Here's Where to Start When Taking Care of Your Parent's Finances
The thought of our parents getting older can bring forward a lot of emotions. It can be difficult to see physical and mental change in the people who took care of us as we grew up. It can be equally difficult as the role shifts and we need to begin caring for them.
Many people end up with the responsibility of caring for their parents financial affairs. Whether they formally ask you to become the trustee of their estate, or mental incapacity forces the issue, it’s important to know where to start. Here’s a few tips we’ve seen be helpful:
Start with the documents—locate any trusts, wills and tax returns they have. Ideally these will line out what their assets and income sources are. You should also keep a list of who they worked with for each.
Talk with the providers—the CPA and estate attorney will be two of the first calls you need to make. The attorney will be able to help draw up any additional documents needed to formalize your decision making ability (power of attorney or trustee paperwork). Get multiple copies of the paperwork, as each asset or income source might need one to add you as a trustee to the account. The CPA can help locate sources of income and assets that may need review.
Touch base with the advisors—insurance policies should have an agent, investments should have an advisor or custodian company named, and income sources will have a contact person you should get in touch with. Be prepared to furnish a copy of the legal paperwork, and sign multiple forms and letters for each asset to get it transferred into your care. You may want to open a bank account on their behalf and have their income paid into it, so you can pay their bills from a single place.
The process for becoming your parents financial caretaker can be tedious, and take months to become fully effective. However, it’s a responsibility that many take with pride as they are able to help their parents in a meaningful and loving way they never could before.