Getting Power of AttorneyFirst things first - make sure you have Power of Attorney (POA). POA will give you all the necessary clearance for making financial decisions on behalf of your elderly loved one. It is extremely important to get this in place before they are unable to make a clear decision about who to appoint. (A good discussion to have with your aging parents ahead of time).
After you have POA, and the time has come to start managing finances, contact your parent’s financial institutions (banks, investment firms, etc.) Let them know you will be taking over and will be the direct point of contact. Also, be prepared to show them the documentation that you have POA for your aging parent(s). While making your introductions, it could be helpful to set up an appointment with a financial advisor to guide you along this new journey.
Put Together a Financial PlanResearch and use some financial planning/organizational software. This could be instrumental in staying organized and on time with payments and budgets. You’ll be able to enter monthly expenses, calculate the costs and keep a strict timeline of money going in and out of your parent’s accounts. These also include bill reminders which are to make sure you are not delinquent on any payments. Also, make sure you do not combine your account with theirs. This could create a very messy and difficult way to establish who’s is who’s – and you would avoid any potential accusations from other family members about pocketing money that does not belong to you.
Once you have established all the bills per month that you are now responsible for, it could be helpful to set up automatic bill pay. This will ensure that you will not miss any payments or incur any late fees.
Just because you are now responsible for maintaining your aging parent(s) finances, doesn’t mean you must do it alone. Using the financial manager and bill paying service will assist you in payments, record keeping, receipts and budgeting. Remember – these will cost extra to utilize so assess your budget accordingly.