Did you know that about half of the Americans over the age of 55 don’t have a will or life planning documents? If your parents are approaching retirement age and you haven’t had that conversation with them, now is the time.
If you’re worried your elderly parents don’t have a power of attorney, healthcare directive, or will, you came to the right place.
Read on to learn everything there is to know about taking over elderly parents finances legally.
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1. Start the Conversation
Before you can help your elderly parents with their finances when they’re elderly, you must have a conversation with them early on.
Although no one wants to plan when their parents won’t be able to make financial decisions on their own, having a casual conversation can get help get everyone planning.
Ask your parents to start thinking about who they want to handle their finances, healthcare directives, and estate. Having the conversation early will help make the transition smoother for them.
2. What Is the Best Route?
Once you have the conversation and your elderly parents decide they want to designate you to take over their finances legally, it’s time to determine the best route.
A power of attorney will grant you authority over your loved one’s property and finances. You will only have authority over what is outlined in the document.
A guardian of property gets appointed by the court to manage the property and finances of a family member who can’t do it independently.
Your loved one can also designate you as a trustee in a living trust and grant you the ability to handle their finances.
If your loved one receives federal or state benefits such as Social Security or Veteran Affairs benefits, they can designate you as the payee.
3. Changes Should Happen Gradually
Even if you legally take over the finances of your elderly parents, it can be a difficult transition for them. Before you sweep in and start paying all their bills and handling finances, ask them to teach you the ways.
If they teach you how they like to do things, your parents will feel they’re still in control.
Take the time of finding a caregiver you can trust and feel comfortable with if you won’t be able to do it full-time. Don’t suddenly have a person show up to take care of them, or they could get resentful.
4. Understand What It Means to Take Over Their Finances
Protecting elderly parents’ assets is more than just signing checks and paying taxes. When you take over your parent’s finances, you have to put aside your wishes and think about what is best for them.
You will have to keep your finances separate to avoid conflicts of interest and better manage their estate.
This Is How You Should Be Taking Over Elderly Parents Finances Legally
Now that you know the basics of taking over elderly parents finances legally, you’re ready to make the preparations.
Before legally handling their finances, you should start the conversation early, decide on the type of document that will work the best, make changes gradually, and understand the responsibility.
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