A day will come when age begins to catch up with your parents and they will need help with their finances. Even if your parents do not want to feel dependent, when you think they need your assistance, you can approach the issue with sensitivity and extend your support for the management of their finances, says Real Daily’s recent article entitled “5 Tips to Manage an Aging Parent’s Finances.” So, how to manage aging parent's finances? Here are some tips:
- Start the conversation early. Your parents may not need your help with the handling of their financial matters right away. However, it is smart to begin the conversation early. Approach the issue of who will manage the financial responsibilities when they are no longer able to do it. Parents should select a trusted family member by providing their advance written consent. This will let you to talk about your parents’ financial issues with financial advisors, doctors and Medicare representatives and carry out timely financial planning.
- Create a list of all pertinent legal and financial documents. Prepare a list of your parents’ important contacts, bank account details and locations of any stored documents, like wills, property deeds, insurance policies and birth certificates. Make certain all information and documentation is accurate and up to date. If information needs to be modified because of a change of circumstances, this is time to apprise them of it and help them do what is I cannot stress how important this is!
- Consider executing a power of attorney. A competent adult can sign a power of attorney to authorize another person to make decisions on their behalf. A power of attorney for a specific purpose may cover medical, financial, or other decisions, and it may be designed to give limited or more sweeping powers. When your parents sign a power of attorney with you named as their attorney in fact, it will legally empower you to make key decisions when they cannot. An elder law attorney can help you draft an appropriate power of attorney according to your situation.
- Document your actions and keep others aware. Transparent communication will help you avoid misunderstandings or controversy within your family. Keep your parents, siblings and any other loved ones involved with your family informed about your actions. No matter how noble your intentions may be, if others are kept in the dark, it can raise questions about your motives. Managing the finances of aging parents is a lot of work, and you can ask for the support of family members or at least keep the lines of communication open.
- Never co-mingle your finances with your parents’. While it may look to be a convenient or cost-effective thing to do, it is never a good idea to combine your parents’ finances with your own. Keep them separate. Using your parents’ money for your purposes or your own money to help them out is usually a slippery slope that should be avoided. Do not forget about your own financial goals and retirement savings while you focus on helping your parents.
- Consider an Independent Fiduciary. In many cases, the children may live hours or time zones away! Parents may also be hesitant to pick one child over another. There are many reasons why you might want to recommend an independent fiduciary to act as a parent’s Agent or Trustee. As this need has grown, Mr. Haley has educated himself more in this field and has been named a Certified Master Independent Trustee by the Independent Trustee Alliance. He has been honored to have acted as Agent, Trustee and Executor for many of our clients. Courts throughout the area look to him to serve as Conservator or Guardian for those in need of an independent fiduciary.
- Schedule a consultation and we can discuss your planning options. If you or a loved one are concerned about issues with situations like this in estate planning and elder law concerns including Asset Protection/Medicaid Planning and questions regarding long-term care and the nursing home, reach out to us! Book a call with us on our website: www.VAElderLaw.com to get started. We have offices in Bassett, Danville and Lynchburg to serve you.
Reference: Real Daily (Sep. 9, 2022) “5 Tips to Manage an Aging Parent’s Finances”