Nothing really prepares you for the day when you’re sitting across from your elderly parents, trying to piece together a financial picture they’ve probably kept private their entire lives. For many adult children, that conversation often comes too late, sparked by a diagnosis that changes everything.
Mine came when we found out that my 86-year-old father had dementia and I lived 200 miles from my parents. I am an only child. And she had no idea if they had enough money to pay for a home health aide and memory care.
I knew that my father had a pension, that he and my mother collected Social Security, and that they had a generous health insurance policy. I didn’t know anything else.
Finally, my mother revealed something important: she had managed to save half a million dollars. When my parents sold their house on Long Island and moved to a 55+ community in New Jersey in 1998, she noticed that her tax bill had plummeted. He opened a money market account and saved the difference every month.
His financial discipline blew me away. I stopped worrying about paying for their care and started planning for them to move to a senior community a mile from my house. But I skipped the most important step. Instead of asking my mother what she wanted, I told her what I 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 to be solved.
“Lead with love, not logistics,” said Jessica Smith, co-founder and advisor at Vitality Wealth in Boise, Idaho. Before getting into paperwork and bank accounts, ask your parents what they want and how you can support them, she said.
Here are five ways adult children can prepare to help manage their parents’ finances, regardless of how much their parents have been able to save.
Parents often hesitate to talk to their adult children about their finances, but that’s not always due to mistrust or secrecy, said Ashley Quamme, a financial therapist and founder of Beyond the Plan in Augusta, Georgia. “The underlying thought is often: ‘If I admit that I need help, then I admit that I am rejecting it.’”
However, it is essential to start these conversations before a crisis hits, especially if a change is noted in a parent’s health. “I’ve seen many families try to implement this when it’s too late, and it becomes much more difficult and expensive to properly represent their loved ones,” said Ben Smith, founder of Cove Financial Planning in Wayzata, Minnesota.
Having that conversation can be challenging, and often the burden of expanding the discussion falls on adult children, said Cathleen Tobin, owner of Moonbridge Financial Design in Rhinebeck, New York.
Ms. Tobin, 53, and her 92-year-old father, Ed Tobin, began talking about their finances about eight years ago after a national retailer announced a major breach of customer data. Mrs. Tobin took the news as an opportunity to ask her father if he had frozen credit and offered to show him how to get it.
“Helping your parents in small ways builds trust and normalizes your involvement,” she said.
Their conversations deepened in 2021 after Tobin fell for an online financial scam. After that incident, he agreed to share his account passwords with her so they could both keep an eye out for unusual transactions.
The ways you help will gradually increase, Ms Smith said. Initially, your parents may continue to manage their own finances while you check in occasionally. When you notice that they are finding it increasingly difficult to manage, suggest that they work on their finances together, he said. When they find it frustrating to direct things on their own, offer to take on the task while still giving them control by saying, “I’ll take care of this for you and report back to you.”
2. Understand your budget
Once your parents are willing to talk, 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, partner at Nvest Financial in Portsmouth, NH.
Print the last 12 months of statements for your accounts and credit cards to determine what money is coming in, how much is going out and which bills are paid monthly, quarterly or annually, Ms. Tobin said. Find out if your parents still receive paper pension and Social Security checks or if the funds are directly deposited.
Investigating your parents’ affairs may reveal that they need financial help. If that’s the case and you can afford to cover some bills, it’s important to decide how you’ll contribute, Ms. Smith said. Set a monthly maximum and be clear about what you’ll pay, maybe just necessities like groceries, prescriptions, and medical copays.
Don’t lose sight of your own financial goals, Smith said. “You don’t want to jeopardize your own retirement.”
3. Get account access
When your parents find it more difficult to manage their finances, ask to become an authorized user of their accounts. This will allow you to deposit, withdraw and transfer funds; pay bills; and create a unique user ID and password to manage your accounts, Ms. Smith said. However, when your parents die, the accounts will default to the listed beneficiary or heir named in the will or they could end up in a court-supervised legal state called probate. (This may take many months to complete.)
Adult children often pressure their parents to add them as co-owners of every possible account (bank accounts, utility bills, credit cards, and sometimes even their investment accounts and mortgages), but that has serious implications, Hughes warned. He recommends becoming an authorized user rather than a co-owner because once you are added to these accounts, they legally become yours. That means his creditors or anyone who sues him can tap into those assets, Hughes said.
Becoming a joint owner of an account also has tax consequences. If your parent’s account is worth more than $19,000, which is the annual gift exclusion set by the Internal Revenue Service, you must file a gift tax return, which could affect your tax rate, Mr. Smith said.
4. Ask About Durable Power of Attorney
A durable power of attorney is a legal document that empowers a trusted person to make financial and healthcare decisions on your behalf if you are alive but incapacitated. Most people are familiar with a power of attorney for health care, or POA, because it is often done when writing a will, but many people don’t realize that a power of attorney for health care does not allow you to make financial decisions for another person, Mr. Smith said. To do this, you need a durable power of attorney.
A 2025 Family and Finance study by Fidelity found that only 41 percent of parents anticipate their children will have financial power. Most spouses name each other as POA and do not designate a backup, Hughes said. He strongly recommends naming at least two people as POA, because if only one person is named and that person dies, that document becomes null and void. In that case, the original document must be updated, signed and notarized. And if you are incapacitated, he said, the courts may have to intervene to appoint a legal guardian, which could take time and money.
If your parents are reluctant to allow you to invoke the durable power of attorney, their attorney can keep the physical document until its use is necessary, Tobin said.
5. Verify that wills and beneficiaries are up to date
The Fidelity study found that only 70 percent of parents feel confident in their will and estate plan. Your parents may have created a plan a decade ago and are no longer sure it’s the right plan, 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 is important that they name a beneficiary for each account, such as 401(k)s and brokerage accounts, Ms. Smith said. Otherwise, that account will go into probate and the family won’t be able to use that money to pay debts or funeral costs for six to 18 months, he said. Reassure your parents that you don’t need to know who is listed as the beneficiary, he said, just that the beneficiaries are designated.
Being the manager of your parents’ money can be uncomfortable, Quamme said. You may be lamenting your parents’ changing role or worried about making a mistake, she said. “I think reminding ourselves and our parents that ‘I’m still your daughter, I’m just helping with this part right now’ can be helpful for parents to listen and for us to hear ourselves say it.”
