8 Steps for Mangaing Parents’ Finances

December 8, 2006

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.

1. Find all financial accounts and documents.
2. Collect and start paying bills.
3. Locate power of attorney or living trust.
4. Open your parents’ safe-deposit box – with a witness.
5. Become your parents’ guardian.
6. Document everything you do.
7. Consider hiring a financial planning team.
8. Consider updating investments.

Advance planning tip: There are three important documents you can help your parents prepare before they become ill.
1. A power of attorney form, which allows you to take care of their finances.
2. A health care proxy, which allows you to make life-and-death medical decisions.
3. A will, which determines how their assets will be divided when they’re gone.
Source: Written by Teri Cettina, Bankrate.com.