What would happen if you had to suddenly take over management of a loved one’s money and finances? If a parent becomes incapacitated, someone has to take over paying bills and managing their money. It happens to many caregivers. Are you prepared?
Here are 10 things you should know about your loved one’s finances:
- Have they named a durable power of attorney to manage their finances?
The first step is to find out if they have named a Durable Power of Attorney (POA). Without a POA in place, you’ll have to go to court to get guardianship of your loved one in order to access accounts on their behalf. You may also consider establishing a revocable trust or conservatorship.
- Where do they keep their financial records?
Whether they keep their money and documents in a bank, a safe, or under the mattress, you need to know where to find records when you need them. What is the location of keys or codes to lock boxes or safes?
- What are their bank account numbers and names of their financial institutions?
In addition to knowing where they keep their money, you need specifics on all account numbers. What banks do they use? Who is their mortgage company? Do they have an investment firm? What kind of documentation do the banks need in order to allow you to exercise your financial power of attorney?
When gathering information about their credit card accounts, see if it’s possible to lower the credit limit, and lower the daily cash withdrawal limits for debit cards.
- What are their monthly expenses?
Gather information on their mortgage, car payment, credit card debt, electric bill, prescription drugs, and other expenses. Try to forecast expenses in the future, when their illness worsens and they have a greater need for care, like home health, personal care aides, modifications to the home, long term care facility costs, etc.
- How do they pay their bills currently?
If there are automatic deductions being taken out of a checking account, you need to know about it. Do they use online banking, or only paper checks?
- How much is their annual income and where does it come from?
Does your loved one receive a monthly pension check? Do they have dividends coming in from investments? Do they get money for a disability, or alimony?
- Do they receive Medicare, Medicaid, or Social Security?
If they become incapacitated, you may have to investigate the status and eligibility of government assistance. Consider talking to a Benefits Counselor through the Area Agency on Aging to ensure that your loved one is taking advantage of all the programs they qualify for.
- What kind of medical health insurance do they have in addition to Medicare?
Do they have health insurance provided by an employer? If they are retired, are health benefits included as part of a pension?
- Do they have long-term care insurance?
A “regular” health insurance plan does not cover the cost of assisted living or a nursing home. Did they purchase a long-term care insurance policy to cover the cost of those residences? If not, and they can no longer live on their own, what can they afford in terms of housing?
- Do they have an accountant or financial planner?
Who is it and how do you contact them? Have they done any estate planning?
Unfortunately, people with Alzheimer’s are much more likely to be defrauded. Keep an eye out for these warning signs that your loved one is being taken advantage of:
- sudden changes in bank balances, savings, or investments
- large cash withdrawals from bank accounts or retirement funds
- payment-overdue notices
- loss of services such as phone or utilities
- signs of physical or emotional abuse