How Do You Take Over Your Elderly Parents’ Estate?

Seeing your parents age is never easy, especially if they reach a point where they can't handle their finances or other important decisions. Estate planning for elderly parents is complex with lots of legal considerations, and it becomes even more difficult if your parents aren't cognitively able to help.

Here’s how to take over your elderly parents' estate to help keep their finances in order.

How Do You Know It's Time to Take Control of Your Parents' Finances?

There's not always an easy answer or specific time when you should take over your parents' finances. However, you'll likely see some little signs that it's time to step in — or at least explore your legal options. Being prepared before you need to take over makes the transition easier. Some warning signs that your parents may need help with estate planning and finances include:

• Falling behind on bills or having bills sent to collections, especially if they have the money to pay them
• Mail, particularly bills, piling up and not getting opened
• Being short on money when they should have enough
• New purchases, especially expensive items or things they don't need
• Losing cash or forgetting they have it
• Unusual purchases
• General behavioral changes
• Signs of dementia or cognitive decline that could interfere with their ability to handle finances
• Falling for financial scams

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How Do You Have That Conversation With Them?

Talking about money is never an easy topic. It's often considered a taboo subject. Yet those difficult financial discussions are crucial when your parents need your help. If your parents are still handling their finances competently on their own, start a conversation now about what might happen in the future and how you might need to step in and help.

If you've already reached the point of needing to take over your parents' estate, use these tips to help make the conversation easier:

• Plan ahead: You know your parents best and can anticipate how they might react to the conversation. Prepare for those potential arguments and plan how you need to approach the topic to be sensitive to their feelings.
• Consider their point of view: Imagine your kids telling you they don't think you can handle your finances on your own. It's not an easy thing to hear, and it can feel like you're taking their independence away. Be sensitive to what you're about to tell them, and let them express their feelings without getting defensive or angry.
• Choose the right time: Find a quiet, private time to talk finances. It's best when everyone is calm and rested.
• Start small: Consider suggesting just the first step with your parents. That might be reviewing their estate planning documents, for example. You can work up to more involvement in their finances once you initiate the process. However, if your parents are already in financial trouble or showing significant dementia, you may need to move more quickly.
• Express your concern: Let your parents know you want to help them and not just control their money.
• Give examples: If you're not sure how to start the conversation, consider sharing a story about someone you know who had to deal with a difficult estate or financial situation involving their parents. You could also share a news story about a senior being the victim of a scam. These stories can lead to your conversation about helping them with their finances.

What Are Some Gradual Changes You Can Make?

You can start by helping your elderly parents get their financial documents in order. Help them sort through the mail and identify bills they still need to pay. This helps them get things paid and helps you get a look at their financial situation to see how dire it is. Some other gradual changes you can make include:

• Updating estate documents: Schedule a time to meet with your parents' lawyer to make sure their estate documents are in order. Help them make changes if needed and get legal advice from their attorney.
• Adding yourself to financial accounts: Having your name on bank accounts and other major financial accounts lets you help them out as needed. You can also get more information about those accounts.
• Simplifying their finances: Help your parents streamline their finances before you take over fully. You might set bills up for automatic payments or have their income switched to direct deposit. This still gives them control, but it cleans up their financial situation.
• Getting their input: Ask them what their financial goals are and what struggles they're having. This can help you ease into taking more control.

Legally, What Are the Steps You Need to Take?

If your parents agree to let you take over your finances, you can start helping them immediately. However, making the move to control their finances legally might be necessary. The most common way to do that is to get power of attorney. This legal agreement gives you the power to make decisions on your parents' behalf. It can cover finances as well as medical care and property decisions, but be aware that some states may require separate documents for medical care and financial powers.

There are different types of power of attorney, including:

• General power of attorney: This option gives you the power to make decisions in all relevant areas of your parents' life, including finances.
• Limited power of attorney: Limited power of attorney specifies a particular area where you're allowed to make decisions. It can also be limited to a certain amount of time.
• Durable power of attorney: In the case of elderly parents who need help, durable power of attorney is often the best option. This type stays in effect until your parents pass away or revoke your rights. Non-durable power of attorney ends if the person becomes incapacitated and is often used if the decision-making power is limited to a certain event or time period.
• Springing power of attorney: If your parents are still able to handle their decisions now, you might consider springing power of attorney. It doesn't go into effect until the specified conditions are met. This could be a specific date or the health condition of your parents. For example, it might go into effect when your parents have lost the cognitive ability to handle their finances or can no longer take care of themselves independently. You typically need two different doctors to sign to indicate a medical condition has occurred.

The laws often vary by state, so the processes and requirements can be different based on where you live. The typical process involves the following:

• Fill out a power of attorney document that specifies the parties involved, the type of power of attorney and the powers being delegated. The required fields can vary by state.
• Have the form notarized. While not all states require it to be notarized, it can make it easier to use the power of attorney if it is.
• Record or file the power of attorney document, if required. Some areas might require you to record the document with the county or file it with the court or a government office.

An attorney practicing family law can be a good resource for completing the power of attorney process. They can ensure you use and complete the correct documents for your state, and they can help you decide what type is best for your situation.

Handling More Complex Situations

Sometimes talking to your parents and getting a power of attorney in place won’t sufficiently address the situation. This can happen if:

• Your parents are already experiencing significant dementia or health problems and aren’t able to understand what’s happening.
• There is conflict between you and another interested party, such as one of your siblings or a stepparent.
• Your parents won’t agree to your help.
• A power of attorney won’t be sufficient for addressing the problem.

In these cases, you may need to involve a family or probate court. You may wish to speak with an attorney who can advise you about the laws in your area and how to best handle the specifics of your situation. Taking the wrong steps can complicate the situation.