Over 40 million Baby Boomers reached the official retirement age of 65 in 2015, with over 2.5 million surpassing 70. Another 20 million Americans in their 70’s and 80’s are trying to manage independence and financial security deeper into retirement.

Today’solder generation is fortunate to live in a time of abundance and fast advancing healthcare. Seniors are living longer, and that can present new challenges with maintaining independence as long as possible. Retirees must manage their finances, healthcare, and other needs that come with aging. There comes a time when they will require the assistance of family and loved ones to keep everything in check.

Financial and personal support may come in the form of personal care, making and keeping appointments, and preparing healthy meals. Increased dependence on others can raise monthly financial expenses and impact their quality of life.

Health issues can arise suddenly. A healthy parent could fall or have a stroke, and never fully recover. Putting these measures in place while everyone is healthy allows for well thought out planning rather than crisis control.

Early preparation will ensure they have the support required and the finances in place to provide for their long-term needs. You should have the following documents in place before a health or financial emergency arises.

  1. Know where to locate important documents. Often parents are uncomfortable talking about their death and inheritances for children or grandchildren. However, it is essential that adult children understand their parents’ wishes and where they keep important documents.

 Children (or the chosen executor) should know where parents maintain obank accounts and investments. They should also know where parents file important papers such as wills, health care proxies and power of attorneys. Having copies of these documents in hand will help in the event of an emergency.

If your parents are currently unable to care for themselves, and you need to locate their accounts, start with recent tax returns which will indicate any dividend and capital gain payments for investments and bank account interest. Meeting and staying in contact with financial advisors, accountants, attorneys and people who help with their money management will help if you need to manage their finances at a later time.

For those who want to keep documents in a bank safe deposit box, ensure someone else has access and copies are readily available. When everything is in a bank safe deposit box, it can be difficult to gain access when you need the paperwork right away. At home, fireproof safes are another good option for important papers.

Create a list of all account numbers and contacts for bank and investment accounts and insurance policies in a single location.

 

  1. Help to pay Typically, one of the first things children help parents with is keeping up with bills. Parents can add a child to a checking account or create a power of attorney, giving a child permission to write checks on an account. If there are investment decisions required, the authority may be expanded to meet the needs of the parent(s).

 

There are risks when adding a child to an account, but parents can restrict access based on the relationship. It is also possible to pay an attorney or other third party to take care of those needs. Adding a child as a joint owner could impact inheritances, as the joint owner will receive the balance on the account upon the owner’s death, rather than transferring to the estate, as with a power of attorney.

When there is a delay in setting up this assistance, parents might miss important payments that could have long-term consequences. Rental evictions, foreclosures, and other actions from creditors can complicate the situation. Adult children can pay attention to notices in the mail and talk to parents about getting bills paid. In some cases, you can receive duplicate statements to head off any problems that might arise.

 

  1. Ensure someone has a power of attorney. A Power of Attorney (POA) authorizes a third party, often a child, to make decisions on behalf of the parent. That person can manage accounts, write checks, and otherwise act on the account holder’s behalf. Without one, it can be impossible to gain any information on accounts short of a court order, deeming your parent incompetent. No one wants to go through the time and cost associated with court involvement.

 

  1. Have the parents sign a health care proxy or durable power of attorney, which gives directives on health care choices if they are unable to voice their wishes. The healthcare proxy spells out what life-saving medical treatments they desire and can assign a third party to make any decisions not covered by the directive. Proxies must be in place before the need arises.

 

  1. Have a will or living trust in place to spell out their wishes for their property after death. Everyone who owns anything should have a will or trust, laying out who gets what when. It simplifies the property transfer and can protect loved ones from disagreements and disputes after the death of a loved one. Lack of a will can lead to disagreements and misunderstandings which can have a long-term impact on family relationships. If there are substantial assets or assets in multiple states, a living trust may accomplish the asset transfer more efficiently.

 

  1. Maintain good records of all activities on the parent’s accounts. When a child takes over a parent’s finances, they have a fiduciary duty to act in good faith. Siblings or other relatives could challenge your handling of the finances, which could lead to arguments. When you maintain good records, you have proof you acted in good faith and can show others (including a judge), if needed. Document who you paid and when. Keep bank statements with check images in a file. Also, keep a written record of all purchases made for their care.

 

Good planning can alleviate some of the stress that comes when a parent’s needs increase. It will save both time and money, aso you can handle the challenges within the family, without petitioning the court for access to a parent’s accounts or to make medical decisions on their behalf.

If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a FREE financial analysis.  Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs.  You don’t have to struggle with high interest credit card debt any longer.  Call (855) 250-8329 or get in touch with us by sending a message through our website.