If you are the adult child of aging parents, you may find yourself in the position of someday having to assist them with handling their finances. Here are some steps you can take now to make the process a bit easier.
Open the lines of communication
Your first step should be to get a handle on your parents’ finances so you fully understand their current financial situation. The best time to do so is when your parents are relatively healthy and active. You can start by asking them some basic questions such as where are your assets held? Who are your financial and legal advisors? Do you need any help currently?
Make sure your parents have the necessary legal documents
In order to help your parents manage their finances in the future, you’ll need the legal authority to do so. This requires a durable power of attorney, which is a legal document that allows a named individual to manage all aspects of a person’s financial life if he or she becomes disabled or incompetent. In addition, you’ll want to make sure that your parents have an advance health-care directive which will allow you to make medical decisions according to their wishes. Finally, make sure your parents have a will or trust that is up to date, and that beneficiary designations on IRAs and life insurance match their plan.
Prepare a personal data record
Your next step is to prepare a personal data record that lists information you might need in the event that your parents become incapacitated or die. Include location of financial, medical and legal records, passwords for online access and keys/combinations for lock boxes or safes.
Julie Burenga, CPA, CFP®, Director of Financial Planning, Jehl & Kreilach Financial Management
(260) 420-0268, jehlandkreilach.com
