Checklist for Taking Over Parents' Finances and Care
Has your parent or loved one approached you about handling their money? Are you confused and perplexed at the thought of managing elder finances? Does the thought of budgeting for your parent overwhelm you?
If you can relate to any of the above, you're certainly not alone: Tens of millions of seniors in America fall short of receiving needed care, according to the New School. That means children and younger relatives often have to pick up the slack.
For seniors in Camby, IN, budgeting for senior care and assisted living costs is essential for a comfortable retirement. Below, you'll find a handy checklist for taking over parents' finances, so the transition process is smooth and error-free.
Take Care of Legal Issues
Before fully integrating with your parents' finances, it's important to ensure all legal pathways are ironed out. You should have documentation ready to prove legal responsibility in case of legal issues.
Meet with an attorney to figure out which forms you'll need. Make sure your parent or loved one is there to ask questions and seek clarification when necessary.
You will likely need to sign a document designating you as a power of attorney, which means that you can act on your loved one's behalf in a designated capacity.
Collect Relevant Documentation
Ensure you have copies of documentation that could come in handy later on. This is especially important for family caregiving prep if your loved one suffers from cognitive deficits or memory loss related to dementia.
Make a list that includes:
- Social Security card
- Birth certificate
- Living will or estate plan
- Any advanced health directives
- Bank account information
- Power of attorney documentation
Store the documents in a secure location. It's important to have both hard and digital copies in case something happens to one or the other.
For hard copies, lock them in a file cabinet or fireproof safe. A coded lock is preferable to using a key, as keys can easily be copied without your knowledge.
Digital copies can be stored on an external hard drive or a USB thumb drive. You can also upload them to a secure digital cloud platform and eliminate worries about space.
Ensure Access to All Accounts
The last thing you need is to get locked out of an account, or be unable to access necessary funds. Ensure that you have the login information and permission to use all of your loved one's accounts, so there will not be any issues.
It's sometimes easier to have your name added to the specified accounts. Depending on the banking institution, you'll need to be added as a joint owner or an authorized signer.
Automate Payments and Expenses
Remembering all of your own bills and monthly expenses can be a hassle, but adding on a parent's can seem downright unmanageable. Automated payments can help here.
Go through your loved one's bank statements and keep an eye out for recurring costs, such as:
- Utility bills
- Property taxes
- Phone service
- Subscriptions
- Medical premiums and copays
- Prescriptions
Log in to the necessary accounts or contact the vendors to set up automated payments. You'll never have to worry about missing a due date again.
Consider the Cost of Long-Term Care
If your loved one needs long-term care, such as assisted living, it can pose a financial burden if you're not prepared. You need to estimate the monthly and annual costs to help provide your parent with the best care possible.
Ask your loved one about their care preferences well in advance. Planning is the best way to ensure all their needs are met.
Tour assisted living and senior communities in the area. Ask about:
- Base pricing
- Pricing add-ons
- Price increase schedules
You may not be able to receive an exact number, but you can get a ballpark figure of the cost of care. Compare it to the assets available and projected growth to see if it's affordable for your parent.
Utilize Bookkeeping Software
Bookkeeping software is a simple way to streamline transactions and have access to all income and expenses for your loved one. Contrary to popular belief, you don't need to be an accountant to effectively use the software.
For instance, QuickBooks Online offers a streamlined experience for sorting and categorizing bank transactions. You can connect bank accounts to the software so that the transactions import directly.
Running reports and transaction summaries is also simple. If an attorney or beneficiary wants a closer look at the financial activity for your parents' account, you can pull up the transactions with the click of a button.
The Audit Log is another helpful feature of accounting software like QuickBooks Online. You can pull up this report to show all of the activity within the software, such as categorizing transactions or entering checks.
Consider Outsourced Accounting
If you don't have the time or energy to invest in managing elder finances, outsourcing can also be a great solution. Work with a bookkeeper or an accountant to assist with recording transactions appropriately.
For more complex financial matters, it may be wise to obtain fiduciary accounting services. This is especially beneficial if your loved one's assets are in a trust.
Emphasize Regular Communication
Meet with parties related to your loved one's finances regularly. These can include:
- Children
- Siblings
- Other beneficiaries
- Trustees
- Attorneys
Respond promptly to all inquiries regarding the financial situation. Remember, transparency is the best approach. Sharing information shouldn't be a problem if you don't have anything to hide.
Involve others in significant decisions to make them feel included. For instance, if your parent needs to move to a different care community, your siblings may want a location close to them.
Use This Checklist for Taking Over Parents' Finances
Financial planning for seniors can seem daunting, but it doesn't have to be. With this checklist for taking over parents' finances, you can feel confident that they're in good hands.
Are you searching for the perfect community where your loved one can spend their golden years in peace and comfort? Consider Worthington Place Assisted Living. Our thriving community, located in Camby, IN, offers floor plans, amenities, and personalized care suitable for every need.
Ready to learn more? Reach out to us today if you have any questions, or visit us in person to see for yourself. We can't wait to meet you!