Your aging parents may not only need help physically, but financially, too. You do not have to send them money, but you want to help them manage the funds and protect their financial health.
AARP offers suggestions on how to manage another’s money the right way. Understand your responsibilities and how to carry them out.
Add yourself to bank accounts
If your parents are mentally competent, ask how they feel about adding you to their bank account as a secondary user. That way, should your mother or father ever suffer from dementia or a progressive disease that impacts their mental faculties, you can continue paying their bills.
Pick a guardian of assets
Now is also a good time for your parents to choose a fiduciary, who will essentially be a guardian of their assets. Much like your parents adding you to their bank account, your parents must be mentally competent to make someone else their fiduciary. Specifically, you can become your parents’ power of attorney, allowing you to make financial decisions for them.
Your parents can also shift their assets to a revocable living trust and name you as a trustee. With a living trust, you help your mother and father keep up with insurance policies, take over their investment decisions and pay their taxes.
Talk with the rest of your family
You and your parents should discuss your decisions with the rest of your family, especially if you have siblings. That way, you lessen the chance of family conflict flaring up, which is common for money matters. Better yet, you, your siblings and your parents can all make a plan together for managing your parents’ finances.
Discussing estate planning with your parents is understandably distressing. That said, having the conversation now can save you all a lot of distress and heartache.