Coma and dementia are conditions that would make this power of attorney relevant. A physician may need you to make decisions about your parent's medication. You can also use the power of attorney to access your parent's patient information. Having a power of attorney for health care is useful, particularly in large families where they may be many differing opinions, because it can stave off uncertainty and disagreement on the matter.

How to set it up:
Before your parent suffers from any mental impairment, he or she meets with an estate planning or elder law attorney, who will prepare the form based on your parent's wishes. Although powers of attorney are readily available through online legal-service providers, meeting with an attorney ensures the document is properly prepared and reflects your parent's circumstances, so you don't encounter any roadblocks if the need to use the power of attorney ever arises.

Living Will

What it does:
Allows your parent to set out specific, detailed instructions regarding health and medical treatment in case of becoming incapacitated or being otherwise unable to express personal wishes. A living will designates a separate person with the authority to make decisions about your parent's medical and health care — including making sure medical treatment adheres to your parent's instructions. The agent should be someone your parent trusts to make decisions on his or her behalf.

When it's helpful:
A parent who has been diagnosed with a progressive impairment, such as Parkinson's disease, can ensure certain medical treatment is carried out or avoided in the event that the parent is no longer mentally capable of making an independent decision. A living will gives your parent greater control over medical and health care even after becoming mentally impaired. Your parent may want to avoid specific measures that would prolong his or her life, such as artificial nutrition or a ventilator; specific instructions can be included to the living will.

How to set it up:
Before your parent suffers from any mental impairment, he or she meets with an estate planning or elder law attorney, who will prepare the form based on your parent's wishes. Having an attorney prepare the document ensures the medical and health care decisions you make as the agent takes into account your parent's express directions. The attorney also ensures the document is properly prepared and signed, so you don't encounter any roadblocks if the need to use the living will ever arises.

Action Plan for Getting Your Parents' Finances in Order

Getting your parents to accept financial help is a big step. Now that you've squared that away and they're on the same page as you, how do you get started? Follow these practical steps for organizing their finances, and remember to document everything you do.

  • Gather your parents' personal information, making a record of where it's all kept.
  • Make a comprehensive list of all financial and investment accounts (including household utilities, credit card accounts and mortgage or rental information).
  • Collect all statements and documents for the financial and investment accounts.
  • Create a payment schedule for all bills (such as mortgage, telephone, property tax and homeowners' insurance).
  • Start submitting timely payments according to the payment schedule.
  • Take inventory of your parents' safe deposit box if they have one (and bring along a witness).
  • Locate any powers of attorney, living trust or other legal documents.
  • Determine whether their legal documents require updates.
  • Decide whether to hire professionals — attorney, financial planner or adviser — to assist with your parents' finances or legal documents.
  • Rethink your parents' investments — with or without the professional assistance of a financial planner or adviser — and update them to reflect your parents' circumstances and needs.
  • Consider whether becoming your parents' guardian is necessary.

Hiring a Professional: When Your Help Isn't Enough

Turning to outside professional help to ensure your parents get all their financial ducks in a row is a good idea. Professionals can help you understand your parents' position, make sure you've done things properly and alleviate some of the stress.

Estate planning attorney
An estate planning attorney focuses on legal documents that state who receives your property upon death, often in a way that minimizes taxes. An estate planning attorney also can prepare legal documents that give you authority to make financial or medical decisions on your parents' behalf. Documents such as the durable power of attorney and living will are highly useful — maybe even necessary — to facilitate proper and responsible management of your parents' affairs. This attorney also can help set up a care plan, provided your parents have adequate funds to pay for their own long-term care.

Elder law attorney
An elder law attorney also has the expertise to prepare powers of attorney, living wills and other related documents. Elder law attorneys are particularly versed in the legalities of common aging issues, such as caregiving, assisted living or in-home care. You might also consider seeking this attorney's advice if you believe your parents may not have sufficient funds to cover long-term living costs. An elder law attorney can help find creative, legal ways to cover the costs.

Financial planner or adviser
If your parents are blessed with wealth, turning to a financial planner or adviser to help manage their assets can take a heavy load off your mind. Your parents may have a variety of assets or complex investments that require knowledge from a financial expert. Depending on your parents' circumstances, the expert can help determine the appropriate risk level for their investments.

Government programs
If your parents are financially stretched, consider tapping into government programs for the elderly. Numerous resources exist, including:

  • Area Agency on Aging (city- or county-based elder programs, services and funding sources)
  • Administration on Aging (legal assistance and health insurance counseling)
  • Low Income Heat Energy Assistance Program (heat, gas and electricity bills payment assistance)
  • State-specific Telephone Assistance Program (phone service payment assistance)
  • State-specific prescription-assistance programs (assistance with prescription drug costs)

Experts' Advice on Managing Elderly Parents' Finances

  1. What can families do to more easily and effectively manage elderly parents' finances?
  2. How can children know it's time to gain legal control over their elderly loved one's assets?
  3. What does a durable power of attorney for finances accomplish?
  4. What legal documents should elderly parents have prepared?
  5. What suggestions would you give to families about deciding who will be primarily responsible for managing a parent's finances?
Miriam Whiteley, CFP®, RLP®, CeFT®
Miriam Whiteley, CFP®, RLP®, CeFT®Owner of LifeCraft Financial Planning
Renee Fry
Renee FryCEO of Gentreo
Jonathan D. Breeden
Jonathan D. BreedenAttorney at Law, Owner of Breeden Law Office
Brian Stormont
Brian StormontPartner & Financial Planner, CFP® at Insight Wealth Strategies
Delia Fernandez
Delia FernandezFounder and President at Fernandez Financial Advisory, LLC
Keith Fevurly
Keith FevurlyEsq., CFP (R), Senior Lecturer in Finance at Metropolitan State University of Denver
Martin Shenkman
Martin ShenkmanEstate Planning Attorney

Designate a Decision-Maker: Sharona Hoffman Q&A

  1. How do you begin talking with your elderly parents about coping with aging?
  2. What options are available for elderly parents who are independent but don't have family members nearby to help coordinate their bills and care?
  3. What documents should your elderly parents have prepared?
  4. When and why should adult children get involved in their parents' finances?
  5. What are the consequences of failing to legally prepare for when an aging parent develops dementia, Alzheimer's disease or other mental impairment?
Sharona Hoffman
Sharona HoffmanAuthor, Professor of Law and Bioethics at Case Western Reserve University School of Law

Preparing Allows You to Carry Out Parents' Wishes: June Schroeder Q&A

  1. How would you recommend adult children broach the subject of getting involved in their parents' finances?
  2. What warning signs have you seen that more involvement from family members is needed?
  3. Aside from the financial power of attorney, what other legal documents should you have?
  4. What else would you recommend to family members about getting children involved in their parents' finances?
June Schroeder
June SchroederFounder

Reader Resources

National Institute on Aging (NIA)
The NIA website offers information and resources for caregivers. It is part of the U.S. National Institutes of Health, through which it supports and conducts research — including in its role as the primary federal agency on Alzheimer's disease — to better understand aging and promote quality of life among the elderly.

Administration on Aging (AOA)
The AOA offers home- and community-based services, such as legal assistance, transportation, adult day care, caregiver support and health programs. This federal agency promotes the well-being and independence of older Americans by providing funds to governments, organizations and communities for programs consistent with its mission.

National Council on Aging (NCOA)
Access online tools and tips geared toward staying healthy and economically independent. You can gather information about senior issues, such as common sources of senior debt or chronic disease, from its website.

Centers for Disease Control and Prevention (CDC)
Tap into online resources and educational material covering advance care planning, cognitive health and impairment, older adult health studies and other relevant information.

American Association of Daily Money Managers
The AADMM is a national membership organization representing 700 individuals and businesses in the profession of daily money management.

About MoneyGeek Team

MoneyGeek Team headshot

The MoneyGeek editorial team has decades of combined experience in writing and publishing information about how people should manage money and credit. Our editors have worked with numerous publications including The Washington Post, The Daily Business Review, HealthDay and Time, Inc., and have won numerous journalism awards. Our talented team of contributing writers includes mortgage experts, veteran financial reporters and award-winning journalists. Learn more about the MoneyGeek team.