Checklist for Taking Over Parents' Finances: What to Know

What is the checklist for taking over parents' finances? Parents are usually responsible for taking care of everyone. But aging often leads to a reversal of roles, where eventually kids have to take care of their folks.

The U.S. Census Bureau found that there are over 73 million baby boomers in the US, most of whom are now 65 or older. Being a child of an aging parent means getting ready to undertake more responsibilities and make tough decisions.

Going over your parents' finances involves examining whether they can afford to meet their long-term care needs. Liberty Place in Port Orchard, Washington, can help you navigate the complex living options available in assisted living.

Let's explore the checklist you need to take over your parents' finances responsibly.

Begin Talking About Money Early

Have a conversation with your parents early enough. This measure helps you understand their wishes, expectations, and any concerns. Initiate the conversation with empathy and enlist the help of other close family members.

Time is one of the most important factors in adequately planning for your parents' future. But talking about finances and the uncertainties of the future isn't easy. So, approach the conversation with openness and listen to their wishes.

Other ways to initiate a good conversation about money with parents include:

Talking about your involvement
Speaking openly about the existing financial plans
Setting financial goals

Before any conversation about finances, ensure your parents are cognitively able to make sound money decisions. Document the conversation, especially the key points about their wishes and preferences.

Establish Legal Authority

Establishing legal authority is one of the main items in the checklist for taking over parents' finances. Elder financial planning is easier with a power of attorney. A financial power of attorney grants you the authority to make decisions on behalf of your parents if they can't.

In addition, a power of attorney gives you access to information, especially financial and health records. The financial power of attorney document can define the decision-making authority you have, such as:

Debt management and bill payment
Handling banking duties
Tax payments and filings
Benefits management

It's better to have a power of attorney that has been voluntarily established. However, this is usually not the case, and according to StatPearls, only 18% to 36% of seniors have designated a healthcare power of attorney.

If you don't have medical power of attorney, you can petition a court to declare you a guardian. However, such a process may be time-consuming. More importantly, gaining legal authority is only possible while all the parties are mentally competent.

Assess Your Parents' Financial Status

Comprehensively assessing your parents' financial situation is the first step to making informed decisions about long-term care. The financial status will help you decide which assisted living option is within your price range.

Further, it can help you understand your options for raising money to cover unforeseen expenses. You can do the following to get a clear picture of your parents' wealth:

Create a comprehensive list of all bank accounts
Take inventory of all assets, debts, and sources of income
Assess all liabilities and pay off short-term debts

Streamline all the finances by consolidating bank accounts to make it easier to keep track of various transactions. You also want to cancel subscriptions and unused services that are no longer necessary.

Scan, upload, and store all financial documents to ensure they are safe and accessible. Document everything and update all financial records to enhance legal compliance. It's also advisable to consult a professional if you need help checking off the financial checklist.

At the same time, you can get help from the rest of the family, as money management for seniors can be very complex. Research the internet and other resources, including a family finance guide that can help you avoid common mistakes.

Control Account Access and Management

Another item on the checklist for taking over parents' finances is gaining access to or control of their accounts. Seniors are often victims of numerous financial scams.

Having control over your parents' account can help you protect their interests. You can ask the bank to make you a joint account holder or an authorized user. This action gives you complete visibility of the transactions in the account.

Moreover, you can set up automatic reminders for recurring bills and expenditures. You can also limit the number of credit and debit cards your parents carry in their wallets.

Sign Up for Additional Security Features

Becoming a joint account holder may seem enough, but you need to take it a step further. Request the credit card company or the bank to provide you with alerts on all transactions under your parents' names.

You need to monitor your parents' finances 24/7, especially if they're going through cognitive decline. Consequently, you can't be too safe when monitoring the accounts.

Ask the bank and any other financial institutions to inform you whenever anything suspicious happens. Other steps you can take include:

Regularly review credit reports
Checking your parents' mail
Blocking spam calls

Port Orchard Eldercare Tips

You may not have all the caregiver tools to optimize your parents' well-being as they age. The Port Orchard senior living community can enhance your parents' financial management skills through peer support.

The different packages offered go a long way in cutting costs. There are coping mechanisms and tools that seniors at Port Orchard gain as residents. Additional tips to navigate elder care and financial responsibilities include:

Preparing for future care needs
Avoiding mixing your personal accounts with your parents' finances
Limiting spending and setting a budget

Develop a Checklist for Taking Over Parents' Finances Today

Any checklist for taking over parents' finances requires continuous monitoring and updates. Start the checklist by openly conversing with your parents to understand their wishes and preferences.

Liberty Place Senior Living in Port Orchard has earned a stellar reputation as a premier community for older adults in Washington. With a scenic setting, vibrant activity calendar, and Elevate® dining program, we help seniors stay active, healthy, and thriving in their golden years.

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