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.
8-step plan
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.
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.
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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.