No one wants to think about it but it’s a fact of life. Your parents will get old. We all will. When it becomes necessary to take over your parents’ finances, high levels of stress most often accompany the situation. The best strategy is to get a head of the problem by talking to your parents and creating a map of their finances in case of an emergency. Often times, illness is sudden like a stroke, heart attack or cancer, and preemptive action is not an option. If that’s the case, take a deep breath and walk through the process one step at a time.
The first step is a fact-finding mission. Grab your magnifying glass and begin locating ALL of your parents’ accounts. Not just bank accounts. You’ll need to wrangle all of their retirement, investments, credit cards and any other bills. If you’re lucky, your parents or their financial advisor has meticulously filed all of their statements and financial information. If not, you could be in for a long search.
Once you’ve got your hands on all of the necessary information, sort through it. Separate all the paper work into easily distinguishable categories and sort by name. Some of the largest categories will be bank statements, investment statements and lastly bills. The bills should be your first priority. There is always a chance that your parents may have missed a few payments due to their illness or general forgetfulness that comes with an aging mind. Late charges can add up. Knock those out as soon as possible. If you already have power of attorney, then you are ahead of the game. If not, you may have to pay these bills out of your own pocket and get reimbursed from your parents’ accounts later.
Now that we have mentioned power of attorney, that’s where we’re headed next. Power of attorney allows you to access all of the financial accounts you will need to maintain your aging parents’ affairs. There are different types of power of attorney and it’s best to reach out to an attorney for guidance regarding which best fits your situation. Alabama Legal Help offers an easy to read, bulleted list on the best practices for obtaining power of attorney.
Don’t be afraid to ask for help. Even after you have located all of the proper paperwork and obtained power of attorney, you may still be overwhelmed. A financial advisor is a valuable asset in planning a budget and managing investments. They are especially viable if you may be managing affairs for an extended period of time. A financial advisor offers an outside party that isn’t swayed by emotional attachment. This outside source can ease tensions between siblings who might have differing opinions on the best financial management tactics.
The process of managing an aging parent’s finances is riddled with stress. The sheer amount of moving parts and documents needed could befuddle even the most organized of people. If at all possible, talk with your parents before the time comes and develop a plan. Save yourself the anguish of locating the necessary documents after they are needed. Remember, you could find yourself needing financial help someday down the road. Keep this in mind for the sake of your children or future caregiver.