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Conducting Financial Checks for Your Loved One

One of the most difficult parts about caring for an older loved one is finding a way to help them manage their money without stepping on their toes. You want to make sure their finances are secure without them having to worry about what you can do with their money. Here are some tips to start that transition.

Start early

Studies have shown that our ability to manage complex tasks starts to decrease as early as age 60. The sooner you can start looking into your loved one’s finances, the sooner you can catch problems. It’s also important to know where all their financial documents are before they pass away or become incapacitated, which should help save you time trying to manage everything.

One way to broach the conversation with your parents is to tell them that you’re starting to have conversations with your adult children about your financial portfolio so that they’ll be prepared in case anything happens to you. Explain that you want to know what money they have where so that you can take care of everything once they pass on or if they become incapacitated.

Make a plan for when it’s time to step in

If your loved one is still managing their money without problems, set a plan for what parameters need to be met before you step in. Whether it’s the first time they miss paying a bill on time or once they can’t seem to balance their checkbook anymore, deciding on a plan ahead of time will be easier than trying to rip control away from them if they don’t think they have a problem.

You should ask to have permission to look at their finances regularly, whether that’s through their documents or talking to their financial institutions directly. There are options that will allow you to see their assets without being able to touch anything.

Get everything together

You should know where all of your loved one’s investments are, what bills they have and when they are due, how much their income is, what sort of life or long-term care insurance they have, and that they have a copy of their will and power of attorney documents.

If you don’t have a current, valid, power of attorney, it can take more than a month to prove that your loved one is incapacitated and that you can be trusted to manage their finances. As you can imagine, a lot can go wrong in a month with nobody managing somebody’s finances.

In fact, it’s best if your loved one can introduce you to their accountant, lawyer, and anybody else who manages their money while they still can. There is a disturbing rise in elder abuse lately, including abuse of their money, so many financial institutions are becoming reluctant to even work with strangers who hold power of attorney.

Developing a relationship with these people before your loved one becomes incapacitated can help smooth the transition.

Stay calm

Finances are a stressful topic for anybody, and somebody who is worried about losing control of their money is bound to be defensive. Reassure them that you have their best interest at heart.

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