NMLS# 3151

Monday, September 16, 2013

Helping your parents manage their finances

So, that time has come.  You've worried about it much throughout your adult life and now you need to take over your Mom's or Dad's financial affairs.

Now, it's no doubt that this can be a stressful and emotional time but it's important to find out about your parent's finances before a crisis occurs.  Preparing for this situation ahead of time will ensure that your parents are financially secure and their affairs are in order before it becomes a problem.

Start with the talk.

It's important to remember to not phone your parents out of the blue and immediately start shooting off a list of questions about their money.  Like any other mature conversation, sit down with them and show your respect for their situation by letting them know you have some questions you would like to ask about their finances.

It's easy to assume that no parent wants to face the facts of old age, and no parent wants to feel as if their children are leaving them left to dry.  Explain to your parents that you care about them and their financial situation and let them know you would are just preparing for an event in case of an emergency.

Get all financial documents and accounts in order.

It's time to become a financial investigator.  Consider yourself lucky if you find out your parents actually keep all their financial documents in an easy to find place.  If your parents happen to work with an accountant, attorney, or financial adviser you should contact them right away.  He or she often can help you round up the necessary documents.

If possible, encourage your parents to set up a "financial map" or "plan".  In this should be detailed instructions of the location of their financial accounts, safe deposit boxes, and contact information for their financial professionals.

Locate a power of attorney

It's not a bad idea to appoint a power of attorney once you hit retirement age.  If your parents have already named you as their agent in their power of attorney, you'll need to show these documents to every financial institution you deal with.

Most banks and financial institutions will not even talk to you until you have this proof.  If you'll be handling all bills and accounts indefinitely, it might even be better to add your name onto the account itself.

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