Offering helpful financial and lifestyle advice for everyday Canadians


Aging parents with money troubles can be a worry for some. Thankfully, Teri Cettina wrote this very detailed and helpful peice to help you help your parents in their later years. Its long, but well worth the read. Nothing is more important than family.

So, the event you’ve worried about much of your adult life has finally happened: You need to take over Mom’s or Dad’s financial affairs.

In addition to the stress and sadness over what’s happened, you immediately have to deal with practical matters: Will Mom be able to live in her  home again? Can she afford a nursing home? Will insurance cover all of Dad’s  medical bills?

And speaking of bills, you’ve got to start paying them – everything from utilities to credit cards.

Even if you’re not at this point with your parents yet, this  list can help you decide what to do now – before anything happens.

Step 1: Find all of your parents’ financial accounts and documents.

“Like  it or not, you now need to become a financial detective,” says Michael Haubrich,  Certified Financial Planner in Racine, Wis. If your parents keep their bank and  investment files in an easy-to-find place, consider yourself lucky. Otherwise,  your best bet is to locate your parents’ most recent tax return.

“Most of your clues will be on Schedule B, where they listed  dividends and interest income and the names of financial institutions,” says  Haubrich. If you suspect your parent worked with an accountant, attorney or  financial adviser, contact that person right away; he or she often can help you  round up necessary financial information.

Advance planning tip: If your parents are  still well, encourage them to assemble a file or “financial map” that details  the location of their financial accounts and safe-deposit boxes, as well as the  names of their financial professionals.

“Even if parents don’t want to tell their adults kids how much  money they’ve got, I encourage them to at least tell the kids where they can  find this information in an emergency,” says Haubrich.

Step 2: Collect and start paying bills.

If you have any concern that Mom and  Dad won’t have enough money to pay their bills and medical expenses, cool your  jets first. Be sure you have a list of all assets and expenses before you start  paying routine bills. You may need to consult an elder care attorney or  financial planner for help and to prioritize what should be paid and what can  wait.

If your parents are on solid financial ground, pay all their bills promptly.  Don’t be surprised if some of them are behind: Mom might have been ailing before  her stroke and could have forgotten to pay some. “Try to get current on  everything, from utilities to grocery deliveries,” says Martin Shenkman, an  elder law attorney in Teaneck, N.J. “It will make things a lot easier if you  need help from these folks after Mom returns home. It also helps you avoid  unnecessary late charges.”

If you don’t have access to your parents’ checking account, consider paying  their bills yourself and getting reimbursed later. “However, only do this if  you’re absolutely sure your parents have enough money to repay you,” says  Haubrich.

Advance planning tip: As your parents age,  ask them to have financial institutions, mortgage companies, etc., automatically  send you copies of your parents’ monthly statements. You might spot an error or  trouble spot early — before it becomes a crisis.

Step 3: Locate power of attorney or living trust documents.

If your parents named you as their  agent in their power of attorney, or (for larger estates) as successor trustee  in their revocable living trust, you’ll need to show these documents to every  financial institution you deal with.

Before a bank can even tell you your dad’s checking account balance, it needs  this form to prove you’re entitled to the information, says Shenkman. “If your  name is not already on your parents’ checking account, but you’re listed on  their power of attorney, you can still pay their bills,” says Shenkman. “Simply  sign checks as Jane Smith (mom’s name) by John Smith (your name) as POA (power  of attorney).”

If you’ll be handling your mom’s or dad’s accounts indefinitely, add your  name to their bill-paying checking account. Your bank branch manager can arrange  this after reviewing the power of attorney form.

Important: “Be very cautious about  handing over or mailing power of attorney or trust documents to anyone,” says  Shenkman. “Although most banks and brokers want to see the originals — and may  even ask you to mail them if they’re out of state — they’ll usually settle for  a ‘certified true original,’ which is a copy prepared by your financial  professional,” he says.

If you have no choice but to send the original, Haubrich  suggests sending the documents by overnight mail and insisting that the  financial institution overnight them back to you. An out-of-state bank or broker  may also agree to have a bank officer in your hometown authenticate the  documents.

Advance planning tip: There are three  important documents you can help your parents prepare before they become  ill.

Step 4: Open their safe-deposit boxes — with a witness.

Your parents shouldn’t keep their  power of attorney form or living trust originals in their safe-deposit box.  They’re better off at home in a fireproof box. Why? If you don’t have these  important forms in hand, and you’re not listed on your parents’ safe-deposit box  account, you’re in trouble. You need those forms to gain access to their  box.

If this happens, the easiest option may be to get a new power of  attorney form. This is possible as long as your parent is still competent enough  to authorize it. Otherwise, you’ll need a court order to open the safe-deposit  box — a major hassle.

“When you open your parent’s safe-deposit box for the first  time, take along a witness, open the box with a video camera rolling, and  immediately make an inventory — on paper and on the videotape — of everything  inside,” says Shenkman.

This might sound like overkill, but Shenkman says you’d be surprised at how often siblings accuse each other of taking valuable items out of their ill parent’s house or safe-deposit box. Sometimes the items were never there to begin with.

Step 5: No POA or living trust? Become your ill parent’s guardian.

In  the sad event that your dad develops dementia or is so ill he cannot handle his  finances — and he has not signed a power of attorney form or created a living  trust — you’ll need to go to court before you can help him.

Proving that your parent is mentally and/or physically  incompetent is not a pleasant process, says Shenkman. An elder law attorney can  guide you through the process. In most cases, you’ll need two or more physicians  to certify in writing that dad or mom can no longer manage his or her life  alone. You’ll also need to go to court and a judge will determine whether you  can handle your parents’ affairs.

“The judge may even appoint a ‘guardian ad litem,’ whom you’ll  have to work with to prove that you’re not taking advantage of your parents,'”  says Shenkman. “Guardianship creates a level of complexity you really don’t want  unless you have no other choice.”

Advance planning tip: Becoming a parent’s  guardian is expensive and time-consuming. All the more reason to be sure your  parents have signed a power of attorney form or established a living trust well  before they might need it.

Step 6: Document everything you do on your parents’ behalf.

If you  pay Mom’s bills, keep copies of every check you write — either as checkbook  duplicates or the check images that accompany statements. Keep bank statements,  too. If you pay for anything with Mom’s cash, keep detailed receipts. If you  meet with a financial planner or attorney, keep thorough notes of what they  advise. These kinds of details can help show siblings that you’re handling your  parents’ affairs responsibly.

Step 7: Consider hiring a financial planning team.

If your parent develops dementia or  could require care for many years, get as much outside help as you can, says  Haubrich. Financial planners, tax preparers and attorneys can help you avoid  common (and often expensive) financial mistakes. They can also help you decide  how best to budget your parents’ money or determine whether your ill parent  could outlive her money. Finally, your siblings may feel more comfortable  knowing that you’re not trying to manage your parents’ financial affairs on your  own.

Step 8: Consider updating your parents’ investments.

Your dad could live another 15 years  with Alzheimer’s disease. Over that time, his financial objectives will probably  change. A skilled financial planner can help you decide whether Dad’s  certificates of deposit are too conservative or whether he’s got too much of his  money in stocks.

“Even if you are pretty good with money, don’t guess about what  to do with your parents’ investments,” says Haubrich. “Other beneficiaries of  the estate could later second-guess your choices, and you don’t want that.”

Haubrich says that if your parents have a reasonably large  estate, a financial adviser will also consider the combined interests of both  the parent and the ultimate beneficiaries. If your parent has plenty of money to  cover his care for years to come, for instance, the planner might suggest  longer-range investments aimed at benefiting the kids or grandkids. Those  options are best evaluated with professional help.



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