Before You Step in to Help… 10 Questions to Ask Your Parents About their Finances

You might have known the day was coming.  Your elderly parents are no longer able to reliably manage their finances.  Bills are going unpaid or they are “helping” people who may randomly call on the phone preying on kind-hearted elderly people.

Or the situation may be fine until a parent gets sick or becomes incapacitated.  Someone needs to pick up the financial routine.  You need to be prepared.

Preparation involves having a frank discussion about finances.  Here are some key questions you should include when that conversation occurs:

1. Where are the financial records? Are they accumulated and organized?  Can you help make that happen?  Whether records are kept in a safe, a closet, a desk drawer or they are scattered, you need to know where to find them when you need them.  That includes keys to locked drawers and combinations to safes.

2. What are the monthly expenses? You need to know about the recurring bills for the mortgage, utilities, credit cards, car payments and any other regular bills.

3. How do the bills get paid now? Are expenses automatically drafted or do checks need to be written?  Or is online banking part of the picture?

4. What financial institutions are in play? Is the mortgage at the same bank as the checking account?  Are there investment accounts?  Who are the contacts at these institutions?  What are the account numbers (and passwords)?

5. What are the sources of income? What is the amount of the Social Security payment?  Is there a pension check coming in?  How does it get into the bank?  Are there stock dividends, alimony payments or disability checks?

6. Are there other Government benefits? Social Security is fairly common, but it is possible that for some reason your parent does not receive Supplemental Security Income (SSI).  Do they have Medicare Benefits?  Is your parent Medicaid eligible?  Note that some government programs require that you have specific legal permissions to manage their accounts.

7. What supplemental health insurance is in place? Is there a Medigap program to cover expenses not covered by Medicare?  A Medicare Advantage plan or a Medicare Supplement plan?  A plan for drug coverage (Part D)?  Does the VA provide coverage or a former employer as part of a pension plan?

8. Is there a long-term care policy in place? If so, what are the terms and what qualifies for disbursement under the plan?  If not, you will need to determine their ability to pay for living facilities or in-home care should the need arise.

9. What professional advice is already in place? Does your parent have an existing relationship with an attorney, accountant and/or financial planner?  How do you introduce yourself into the relationship?  Is there a will in place?  A Trust?  Where is the information about such arrangements located?

10. Is there a Durable Power of Attorney? It is important to know if your parent has established a Power of Attorney (POA) for finances and medical care.  In the absence of such a document, you will need to seek guardianship through a court proceeding to gain access to accounts if your parent loses the ability to communicate on his or her own.  If there is not one, getting with an elder law attorney would be an essential first step.

Hopefully, you will not find yourself in a situation where such information is critically necessary.  Statistically, however, there is a greater chance that you will than you will not.  Planning ahead is important.  Have the conversation.

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