When and how to help your elderly parents financially

As you become an adult, there may come a time when you realize that your elderly parents or older relatives may be able to help you manage your finances.

Experts say the transition can be difficult, depending on family relationships and the specifics of the situation.

“There are two potentially contradictory things: adult children are worried about safety and security, and parents are worried about autonomy and independence,” said Lisa Kirchenbauer, a certified financial planner and founding partner and senior advisor at Omega Wealth Management in Arlington, Virginia.

But as America’s population ages and people live longer, adult children may want to lay the foundation for support long before intervention is needed, experts say.

According to the Census Bureau, the number of people 65 and older in the United States will exceed 61.2 million in 2024, an increase of 13% from 54.2 million in 2020. According to 2024 data from the Centers for Disease Control and Prevention, once a person reaches age 65, life expectancy for women will increase by an additional 20.8 years from 19 years in 2000, and for men by 18.4 years from 16 years in 2000.

This age group is the main target of scammers. Last year, adults 60 and older reported $2.4 billion in fraud to the Federal Trade Commission, up from $1.9 billion in 2023 and $600 million in 2020. Fraud involving personal losses of $100,000 or more accounted for a total of $1.6 billion.

Older Americans are also more likely to need some type of care. Of the estimated 63 million caregivers in the United States, whose duties may include helping with financial management, 48% support individuals age 75 and older, according to a 2025 joint report from AARP and the National Alliance for Caregiving, a nonprofit advocacy and research organization focused on caregivers. A further 38% care for people between the ages of 50 and 74. Three in five caregivers are women, the report shows.

At the same time, aging is not uniform. Many people remain healthy and independent late in life, making it difficult to predict what help, if any, a loved one will ultimately need.

Nevertheless, says Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Fla., and a member of the CNBC Financial Advisors Council, “families should discuss the possibility of financial care years before the need arises.”

Experts say it’s best to use a sensitive approach to conversations about financial care.

“I sometimes coach clients to use us as an excuse to say, ‘I just met with a financial planner about estate planning and financial organization, and I’d like to know how you organize your finances and when was the last time you updated your estate plan,'” Kirchenbauer said.

“You really want to be humble and start understanding how they manage their finances and where their important documents are,” she says. “It’s a great step in the right direction.”

You should also aim to find out if your parents or family members work with a professional, such as a financial advisor or accountant, and whether meeting with one would make sense for you, Kirchenbauer says.

Another important thing, she said, is knowing how to access your user ID and password when doing banking or paying bills online.

Overall, Kirchenbauer said to start gently to understand their process. “But if you act too quickly and aggressively, they can shut you down,” she said.

Mr McClanahan said any transition should be done on the parents’ terms “unless they face issues that put them at risk of fraud or abuse”. “We start by watching what the person is doing, then we help them manage their finances, and then we take over the whole process.”

CFP Vincent DeCrow, founder and wealth advisor at RISE Investments in Chicago, said some warning signs that it’s time to take over may be cognitive or practical. In addition to being a victim of financial fraud, these triggers can include “unusual or impulsive purchases, confusion about your finances, and collection notices and late fees associated with unpaid bills,” DeCrow said.

If you want to take control of paying your bills and managing your financial accounts, there are ways to make that happen, as long as your parents are compliant.

The first is to be given financial power of attorney. This is generally considered an important estate planning document, and some seniors already have one in place.

If a parent decides that a privilege should be granted, it can be configured to be used immediately or to take effect when a predefined event occurs, such as cognitive impairment, Dekrow said. It also said the document “must be developed before significant cognitive decline occurs.”

Experts say it’s worth checking whether the financial institution where your parents have an account requires them to fill out certain legal forms to access the account. Some investment custodians may not recognize a power of attorney unless certain documentation is formally attached to the account.

Alternatively, your parents’ bank may offer a so-called convenience or proxy account. This allows you to access your parents’ accounts even if you are not a co-owner.

Your parents may also be able to add you as a co-owner to their account, but there are several reasons to be cautious, experts say.

Once they’re added to your account, “they legally become yours,” says CFP Dinon Hughes, a Portsmouth, N.H., financial consultant and partner at Nvest Financial.

“Yes, that means you have access to the funds, but it also means that your creditors and potential future lawsuits may try to get their hands on those funds as well,” Hughes said.

Also, after your parent passes away, the account legally becomes yours. “If there are other siblings in the picture, this can cause division,” Hughes says.

Additionally, if you are named as the owner of an asset that you are supposed to inherit (for example, a house or an investment in a brokerage account), you may miss out on so-called step-up basis. This essentially resets the value of the inherited property to its fair market value at the time of the original owner’s death. In this case, if you sell the inherited property, you won’t have to pay capital gains tax on the difference in value between when your parents bought the house and when they passed away.

However, “if they are added to your account before your death, they will be treated as equal owners,” Hughes said. “So the brokerage account that used to belong to your father will add you to his final months, but you’ll only get a half step up in basis instead of a full step up.”

Hughes said granting a financial power of attorney is usually the best solution. Or, if they have assets in a trust, they can name you as trustee.