Caroline Tapp-McDougall outlines some key things to consider when managing your aging parent’s money. Original article from Caregiver Solutions Magazine.
Managing Your Parent’s Money
When it comes to finances, a typical caregiver arranges bill paying, bank deposits, insurance and benefit plans, savings and investment decisions, tax preparation, housing and daycare.
We know that caregiving can be physically and emotionally exhausting, so be smart and reduce the financial stress ahead of time. Consider taking the following steps before an older relative becomes ill or disabled:
- Assess your loved one’s financial situation by creating a net-worth statement, which is a simple listing of all assets minus all liabilities (or debts.) Necessary information is often difficult to extract from elders given the sensitive nature of financial matters, so be prepared for surprises (positive or negative.)
- Ask for personal and financial documents. Your main issue is to know what documents to look for and where to find them (see know where to find.) By having this knowledge, you can protect your elder’s assets, including dividends, interest, insurance, pensions, rental income and the contents of any safety deposit boxes.
- Obtain access to banking and brokerage accounts by becoming a co-signer on joint accounts. This will enable you to write cheques or withdraw funds to cover the cost of care in case of a short-term emergency or long-term disability.
- Consider hassle-free automatic payments for recurring bills. Arranging for water, electric and other utility bills, along with mortgage, TV and telephone expenses, to be paid electronically out of your loved one’s bank account.
- Arrange direct deposit of pension and benefit cheques. It is a safer, more convenient alternative, and it means no delays in getting funds deposited, no cheques lost in the mail and nothing misplaced or forgotten at home.
- Review insurance coverage. Often, our elders buy too much insurance or the wrong kind. Make sure that your parents have adequate home and auto insurance as well as health, disability and long-term care plans.
- Encourage savings and prudent spending. Recognizing our longer life spans for and the rising cost of living, it’s wise to make a detailed monthly budget and a long-term financial plan.
- Ask a financial planner or accountant to function in the role of mediator.
Create a healthy environment for dialogue and ensure that the situation is being looked at objectively. A trusted outsider will often bluntly explain all of the possible options (with no hidden agendas) and can play an important role in facilitating decision-making.
It is easier to cope with any crisis with proper planning. Smart caregivers will make sure that financial matters are in order so that energy can be focused on sensitive medical, emotional and caregiving issues.
Know where to find… When caring for your parents, you’ll want the following documents accessible. Once you collect and organize this information, keep it in a safe place.
- Banking information (there may be more than one bank account)
- Loan records (to whom and how much)
- Copies of leases or rental agreements (car, condo, apartment, appliances, furnace, hot water tank)
- Provincial health card and other government health records
- Insurance policies (health, life)
- Investments (RRSP, stocks, etc.) Statements and original certificates.
- Pension (government and private) information
- Mortgage on home and cottage or investment properties
- Wills and powers of attorney for property and personal care
- Commitments for charitable donations
- Birth certificate
- Insurance policy numbers
- Veterans Affairs Information
- Club memberships of subscriptions
- Relatives’ addresses and phone numbers
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