Why financial education is essential for the aging spouse who can’t handle money

Women in traditional marriages, like many of our aging parents, often leave the earning and management of finances to their husbands. Some are in long-term unmarried relationships that have the same characteristic. The man took care of the money. We also know that statistically women tend to outlive their men. Where does that leave the aging woman (sometimes the man) who is unfamiliar with investing, accounting, taxes, and other issues essential to financial survival?

We are getting warning signs of the financial person in the family starting to decline in health. Perhaps we see memory loss. He forgets to pay income taxes. The IRS sends a notice and a fine is demanded for delay. Or bills are not paid on time. Late notices from utility companies or other normal recurring expenses arrive in the mail. Too often, families ignore these signs, dismissing them as “he’s just getting old” or “it only happened once.” They make other excuses. But these lapses are like red flags indicating declining skill in managing finances. Small bills are a problem. Large investments are also at risk when the judgment on money breaks down.

Whether your aging parents or other aging relatives have traditional relationships or not, someone is usually responsible for managing the family finances. The other person in the relationship usually lacks experience, understanding of many basic principles, and may be afraid to take on what feels uncomfortable due to a lack of knowledge.

Waiting to act until a crisis or the death of the declining elder managing the money is not smart. There are essential steps for the family to take, if you see the patriarch or responsible partner beginning to decline mentally and/or physically. Here are some proactive steps you need to take when you see the warning signs.

  1. Notice and act on the decline in mental acuity that you are likely to see with aging in some people. Know that warning signs should not be ignored. Commit to bridging the understanding gap between the spouse who handles the money and the one who is less knowledgeable about finances.
  2. Seek advice from the aging parent’s CFO to begin the process of financial education for the less knowledgeable spouse or partner. If they don’t have a financial advisor, it’s time to find one.
  3. Look for an advisor who has a legal and fiduciary duty to do what’s best for the client. At AgingParents.com, where we see this scenario occur regularly, we suggest using a Certified Financial Planner. They are bound to serve with fiduciary responsibility. Others in the field may not have this obligation and can do what is best for themnot the customer.
  4. Insist on starting the financial education process immediately, regardless of resistance. Someone will have to take the reins of money management, paying bills, taxes, bookkeeping, etc. Decisions will have to be made. They should be informed decisions, not random or based on guesswork.
  5. Be aware that inexperienced and vulnerable seniors who are suddenly faced with financial responsibilities they have never had before may be easily manipulated by unscrupulous people in financial services or anywhere. Work to protect your finances through the education of your aging parent.

Sometimes it just isn’t possible to provide financial education to the less experienced aging parent. Perhaps the spouse is also disabled. In these cases, the duly appointed successor trustee or person appointed with power of attorney must assume the financial management. If the cognitive decline occurs with the aging parent who handles the money in these cases, it’s time for that designated person to step in and take over. Financial disaster can occur if the warning signs are ignored.

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