Checklist for Managing Your Elderly Parents' Finances

An estimated 42 million Americans are caring for someone over the age of 50, with most caring for a parent or parent-in-law, according to AARP. If you're part of this statistic, you’re likely helping parents out around the house, getting them to the doctor, making sure they’re taking medications or providing hands-on care.

You’re also likely assisting with money tasks, especially if your parents have Alzheimer’s disease or another type of dementia. All of these caregiving responsibilities are difficult, but managing aging parents’ finances can be especially challenging. Even small mistakes can be costly—for them and for you.

However, you don’t have to feel like you are in over your head. This checklist will guide you through the steps to take if you need to get involved with your elderly parents’ finances.

Have money talks before emergencies

You should be having conversations with your parents about their finances before there is an emergency or need for care. This will help ensure that essential legal documents are in place and that you have the information you need if you have to start managing your parents' money.

If you have siblings or other family members who might share financial caregiving responsibilities with you, speak with them before speaking to parents to make sure you’re on the same page. Decide with your family members whether one or all of you should initiate money talks with your parents. Also, discuss what roles each of you is willing to play if your parents need assistance.

Gather details about your parents’ finances

Gather as much information from your parents about their finances as possible. Let them know that you’re asking for this information to be prepared in case of an emergency. If they are reluctant to talk, encourage them to write down this information and to tell you when and how you can access it.

However, you might need to play detective if they are experiencing memory loss or are incapacitated. The best sources of information include their tax returns, their mail, their wallets, bank and credit card statements or their checkbooks.

• Take inventory of your parents’ sources of income, investments, debts, real estate holdings, property such as cars and boats, and personal items of value such as jewelry. Locate deeds, property titles, lockbox keys, and insurance cards and policies.
• Create a list of your parents’ personal information, including their birthdays, Social Security numbers, driver’s license numbers, veterans ID, Medicare or Medicaid numbers, and other personally identifying information. You’ll be asked for this information regularly, so it helps to have it all in one place.
• Create a list of financial accounts, account numbers, usernames and passwords, and contact information for your parents’ financial institutions. Store this list someplace safe so this sensitive information doesn’t fall into the wrong hands.
• Create a list of bills that must be paid monthly, quarterly and annually. Include bill amounts (or estimates), account numbers, account usernames and passwords, and contact information for service providers.
• Locate estate planning documents, including your parents’ financial and health care power of attorney documents, advance directives, and wills or trusts. One way to keep these documents—as well as insurance policies, property titles, deeds, passwords and other financial paperwork—organized is to use a digital vault such as the one included with the Carefull financial safety service. You can scan, upload and securely store documents to keep them accessible when you need them.

Get the legal right to make financial transactions

Before you can start managing your parents' finances, you need the legal right to make financial transactions and decisions for them. Just because you might have your parents’ login credentials for their financial accounts doesn’t mean that you can legally access those accounts. You need to be a joint account owner, trustee, their agent under power of attorney, or their court-appointed conservator or guardian.

• Joint account owner: A joint account is an account with two (or more) owners instead of one. All owners have access to the account and can make transactions without the other’s permission.
• Trustee: If your parents have a living trust and have named you trustee, you can manage any accounts and property in the trust.
• Power of attorney: Being named your parents’ agent under power of attorney is ideal. In most cases, a general durable power of attorney is the best option for financial caregivers because it goes into effect immediately and remains in effect if your parents become incapacitated.
• Court-appointed conservator or guardian: If your parents are no longer competent or are incapacitated and haven’t named you POA, you’ll have to petition the court to be named their conservator or guardian.

Notify financial institutions of your power of attorney status

Notify your parents’ financial institutions of your power of attorney status (or conservator status). You will need to show the actual power of attorney document or provide a copy of it before financial institutions will allow you to act on your loved ones’ behalf.

Be aware that some financial institutions can be reluctant to accept POA documents.

Notify government agencies of your POA status

Some government agencies will require you to fill out their own forms to manage your parents’ government benefits.

• Medicare has a form to appoint an authorized representative.
• You must apply with the Social Security Administration to become your parents’ representative payee.

Streamline your parents’ finances

Make the job of managing your parents’ finances easier by taking the following steps.

• Consolidate accounts and credit cards. Help your parents shift cash into just one checking account and one savings account.
• Set up automatic bill payments for monthly bills such as mortgage payments or rent.
• Eliminate duplicate or unused services and subscriptions. Review your parents’ bank and credit card statements to identify services, subscriptions and memberships that they don’t need or use.
• Audit your parents’ wallets to limit the damage if their wallets are lost or stolen.
• Limit spending, if necessary, to protect your parents from endangering their financial well-being.

Monitor and protect their finances

You need to keep a watchful eye on your parents’ finances to protect them from scams, fraud and money mistakes. Technology can make this easier.

• Create a “my Social Security” account. Help your parents log onto SSA.gov to create a my Social Security account to manage and keep track of their benefits.
• Get account alerts. Most banks and credit card companies offer the option to receive transaction alerts.
• Sign up for credit and identity monitoring. The Carefull service includes credit monitoring that will constantly monitor your parents’ credit reports and alert you to any changes.
• Freeze their credit reports to prevent new accounts from being opened in their names if they become victims of identity theft.

Keep good records

Depending on your legal status, you might be required to keep records of how you manage your parents’ finances.

• Keep a detailed list of purchases or payments you make for your parents’ with their money, and hang onto any receipts you receive.
• Avoid paying with cash for their expenses.
• Create a filing system to store your parents’ financial statements and records.
• Track your spending. If you’re providing monetary support, keep tabs on how much you’re spending on your parents’ care.

Plan ahead

You might eventually have to take complete control of your parents’ finances as their health declines. Being aware of the additional responsibilities you’ll have to take on, ways to stretch their financial resources and what sort of professional support is available can help you plan ahead.

• File tax returns. You might have to fill out and sign tax returns for parents if they are no longer competent.
• Manage Medicare benefits. Medicare has a form your parents can fill out to appoint you as their representative to manage their benefits for them.
• Look into government benefits that your parents might qualify for if they are struggling financially.

A final note

If you have to get involved with your parents’ finances, it’s best to ease your way in to increase the chances that they will accept your help. And you’ll have more luck getting them to cooperate by focusing on the benefits of what you’re trying to do (such as helping them avoid late fees by automating bill payments) rather than pointing out why they’re no longer capable of managing certain financial tasks on their own.