Nothing really prepares you for the day you sit across from your aging parents and try to piece together a financial picture that they’ve probably spent a lifetime trying to keep private. For many adult children, that conversation often comes too late, triggered by a diagnosis that changes everything.
Mine came when we were told my 86 year old father had dementia and I was living 200 miles away from my parents. I am an only child. And I had no idea if they had enough money to pay for a home aide and memory care.
I knew my father had a pension, that he and my mother collected Social Security, and that they had generous health insurance. I knew no more.
Finally, my mother revealed something big: She had managed to siphon off half a million dollars. When my parents sold their house on Long Island and moved to a 55-plus community in New Jersey in 1998, she realized their tax bill had taken a dive. She opened a money market account and saved the difference each month.
Her financial discipline struck me. I stopped worrying about paying for their care and started planning for them to move to a senior living community a mile from my home. But I skipped the most important step. Instead of asking my mother what she wanted, I told her what she needed. That mistake closed our conversation.
Experts who work with aging parents and their adult children say this is one of the most common mistakes children make: treating their parent’s crisis as a problem that needs to be solved.
“Lead with love, not logistics,” said Jessica Smith, a co-founder and advisor at Vitality Wealth in Boise, Idaho. Before you get into paperwork and bank accounts, ask your parents what they want and how you can support them, she said.
Here are five ways grown children can prepare to help manage their parents’ finances, regardless of how much the parents have been able to save.
Parents are often hesitant to talk to their grown children about their finances, but it’s not always because of mistrust or secrecy, said Ashley Quamme, a financial therapist and founder of Beyond the Plan in Augusta, Ga. “The underlying thought is often: ‘If I admit that I need help, then I admit that I refuse’.”
Still, it’s important to start these conversations before a crisis hits, especially if you notice a change in a parent’s health. “I’ve seen too many families try to get this settled when it’s too late and it becomes much more difficult and expensive to properly represent their loved ones,” said Ben Smith, the founder of Cove Financial Planning in Wayzata, Minn.
Having that conversation can be challenging, and it’s often grown children who need to expand the discussion, said Cathleen Tobin, the owner of Moonbridge Financial Design in Rhinebeck, NY
Mrs. Tobin, 53, and her 92-year-old father, Ed Tobin, started talking about her finances about eight years ago after a national retailer announced a major customer data breach. Mrs. Tobin used the news as an opportunity to ask his father if he had a credit line and offered to show him how to get one.
“Helping your parents in small ways builds trust and normalizes your commitment,” she said.
Their talks deepened in 2021 after Mr. Tobin fell for an online financial scam. After this incident, he agreed to share his account passwords with her so they could both watch for unusual transactions.
The ways you help will gradually increase, said Ms. Smith. At first, your parents may want to continue managing their own finances while you check in occasionally. When you notice it’s getting harder for them to manage, suggest working through their finances together, she said. When it gets frustrating for them to manage things on their own, offer to take on the task while still giving them control by saying, “I’ll handle this for you and report back.”
2. Understand their budget
When your parents are open to talking, find out where they bank and how they pay their bills. Don’t be surprised if they still receive paper statements and pay bills by check, said Dinon Hughes, a partner at Nvest Financial in Portsmouth, NH
Print the last 12 months of statements from their accounts and credit cards to determine what money is coming in, how much is going out and what bills are being paid monthly, quarterly or annually, Ms. Tobin. Find out if your parents still receive paper pensions and Social Security checks, or if the funds are directly deposited.
If you look at your parents’ circumstances, it may reveal that they need financial help. If so, and you can afford to cover some bills, it’s important to decide how you want to contribute, Ms. Smith said. Set a monthly maximum and be clear about what you’ll pay for — maybe just necessities like groceries, prescriptions and medical co-pays.
Don’t lose sight of your own financial goals, said Mr. Smith. “You don’t want to jeopardize your own retirement.”
3. Get account access
When it becomes more difficult for your parents to manage their finances, ask to become an authorized user of their accounts. This allows you to deposit, withdraw and transfer money; pay bills; and create a unique user ID and password to manage their accounts, Ms. Smith said. However, when your parents die, the accounts will default to either the named beneficiary or the heir named in the will, or may end up in a court-supervised legal status called probate. (This can take many months to play out.)
Grown children often pressure their parents to add them as a joint owner to every possible account – bank accounts, utility bills, credit cards and sometimes even their investment accounts and mortgages – but this has serious consequences, Mr Hughes warned. He recommends becoming an authorized user instead of a co-owner because once you’re added to these accounts, they legally become yours. That means your creditors or anyone who sues you can tap into those assets, Mr Hughes said.
Becoming a joint account holder also has tax implications. If your parent’s account has a value greater than $19,000, which is the annual gift exclusion set by the Internal Revenue Service, you must file a gift return, which could affect your tax rate, Mr. Smith.
4. Ask about durable power of attorney
A durable power of attorney is a legal document that authorizes a trusted person to make financial and health care decisions on your behalf if you are alive but incapacitated. Most people are familiar with a health care power of attorney, or POA, because it’s often done when you make a will, but many people don’t realize that a health care POA doesn’t allow you to make financial decisions for someone else, said Mr. Smith. For that you need a durable power of attorney.
A 2025 Family and Finance Survey by Fidelity found that only 41 percent of parents expect their children to have financial power of attorney. Most spouses name each other as POA and do not designate a backup, Mr. Hughes. He strongly recommends naming at least two people as the POA, because if only one person is named and that person dies, the document becomes invalid. In that case, the original document must be updated, signed and notarized. And if you’re incapacitated, he said, the courts may have to step in to appoint a legal guardian — which can take time and money.
If your parents are reluctant to let you invoke the durable power of attorney, their attorney can keep the physical document until needed, Tobin said.
5. Verify that wills and beneficiaries are current
The Fidelity survey found that only 70 percent of parents feel confident about their will and estate plan. Your parents may have made a plan a decade ago and aren’t sure it’s the right plan anymore because there are new spouses and grandchildren, said Ryan Viktorin, a certified financial planner and financial consultant at Fidelity Investments.
Even if parents have a will, it’s important that they name a beneficiary for each account, such as 401(k)s and brokerage accounts, Ms. Smith. Otherwise, that account would go into probate and the family wouldn’t be able to use that money to pay debts or funeral costs for six to 18 months, she said. Reassure your parents that you don’t need to know who is listed as a beneficiary, she said, just that beneficiaries are designated.
Being your parents’ money manager can be uncomfortable, Ms. Quamme said. You might be grieving your parents’ changing role, or you might be afraid you’ll make a mistake, she said. “I think reminding ourselves and our parent that ‘I’m still your daughter, I’m just helping with this part right now’ can be helpful for the parent to hear as well as hearing ourselves say it.”
