As our parents age and become unable to manage their lives as they once did, we face some uncomfortable decisions. There may come a time when we have to take away their car keys because they can no longer drive safely. We may need to hire help for their basic care at home. And we might need to take over their finances.
These are typically unpleasant transitions that everyone in the family dreads. However, compassion, open communication and advance planning can help them go more smoothly. Bringing this topic up in conversation could cause your parents to become a bit defensive. They might feel embarrassed about their oversights, worried about their decline and/or resentful that their privacy is potentially being violated.
When there are noticeable changes in the way your parents handle their finances, you’ll know it is time to step in and help. For example, they might forget to pay a bill, spend money in a way that’s out of character for them or give money away. Or you might see them falling prey to scams.
A delicate balance is required here between stepping in to ensure that your parents’ finances are protected and respecting their privacy and autonomy. You don’t want them to feel ambushed, but you also don’t want to step in too late, after a financial emergency has taken place.
Here are five ways to achieve that balance.
1. Begin money discussions while your parents are still healthy
Planning ahead helps you avoid making important decisions during a crisis. It also helps you become more involved in your parents’ finances on a gradual basis.
In many families, money is a somewhat taboo subject. Ease into some conversations about their financial situation, and try to normalize the idea of discussing money. You could start the process by telling your parents you are organizing your own important documents, just in case something happens to you or your spouse unexpectedly.
Then ask your parents questions about their financial situation. Ask them if they have a will and where it’s kept. Ask them if they have a safety-deposit box and if so, where it is located. Ask them if they have signed a power of attorney. Offer to introduce them to your financial advisor if they don’t work with one on their own. Tell them you are getting involved because you want to help ensure that they do not outlive their money.
Try to get their signatures on important documents while they are still mentally competent. If you wait until they are incapacitated, you might have to petition a court for legal guardianship.
2. Plan for long-term care
Long-term care insurance can be a significant help to families whose loved ones need assistance for long-term health issues. Getting this insurance in place before your parents may need it will give everyone involved an increased sense of security; it also will reduce the potential need for family members to provide care.
There are three primary ways a person can pay for the long-term care needed by a loved one:
- Self-pay: You or your parents can pay for long-term care out of pocket with savings, income or retirement funds. This often isn’t an option, however, because in some areas of the country, the cost of home care can exceed $100,000 per year, and the cost of nursing-facility care can exceed $200,000 per year.
- Long-term care insurance: This type of health insurance can pay for home care, assisted-living facilities and even nursing-home care, if the policy includes those benefits. These policies are expensive, but their cost can be less of a burden than having the family pay for or provide care.
- Long Term Care Medicaid: Medicaid is the largest payer of long-term care in the United States. There are significant eligibility requirements for this program, one of which is that patients cannot have many assets to qualify. The amounts vary by state.
For example, to qualify for Medicaid to cover nursing home care in Wisconsin, an individual generally must have no more than $2,000 in countable assets. If married, the community spouse (the spouse not in a nursing home) can retain up to half of the couple’s joint assets, with a maximum allowed amount that changes annually to account for inflation. In 2025, this maximum is $157,920. This Community Spouse Resource Allowance (CSRA) helps ensure the community spouse’s financial stability.
Medicare does not pay for long-term care, such as a nursing home, because it is health insurance and doesn’t cover custodial care (help with daily activities like bathing or dressing). Medicare may cover a limited, short-term period of skilled nursing care in a Medicare-certified nursing facility if a patient has had a qualifying hospital stay and needs daily skilled services from nurses or therapists.
Long-term care can be complicated and confusing. Thankfully, we have navigated these murky waters for many families and will be happy to explore options with you.
3. Organize important documents
Over time, find out details about your parents’ bank accounts, credit cards, income sources, debts, insurance policies, tax returns, vehicle titles, house deeds, monthly obligations and other important financial information. For any accounts they manage online, find out their usernames, passwords and security questions.
Having this information organized and stored securely in one place will save you time and stress, especially during an emergency. It will make your parents’ lives easier, too, while they are still managing their own finances.
At FORM Wealth, we provide data and safekeeping services for our clients and review the details with them regularly to ensure that all details are up-to-date.
4. Consider getting other family members involved
When aging parents begin to need help, disagreements about division of duties and about inheritances are commonplace, unfortunately. We’ve seen families torn apart because of an uneven burden of care, feelings of entitlement and other issues.
Once you see signs that it might be time to step in and help your parents with their finances, document every conversation and every financial transaction. Transparency goes a long way toward building trust. Consider calling a family meeting if you have siblings, and discuss your parents’ situation. Let everyone weigh in. Keeping everyone informed and engaged can help prevent disagreements.
Keep a running log of your financial involvement—what you paid, when, and why. Use email or written notes to document conversations with your parents and siblings, especially when discussing significant decisions such as selling assets or changing insurance policies. This can reduces the risk of future conflicts.
5. Seek help from professionals
Like most financial matters, we do not recommend a DIY approach to planning for your parents’ care. We work with other professionals, including tax attorneys and elder-care attorneys, to guide you through the process of assuming responsibility for their finances and care.
It’s never too early to plan, and doing so well in advance of the transition will make the process much smoother and less stressful.
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The planning you might need for your parents’ care ties in with the other services we provide, including retirement planning, estate planning, adult-care giving strategies. end-of-life-strategies and others. Please reach out to us of we can be of service in any way.
