It can be a tough topic to think about, and perhaps even more difficult to address, but it’s very likely there will come a day when your aging parents can no longer take care of their finances. However, with a sensitive approach and some planning, it is possible to help them transition without much turmoil. Here are a few steps to help make the process run smoothly.
Have A Conversation
The money talk is a tricky one, and it may even be some time before your parents need help, but it’s best to start the conversation early. The National Institute on Aging recommends that parents give advanced written consent to a designated family member so that person can discuss their personal affairs with key professionals like doctors, financial representatives and Medicare officials.
You may also want to consider asking them how their investments are going. Have they paid off their mortgage? Do they have a pension? The earlier you get a handle on their finances, the easier it is to protect them from fraud and other money-related missteps.
Organize their Financial and Legal Documents
It’s important to begin collecting and storing information like account numbers, and where their legal documents like birth certificates, insurance policies, deeds and wills are stored. Once you’ve found them, make sure everything is up to date.
If the process feels overwhelming, consider hiring a financial planner or CPA
to sort through the numbers, statements and policies. A professional can help you figure out how much your aging parents will need to sustain their way of life.
Take Over their Responsibilities
Before you start this process, make sure you’ve already taken inventory of their assets and expenses. This is a great time to reach out to a professional who specializes in financial services for the elderly. Consulting a professional can help you and your aging parents prioritize what should be paid and what can wait.
Take a closer look at their income, such as retirement or savings accounts. Make sure to switch those income streams over to direct deposit if possible. This will ensure your parents’ money still makes it into their accounts in the event of a medical emergency or accident.
Pick a Power Of Attorney
Power of attorney gives you power over your parent’s legal and financial matters if/when they become incapacitated. Executing a power of attorney with your parents ensures you have the legal authority to make important decisions on their behalf. A power of attorney is only effective while a person is alive. Remember, the person granted power of attorney must be willing to put in the time and effort to ensure all choices are made with the person’s best interest in mind.
Do you have more questions about helping your aging parents manage their finances while still maintaining their independence?
At Marcia L. Campbell, CPA we act as trusted professional fiduciaries for many of our clients. As licensed professionals, we understand the importance of knowing that your trust, estate, or conservatorship is being managed legally, ethically, and accurately. We act as caring and objective fiduciaries and client advocates.
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