8
steps for managing parents' finances | | By
Teri Cettina • Bankrate.com |
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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.
| The need to take over your parents'
financial life, especially if it happens suddenly, can
be extremely stressful. However, if you approach it one
step at a time, you'll get a handle on what needs to be
done. |
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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.
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