Be Prepared to Manage Older Parents’ Finances
Certified Financial Planner Linda Sims reminds Gen Sandwichers, “One of the most important aspects of care giving, yet often the most difficult subject for children and their parents to discuss, is finances. Basic facts such as how much money your parents have, how much they owe and where money is kept are important for you to know.Equally important is knowing about their life, long-term care and medical insurance policies. You also should know whether your parents have a will and where a copy can be found.” This is information you will need if you suddenly find yourself responsible for managing their finances.
Sims lists several of the most important financial issues to help you prepare for such a scenario:
•Income – How much money comes in to your parents and from where? Do they have company pensions, government pensions or Social Security benefits?
•Assets – Get a list of checking and savings accounts and investments such as 401(k) accounts, stocks, bonds, certificates of deposit and life insurance polices. Don’t overlook other assets such as residential and commercial real estate.
•Stored assets and valuable documents – Do your parents have safe deposit boxes? Where are they? Where are the keys? Whose names are on the signature cards? Where are their important documents stored? What about valuables such as jewelry, antiques and collectibles? How about birth certificates and their Social Security and driver’s license numbers?
•Insurance – How much and what types of medical, life and long-term care insurance do your parents have? Specifically, what do their policies cover? Do they have supplemental insurance? How are the payments made – a fact you’ll want to know to prevent coverage termination due to a payment lapse.
•Wills – Do your parents have wills? Who have your parents named as executors, trustees and powers of attorney? If your parents don’t have wills, urge them to work with an attorney and create them so they can avoid potentially huge tax consequences.
In addition to this information, make sure that you have contact information for your parents’ professional advisers including attorneys, accountants and insurance agents. That way, you’ll know where to turn for help and information in the event of parental illness or death.
While talking with your parents about finances isn’t easy, it is essential for you to get answers now about how to manage the financial responsibilities you may have to assume on their behalf. It will help you help them as they meet the inevitable challenges of aging.
Although every family is different, I found that by beginning to talk about financial and financial planning early, years before there was any need for my involvement, it set the stage for ongoing discussions. And then, when I needed to be more directive, we already had a pattern of openness established.
Labels: aging parents, finances
3 comment(s):
After my mom had congestive heart failure and a stroke, the social worker said, "You should get the financial power of attorney signed. This is not in my job description, but I believe it is important."
Yes, it was very important. And I don't know why it wasn't in her job description. If fact the day we took care of it, she wasn't there and the other social worker really didn't know what to do.
It is the most important thing we did in the situation.
Mom had always taken care of her finances. Now she has no interest in those things, although her mind is pretty good.
We have been able to dig through the papers, move money around, and pay the bills, etc.
Mom kept literally everything, so we had to sort which accounts had been closed, etc. Akkkk. But it all was there eventually.
Our best idea: we got a bin that holds hanging folders for all the paper work. Then we can take the bin and all the files with us.
By
LoieJ, at
6:02 AM
Education is the most important area for both parents and their children. Their is an interest site with great reference information on pensions call Know Your Pension. The site address is www.knowyourpension.org
Hope this proves useful for some.
By
Anonymous, at
2:41 AM
As a bankruptcy lawyer, I'm frequently contacted by the children of an elder who have discovered that their parent is deep in debt on credit cards. The elder has cushioned a limited income with the cards for as long as possible and is ashamed and scared of the consequences of being unable to pay. For an elder with limited means, it may be worth consulting a bankruptcy attorney to see if financial relief is available.
Cathy Moran
www.bankruptcylawnetwork.com
By
Unknown, at
10:52 AM
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