There may come a time when our elderly parents, who we thought were capable of doing anything and everything, need our help to manage their affairs. As we get older, it can get harder for our brains to process information. Filling out forms becomes a nightmare, and understanding directions or instructions is very confusing, especially if they are in writing. The signs of inability to cope include piles of mail that haven't been attended to, confusion about whether bills have been paid or not, inability to recall where money is invested and how much is invested and in some cases giving money away inappropriately.
Simplicity is the key to managing financial affairs late in life. Keep bank accounts to a minimum and make arrangements for bills to be paid by direct debit or automatic payment. It is a good idea to help older people sort out their paperwork, deciding what to keep and what to throw out, making sure important correspondence is dealt with in a timely manner and ensuring vital documents such as wills and insurance policies are up-to-date and stored safely.
Conversations about living arrangements are important as many retirement villages now have lengthy waiting lists, so it pays to think ahead. While they are still healthy, find out what your parents preferences are for care in the event that their health deteriorates. A lawyer can prepare enduring powers of attorney, which come into effect with loss of mental capacity, to enable you to take care of financial affairs and personal welfare for your parents when the time comes.
The aged should be treated with dignity, respect and tact. There is a balancing act between allowing them do as much as they can while they are able and stepping in to help avoid a financial crisis.
Liz Koh is an authorised financial adviser.
