- Do they have a durable power of attorney, and where is it?
- Where do they keep their financial records?
- What are their monthly expenses?
- How can I pay their bills if necessary?
- What kind of medical insurance do your parents have in addition to Medicare?
- What’s their income and where does it come from?
- Have your parents done any estate planning?
- If they can no longer live on their own, what can they afford in terms of housing?
- What financial planning have they done?
- Do they have an advance health directive?
Know BEFORE They Need Your Help
It’s nearly inevitable…at some point your parents are going to need your help with financial or health care issues. They may become ill, incapacitated, susceptible to scams and fraud, or unable to keep up with their financial affairs as their mental and physical abilities wane. It will be easier to intervene and prevent problems if you have talked to them regularly about their finances. This can be difficult in families where the subject of money was always taboo, but waiting until a crisis occurs can cause stress, heartache, and money losses. Planning ahead helps ensure that your parents’ wishes are carried out and reduces disagreements among siblings regarding exactly what your parents would want done. Don’t wait for a crisis.
How do you broach this potentially awkward subject? Let them know that it will be easier for you to help them later when they need you if they share the details about their finances with you now. If your parents are unwilling to discuss these details with you, at the very least they should tell you where they keep their important financial documents in case you need them in an emergency.
The time for preparing powers of attorney and living trusts to give someone else the authority to make decisions about financial affairs or health care is before the need arises, while your parents still have their mental faculties. If your parents aren’t mentally capable signing these documents, you may have to seek legal guardianship, which can be a long and painful process.
So exactly what do you need to know? Ideally, you should know the details of their assets and liabilities and income and expenses, as well as the answers to questions such as: Do they have a will? Where is it kept? Do they have a living will or medical directives so someone can speak for them in case they are unable to speak for themselves? Do they have a durable power of attorney so someone can handle their financial affairs if needed?
Other information you should know:
- Social Security Numbers.
- Details of insurance policies, including health, life, and long-term care.
- Health records.
- Medicare numbers.
- Debts and payments.
- Income, including retirement plans, social security, annuities, dividends, etc.
- Savings and investments, including bank account numbers and names of financial institutions.
- Tax returns.
- Location of safe deposit boxes and keys to the boxes.
- Names and phone numbers of legal advisors, doctors, attorneys, insurance agents, accountants, etc.
If it becomes necessary to take over the administration of your parents’ finances, it’s important to respect their rights and wishes. Give them as much control as possible. Keep their money separate from yours. Involve them as much as possible. Keep them informed.
Yes, bringing up this subject with your parents now may be awkward, but it’s important and will benefit both you and your parents if you ever have to step in to help them manage their finances.