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. That way 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.