6 Tips to Begin Managing and Protecting Your Parents’ Finances

If your parents haven’t already set up autopay for recurring bills, suggest that this can be a great time-saver that can guard against late payments or slipups. Offer to sit down at the computer with them and set up relevant payments.

Similarly, ask your parents if they receive any payments with a paper check, such as pension payments or required minimum distributions (RMDs) from a retirement investment account. Explain how much safer and easier it can be to have checks deposited directly to their bank account, and that you can help them make the switch.

If your parents haven’t yet switched over to electronic financial statements, talk to them about the value of going paperless. It’s reliable, and typically safer – no lost mail or mail account numbers in the wrong hands. Offer to have the e-statements sent to you if they aren’t very active online.

Getting added to your parents’ bank account ensures that you’ll have quick and easy access if an illness or injury makes it hard for a parent to manage things. It’s better to do this sooner, rather than later, as the change might require you to visit the bank together.

Talk to your parent about whether they’d let you receive text or email alerts for the account. Make it clear that you’re not looking to micromanage their spending; you simply want to make sure their bills are paid on time. Reassure them that you’ll take on the job of being their fraud detector by setting up alerts for any debits exceeding a certain dollar amount.

A lesser-known feature of credit cards is that the account owner (your parent) can add someone they trust (you!) as an account manager. This will allow you to have access to the account, and if there is ever a problem – say, a suspicious charge – you will be authorized to work things out with customer service, which any parent should be grateful for.

You can set this up over the phone, with both you and your parent on the line, as they might need to answer some security questions. If they aren’t able to do that, you will likely need to first obtain a durable financial power of attorney (more on this later) and then contact the card issuer with your request to have account access.

Here, too, setting up alerts to your email or smartphone is a great way to catch any worrisome charges.

Older adults are often the target of telephone and email scams.¹ To protect your parents against falling victim to fraud of this kind, a good starting point is to register with the National Do Not Call Registry. Registering can help slow down the influx of robocalls, but it isn’t a perfect solution; some spam – and scam – calls are likely to get through. The same goes for email, despite automatic spam filtering.

Respectfully talk to your parents about never giving any information to someone who calls out of the blue. Even if the caller says they are from their bank or other known account, the advice for the parent is to politely hang up and then call customer service directly, or log in to their legitimate online account, to refute or verify the caller’s claim. Or you might suggest that your parents use this script: “You will need to speak with my son/daughter. Please give me the best phone number that they can reach you at.” And then they are to hang up, and let you know about the call.

Instruct them to do the same with emails. Tell them never to reply to an unsolicited email requesting sensitive financial information – it could be a phishing attempt. Suggest that your parents forward any questionable emails to you.

For more security tips, read “How to Protect Against Senior Fraud.”

For many accounts, you won’t be able to gain access or initiate transactions unless you can prove your parent has given you permission to act on their behalf. To do so, you’ll need a durable financial power of attorney, a written authorization that allows you to handle your parents’ finances if they are ever unable to do so. (This is different from a health care power of attorney – sometimes referred to as a health care proxy – where a trusted family member or friend is designated as a person’s advocate in discussions with the medical team, if they ever become incapacitated.)

If your parents tell you they already have the power of attorney set up, ask who each other’s designated representative is. If they have appointed each other as their respective agent, you may want to suggest they reconsider. Twenty, 30, or 40 years ago they would have been a logical choice for each other. As they are now both much older, it may be best to appoint an adult child. In any case, it’s wise to consult with an expert, such as an elder law or estate planning attorney.