Why Financial Education Is Essential For The Aging Spouse Who Does Not Manage The Money

Women in traditional marriages, as many of our aging parents are, frequently leave the earning and directing of finances to their husbands. Some are in long-term, unmarried relationships that have the same feature. The man handled the money. We also know that statistically, women tend to outlive their men. Where does that leave the aging woman (sometimes man) who is unfamiliar with investing, accounting, taxes and other matters critical to financial survival?

We get warning signs of the financial person in the family beginning to decline in health. Perhaps one sees memory loss. He forgets to pay the income taxes. The IRS sends notice and a fine is demanded for being late. Or the bills are not getting 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 of declining competency to handle finances. The smaller bills are one problem. The large investments are also at risk when judgment about money spirals downward.

No matter whether your aging parents or other aging loved ones are in traditional relationships or not, someone is usually responsible for handling the family finances. The other person in the relationship typically lacks experience, understanding of many basics and may be fearful of taking on what feels uncomfortable because of lack of knowledge.

Waiting to take action until a crisis, or the passing of the declining elder who managed the money is not smart. There are essential steps that the family should take, if you see the patriarch or responsible partner beginning to decline mentally and/or physically. Here are some proactive things you need to do when you see the warning signs.

1. Notice and act on the decline in mental sharpness you are likely to see with aging in some people. Recognize that the warning signs must not be ignored. Commit to addressing the gap in understanding between the money-handling spouse and the one who is less informed about finances.
2. Seek the advice of the aging parents’ financial manager to begin the financial education process for the less knowledgeable spouse or partner. If they do not have a financial advisor, it’s time to get one.
3. Seek an advisor who has a legal, fiduciary obligation to do what is best for the client. At AgingParents.com, where we see this scenario play out regularly, we suggest getting a Certified Financial Planner. They are obligated to serve with fiduciary responsibility. Others in the field may not have that obligation and can do what is best for them, not the client.
4. Insist on beginning the financial education process right away, regardless of resistance. Someone will need to take the reins of money management, bill paying, taxes, accounting and the like. Decisions will need to be made. They need to be informed decisions, not random or based on guesswork.
5. Know that inexperienced, vulnerable elders who are suddenly faced with financial responsibility they’ve never had before can be easily manipulated by unscrupulous people in financial services or anywhere. Work on keeping finances safe with education for your aging parent.

Sometimes it is just not feasible to offer financial education to the less experienced aging parent. Maybe the spouse is impaired too. In those cases, the duly appointed successor trustee or person appointed with Power of Attorney must take on the financial management. If cognitive decline is happening with the money managing aging parent in those cases, it’s time for that appointed person to step up and take over. Financial disaster can result if warning signs are ignored.