Initiating a difficult conversation is much easier to do in happy times. So is making a plan to take over the finances of an elderly relative.
As parents live longer, more and more children find it necessary to step in and help pay bills, make investment decisions, and even apply for benefits or arrange for long-term care. Starting early lets you discuss various options and ensure you know your relative’s intentions and desires.
The key is not only to make financial plans but to understand your relative’s wishes fully in terms of lifestyle, independence, and even critical care. The more you set up ahead of time, the less conflict and distress you both will face and the less likely you’ll need to initiate proceedings like guardianships or incompetency declarations.
Where should you begin? Set up a HIPAA authorization form and a Health Care Power of Attorney. The HIPAA authorization form gives the designee access to important medical information, while a Health Care Power of Attorney allows the designee to make critical medical decisions on your loved one’s behalf. Also, take the time to understand where and how your relative would like to live if their health fails. Remember, preparing for the future involves more than simply taking care of finances.
Then protect assets by creating an estate plan that includes a Property Power of Attorney; the designee is granted the legal authority to act on their behalf and can avoid the need for guardianship proceedings.
Once you have the basics in place, try to automate as many transactions as possible. Set up direct deposits and automated payments for housing, utility, and other standard expenses. Locate important items like insurance policies, benefit plans, retirement plans, and bank accounts, and keep them in one place. Look for supplemental benefit plans from previous employers and long-term care insurance your relative may have forgotten.
And research federal and state benefits: Check out benefitscheckup.org and eldercare.gov for discounts on taxes, utility bills, and health care and social service providers in your area.
In short, initiate these tough conversations now and help your relative set up a system where their life today can be smoother and more worry-free. Then, as time passes, you will be prepared, if necessary, to take more control… secure in the knowledge that you and your relative are prepared for almost any eventuality.