As the years go by and mom and dad age, life can become complicated. Certain things are practically impossible to prepare for, while others, like finances, can and should be organized and taken care of early on. What do you need to know about your parents’ finances?
Kurt Kazanowski, a hospice, homecare and senior care expert, who is author of A Son’s Journey: Taking Care of Mom and Dad, says children should know the answers to these 10 questions when it comes to their parents’ 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 parents in order to access accounts on their behalf.
- 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. Also find out 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 and mortgage company do they use? Do they have an investment firm? How many credit card accounts do they have and where do they keep their statements?
- What are your parents’ monthly expenses? Gather information on their mortgage, car payment, credit card debt, electric bills and other expenses.
- How do they pay their bills? If there are automatic deductions being taken out of a checking account, you need to know about them. Do they use online banking/bill pay or only paper checks?
- How much is their annual income and where does it come from? Do your parents receive monthly pension checks? 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 your parents have become incapacitated, you may have to investigate the status and eligibility of government assistance.
- 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? Ask if you can meet with their financial professional with them to discuss their situations.