Depending on the age and/or health of your parent(s), the parent/child role reversal may have just begun or may be in full swing. Things that used to be easy — making health care decisions, running errands, taking care of their home, handling finances — become a challenge. Eventually, you realize someone needs to step in and help.
Lending a hand around the house is one thing. Taking over a parent's finances is another matter entirely.
Whether you face this dilemma now or can see it coming, these tips will help you prepare.
Knowing when a parent needs financial help
The process happens so slowly that it may be easy to miss the signs your parent needs help with money.
However, telltale signs that your parent needs help may not have anything to do with money at all. Problems with memory, difficulty keeping the house clean, or subtle personality changes could all be signals their finances are beyond their control.
Starting the conversation
Parents who begin to need help also want to feel in control. That's why it's important to approach the subject of parental finances with care. Ask if there are ways you can help, like balancing the checkbook. That keeps the parent in the driver's seat while giving you a view of their financial situation.
Keep family members informed
Once you realize your parent may need help, get your siblings involved. Keeping siblings in the loop also ensures transparency, minimizes misunderstandings, and helps prevent family squabbles.
Look into legal documents
If your parent hasn't done so already, encourage him or her to set up a durable power of attorney. This authorizes another individual to make health care, business, and financial decisions on the parent's behalf.
An updated will can also dramatically simplify financial matters when he or she passes away.
Discover the details
Ask the following:
You and your family will probably face several critical questions as you become more involved with your parent's finances. That's when a financial professional can help.
Principal Funds also has several planning resources, as well.
More from Principal Funds...
Investors should carefully consider a fund's investment objectives, risks, charges, and expenses prior to investing. A prospectus, or summary prospectus if available, containing this and other information can be obtained by contacting a financial professional, visiting principalfunds.com, or calling 800-222-5852. Read the prospectus carefully before investing.
A mutual fund's share price and investment return will vary with market conditions, and the principal value of an investment when you sell your shares may be more or less than the original cost.
Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc., member of the Principal Financial Group®. Principal Funds Distributor, Principal Shareholder Services, Principal Management Corporation and its affiliates, and Principal Funds, Inc. are collectively referred to as Principal Funds.