A day may come when your parents or other elderly relatives are unable to handle their finances. You may need to step in and take over for them at that time. But doing so is not easy.
For one, there’s the matter of the legalities. You will need to establish yourself as a financial authority for their estate. You may also face challenges if your loved one doesn’t admit they need help.
Taking over a relative’s finances isn’t easy. But with the right approach, you will be able to keep their assets protected.
Signs That Your Loved One May Need Help
The first step involves knowing when to intervene. Here are some signs that will tell you it’s time.
- Creditor Communication: Creditors may be calling or sending mail to make your relative aware of unpaid debts.
- Unusual Spending: Peek at your relative’s bank statements to determine if there has been any unusual or excessive spending.
- General Forgetfulness: If your relative is showing general signs of forgetfulness, it’s likely that also applies to their finances.
Have the Conversation Early
The earlier you have a conversation with your parents about who will handle their finances, the better. If they are already dealing with issues like forgetfulness, they may not want to admit they have a problem. It’s better to approach it as a ‘what if’ scenario.
Setting Up Durable Power of Attorney
Once your relative agrees to let you take over, you must start tending to legal matters. This ensures you will be doing everything by the book. The most important legal move to make is setting up a durable power of attorney.
Power of attorney gives a person other than the elderly relative the authority to handle their financial matters. It gives them the right to pay their bills, write their checks, and manage their investments.
To set up a durable power of attorney, your relative must meet with an estate planning or elder law attorney while they are still of sound mind. They will prepare a legal document that establishes your authority according to your loved one’s wishes.
Note: Durable power of attorney can also be set up for health care. It works similarly, but it gives you the right to make decisions regarding medical needs on your relative’s behalf.
Getting Your Relative’s Finances in Order
Once you have all the legalities in order, you must determine which financial matters need to be taken care of. Here’s an outline of an action plan that ensures no stone is left unturned.
- Gather your relative’s personal information and store it in a safe place.
- Make a list of all your relative’s financial accounts, including household utilities, real estate, etc.
- Collect all your relative’s financial statements and documents.
- Create a payment schedule for all bills that need to be paid and submit payments accordingly.
- Take inventory of your relative’s safe deposit box (and bring a witness).
- Locate your relative’s powers of attorney, living trust, and other legal documents. Determine if they need updates.
Hiring a Professional
If handling your relative’s finances is stressing you out, you may consider hiring a professional. Here are some types of professionals that may be able to assist:
Estate Planning Attorney: An estate planning attorney will create documents that state who will inherit your relative’s property, typically in a way that minimizes taxes. They can also set up a durable power of attorney and a care plan that allows your parents to pay for their own long-term care.
Elder Law Attorney: An elder law attorney has similar duties to an estate planning attorney in that they can set up a durable power of attorney and long-term care plans. However, they are often focused on issues such as caregiving, assisted living, and in-home care.
Financial Planner: Financial planners can help people at any stage of life but generally deal with those who have accumulated wealth. They may assist you in determining what to do with your relative’s investments as they get older.
Another important decision you will have to make as your relatives get older is how you are going to care for them. Mission Senior Living is a recommended solution.
Mission Senior Living provides round-the-clock supervision to ensure your relative is always well cared for. We provide medical treatments and assistance, oversee self-care, and provide fun activities that keep your loved one active. Our facility environment is clean, comfortable, and pleasant.
Dealing with an aging relative isn’t easy. But with the right strategy in place, they will be well cared for as they get older. Plan carefully to ensure their health and finances are handled properly. And contact Mission Senior Living for the extra assistance you require.
