Taking over your aging parents’ finances is not easy. But it’s something that can be handled in an organized, compassionate way. Here’s a roadmap that shows how to embrace it and do the right things for everyone involved.
Start the conversation early. Right now, your parents might not need any help. They might be handling everything just fine. But there will come a day when they can’t – and they’ll need your help. The National Institute on Aging recommends that parents give advance written consent to designated family members so they can discuss personal matters with doctors, financial representatives and Medicare officials. If you don’t have this, you’ll be faced with some road blocks. If you open the dialogue now, you’ll circumvent obstacles, as well as get a better feel for what their future needs might be.
Watch for the signs. If you don’t see your parents often, and even if you do, the signs of when you need to step in might be a bit hard to detect. That said, there are some things to look for that will indicate that their needs are changing.
Start slowly. Instead of charging in and announcing that you’re taking control, take baby steps. Maybe offer to write checks for them. Or offer to pay a bill or two. Gradual, gentle steps make them feel more at ease and comfortable with the new way of doing things.
Gather important documents. Things to collect are account numbers, credit card info, birth certificates, insurance policies, deeds and wills. Make sure they’re all current and up-to-date. Put them in a secure location so you’ll have easy access when you need them.
Consider power of attorney. This is key. Even if your parents don’t need your help at the moment, there will come a time when they will. There are several types of POA to consider: financial, medical or general decisions. Unlike written consent, this gives you legal authority to act on their behalf when they’re unable to.
Communicate what’s going on. Once you’ve started to manage your parents’ finances, keep your siblings, as well as theirs, in the loop. This way, if you’re unable to handle something, you can ask for backup support.
Keep your finances separate. It might be the easiest thing to do – mix your parents’ finances with yours – but in the long run, it’s not such a good idea. It can become a slippery slope. Granted, there may be times when your parents need a loan, but for the sake of clarity and personal record-keeping, it’s best not to jeopardize your own retirement and savings goals.
If you need more help, reach out to the National Alliance for Caregiving. As we all know, the circle of life is inevitable. But caring for your parents might be one of the most important things you’ll ever do – and chances are, you’ll want to get it right.
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