Is your loved one having trouble managing their finances? Do they forget to pay their bills, or get confused talking about money? If so, it may be time to start managing finances for elderly parents.
Depending on your parents’ financial situation, taking over their finances may feel overwhelming. For families in Roanoke, VA, it’s important to know how you can support your elderly loved one.
Read on to learn about a handy checklist for taking over parents’ finances in this senior care financial guide, so you can make informed decisions regarding their finances.
Make a Plan Early
It’s essential to create a financial plan as soon as your parents show interest. Or, if your loved one suffers from dementia, do it before they start to lose major cognitive abilities.
Topics to discuss include:
- Power of attorney planning
- Long-term care options
- Trust and estate planning
- Important documents
- Bank accounts and credit cards
Write down your plan and distribute it to family members or friends who may be involved in managing finances for elderly parents.
You can also revisit the plan if needed. For instance, if your loved one needs a higher level of care, that may impact their financial stability.
Gather Essential Information
Misplaced documents can make it more difficult to put together a senior living cost checklist. Ensure you have all important documents and information up front.
Keep them in a safe spot, such as a locked file cabinet or a password-protected folder on your computer.
Some of the key paperwork to have on hand includes:
- Personal documents
- Legal documents
- Financial information
- Medical information
Personal Documents
Obtain copies of your loved one’s:
- Birth certificate
- Social security card
- Driver’s license or state identification card
- Passport
These are good to have on hand in case your elderly parent needs assistance filling out an application or requesting bank information at a later date.
When possible, try to get certified copies. You’ll have less of a hassle presenting them to agencies such as the Virginia Department of Motor Vehicles.
Legal Documents
Keep copies of all legal documents to ensure you are prepared in case of any issues. You’ll need a copy of your loved one’s living will or standard will to avoid court battles over their care.
If you are a designated power of attorney, keep those forms on hand as well. Make sure every document has proper signatures. Work with a notary to comply with all legal requirements.
Financial Information
Usually, the rule of thumb is to hold onto one year’s worth of bank statements before shredding. However, if you’re managing your loved one’s finances, it’s better to be safe than sorry.
One of the best family financial planning tips is to compile records of all of your parents’ assets and accounts, including:
- Checking
- Savings
- Brokerage
- Retirement accounts, such as 401(k)s and IRAs
If your loved one’s assets are in a trust, consider investing in annual fiduciary accounting. You can receive a compiled record of their total net worth, listing out all transactions that took place during the year.
Medical Information
It’s important to have access to all of your loved one’s medical records in case of an emergency. Knowing their health details is crucial if you are the medical power of attorney.
You also need details about their medical insurance coverage, as well as the cost of prescriptions and other regular treatments.
Consolidate Finances
When your loved one has many accounts, it is best to consolidate them if possible. For instance, move all of their investment assets into a single brokerage so you can receive consolidated statements.
You can hold multiple accounts under different ownerships or beneficiaries to protect funds that exceed the FDIC limit of $250,000, ensuring all money remains insured.
Automate Financial Processes
Streamlining payments and processes can take some of the burden off your shoulders. Look at regular transactions, such as assisted living costs and cell phone bills, and set up automatic payments.
Sign up for email or text message notifications so you’ll know when the payment goes through. You can have some peace of mind and avoid forgetting important financial responsibilities.
Consult an Attorney
Taking over finances for your loved one can come with a web of legal details. You must stay above board and avoid potential illegal actions.
Meet with an attorney who specializes in elder law and estate planning. They can verify that you have the appropriate forms, certifications, and requirements.
Transition Responsibilities Slowly
Handing control of your finances can be overwhelming. Imagine giving someone else the power to make decisions and utilize money you’ve worked for your entire life.
If possible, facilitate the transition at a pace your parent is comfortable with, and seek their permission and guidance at each step.
Safeguard Against Fraud
According to the FBI, scams targeting the elderly increased by 14% in 2023. With today’s technology, it is easier than ever for fraudsters to get hold of your loved one’s financial information.
Instruct your parent to avoid answering questions from strangers through any medium, including:
- Phone call
- Text message
- In person
Set up safeguards such as two-factor authentication on bank accounts and other important logins. You’ll have to enter a second code to access the information, which can deter theft.
Keep Detailed Records
When in doubt, don’t throw it out.
Keep and organize all paperwork you receive regarding your loved one’s finances, including:
- Bank and brokerage statements
- Receipts
- Invoices
- Insurance claims and reimbursements
Organize records in a system that is secure and free of clutter. Consider using accounting software to track financial activity and ensure it is free from errors.
Use This Checklist for Taking Over Parents’ Finances
Caring for elderly parents can be stressful, and managing money adds another layer of complexity to the situation. With this checklist for taking over parents’ finances, you can confidently navigate any financial problem with clarity.
One thing you shouldn’t have to worry about is a suitable senior living community. Terra Bella Pleasant Ridge features both senior assisted living and memory care, providing for all of the needs of your loved one.
Are you interested in helping your aging parent improve their quality of life and experience their golden years in peace and comfort? Reach out to us today to learn more, or schedule a tour to see our beautiful location in Roanoke, VA.
