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What to Know About Commingling Money With an Aging Parent

Although commingling funds with an elderly parent may sound like a good idea, there are some hidden drawbacks you should consider.

What to Know About Commingling Money With an Aging Parent

Commingling funds with an elderly parent can be convenient to pay bills or monitor spending, but experts contend that such a measure could have dire consequences for an adult child who’s just trying to help their mom and dad hire a caregiver as they age. 

“If there’s a lawsuit against the adult child and their name is on their mother or dad’s savings or checking account, a litigant can garnish the assets of the parent’s money,” said Dan Casey, an investment adviser in Bloomfield Hills, Michigan.

Another downside to commingling funds with an aging parent is that any gifts or transfers of assets made within five years of the date of application for Medicaid are subject to penalties. Medicaid is a means-based program managed by the government that covers nursing home care and in-home health care.

“There’s a five-year look-back period, and withdrawals by anyone but the applicant for Medicaid may be considered gifts,” Casey told

“When an adult child mixes funds with an aging parent, he or she could end up paying — out of pocket — their parent’s assisted living or nursing home bill if the five-year look-back time frame isn’t approved by Medicaid,” said Leon LaBrecque, a financial adviser in Troy, Michigan.

According to Genworth, lodging in an assisted living residence can cost about $45,000 per year and home health care can cost $49,200 a year

Another reason to be wary of commingling funds is to prevent sibling rivalry from rearing its ugly head.

“There seems to always be one child who thinks their family member or sibling is taking advantage of the parent and using money that they shouldn’t when there’s commingling of funds,” Casey explained.

Instead, adult children can request that they be listed as their mother’s or father’s trusted contact person on their checking and brokerage accounts.

“Currently, I have clients over 65 years old sign an authorization form that allows me to release information so that I can talk to family members in the event they start to show signs of cognitive decline,” said Quentara Costa, a CFP in North Andover, Massachusetts.

By Feb. 5, 2018, financial professionals who are members of the Financial Industry Regulatory Authority (FINRA) will be required to at least request the name of and contact information for a trusted contact person for every customer’s account. The U.S. Securities and Exchange Commission approved the amendment to FINRA Rule 4512, called Customer Account Information, last year.

“More and more investors are turning 65 years old than ever before, which creates a demographic wave that’s forcing the issue, especially with one out of 10 seniors expecting to be stricken with some kind of dementia over the age of 65,” said John Beuerlein, a principal with financial services firm Edward Jones.

If commingling funds is absolutely necessary, LaBrecque, who is also an attorney, suggested keeping copious records of income and expenditures.

“You’ll want categories that include where money is spent, for what reason, how much is spent, and how much is income in the event there are accusations of mismanaging the senior family member’s assets,” he told

This article is for general informational purposes only, and any views, opinions, or recommendations of expressed in it are solely those of the author, and not, Inc. The information contained herein is general in nature and is not intended as legal, tax or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for your specific circumstances and may require consideration of other matters. Neither nor the author assumes any responsibility or liability with respect to use of any information contained herein.