Your aging parents do not need help to manage their finances now, but that could change in a few years. To prepare for overseeing their care and acting as their caregiver, you want to better understand how to manage their finances.
AARP explains financial tools for family caregivers who must oversee a loved one’s monetary affairs. Prepare yourself for every aspect of acting as a guardian for your parents.
Joint bank account
Your parents still make payments and manage money themselves, so talk to them about adding you to their bank account. The only way to do this is while the account holder remains mentally competent, so look into it sooner rather than later. That way, if something happens and your mom and dad cannot make their own financial decisions, you have the authority to step in for them.
Your parents may want to name you or another loved one as their fiduciary. This person acts as the legal guardian of your parents’ assets. The power of attorney legal document allows an individual to serve as fiduciary when a relative or friend cannot make sound financial decisions.
Revocable living trust
Your parents may establish a revocable living trust and transfer assets into it. By naming you as their trustee, you become responsible for the trust if your parents become incapacitated or cannot manage the trust. The role may involve handling investments, maintaining insurance policies and managing safe deposit boxes.
It makes sense to get ahead of the financial aspects of serving as someone’s guardian. Being proactive can save you a lot of time and energy.