What You Need to Know and Do Regarding Your Loved One’s Financial Lives

What You Need to Know and Do Regarding Your Loved One’s Financial Lives

Before there’s a Crisis – What You Need to Know and Do About Your Loved One’s Financial Lives

 

  • Unlike preparing for a pregnancy (which is a happy event), families are usually not prepared for a crisis or the demise of a loved-one
  • What information they need
  • When to step in
  • What to do
  • What documents are imperative
  • Old documents and information and online information (big and little)
  • How to assemble a team

 

What You Need to Know and Do Regarding Your Loved One’s Financial Lives

 

Unlike preparing for a pregnancy which is a happy event and advice is often given by friends who have recently had their first child, families are not usually prepared for the demise of a loved-one.  People in their 50’s and 60’s are now facing a myriad of issues and tasks when this event occurs.  According to a Harris Poll Survey, 20% said they have an aging family member who has diminished financial capacity; 42% have assumed at least some responsibility for financial decision making and 43% have had someone else assume responsibility for their family member’s finances.

 

Don’t wait for a crisis – be prepared.  There are many facets of being prepared:  legal, financial, real estate, pets and more.  Making preparations while the loved-one is alive and sound of mind will greatly reduce the pain of managing this process.

 

Depression era seniors grew up in a world of paper and of holding on to possessions.  They have paper checks, paper bills, paper records, photographs, newspapers, magazines and more.  They are not online and neither are their documents.  As they age, they can have difficulty remembering where their accounts are, what needs to be paid and when, that they have a stamp, coin or gun collection; that they put dollar bills into books in the bookcase.  If they have emails, user names and passwords, it is unlikely they remember them.  There may be tax or water liens on their house not because there isn’t money to pay them, but they put the bill in a drawer and/or didn’t open the mail.

 

What to do:

Divide and conquer.  Identify all bills (annual, monthly, quarterly, intermittent).  Pay those that need immediate attention, set up a payment schedule for all others.  Look at your own bills as a guide for categories that might be missing from your parent’s list, especially the annual ones such as real estate taxes, insurance and water.  Create a financial inventory of accounts.  Make a list of IRA rollovers and annual mandatory distribution requirements.  Create a list of important documents (military records), titles, deeds and assets such as stock certificates.   If you can’t find the documents, file for a replacement.  If there are trusts, make sure all assets are listed in the trust, as often people forget to add new assets to their trust.

 

Contact all advisers for your parents – attorneys, bankers, asset manager, CPA to ensure everything is accurate, up to date and ‘on-file.’  Most importantly, make sure the legal documents are up to date (will, living will, durable power of attorney, medical power of attorney, trusts, etc.).  If not or you don’t know, contact their attorney for a review.  And, of course, if you do not have a durable power of attorney, your loved-one must be present in any discussions.

 

Helping seniors and their families prepare for these times can take a village.  To assist families in preparing this all important information, we have created a Personal Affairs Record.

Unlike preparing for a pregnancy which is a happy event and advice is often given by friends who have recently had their first child, families are not usually prepared for the demise of a loved-one.  People in their 50’s and 60’s are now facing a myriad of issues and tasks when this event occurs.  According to a Harris Poll Survey, 20% said they have an aging family member who has diminished financial capacity; 42% have assumed at least some responsibility for financial decision making and 43% have had someone else assume responsibility for their family member’s finances.

 

Don’t wait for a crisis – be prepared.  There are many facets of being prepared:  legal, financial, real estate, pets and more.  Making preparations while the loved-one is alive and sound of mind will greatly reduce the pain of managing this process.

 

Depression era seniors grew up in a world of paper and of holding on to possessions.  They have paper checks, paper bills, paper records, photographs, newspapers, magazines and more.  They are not online and neither are their documents.  As they age, they can have difficulty remembering where their accounts are, what needs to be paid and when, that they have a stamp, coin or gun collection; that they put dollar bills into books in the bookcase.  If they have emails, user names and passwords, it is unlikely they remember them.  There may be tax or water liens on their house not because there isn’t money to pay them, but they put the bill in a drawer and/or didn’t open the mail.

 

What to do:

Divide and conquer.  Identify all bills (annual, monthly, quarterly, intermittent).  Pay those that need immediate attention, set up a payment schedule for all others.  Look at your own bills as a guide for categories that might be missing from your parent’s list, especially the annual ones such as real estate taxes, insurance and water.  Create a financial inventory of accounts.  Make a list of IRA rollovers and annual mandatory distribution requirements.  Create a list of important documents (military records), titles, deeds and assets such as stock certificates.   If you can’t find the documents, file for a replacement.  If there are trusts, make sure all assets are listed in the trust, as often people forget to add new assets to their trust.

 

Contact all advisers for your parents – attorneys, bankers, asset manager, CPA to ensure everything is accurate, up to date and ‘on-file.’  Most importantly, make sure the legal documents are up to date (will, living will, durable power of attorney, medical power of attorney, trusts, etc.).  If not or you don’t know, contact their attorney for a review.  And, of course, if you do not have a durable power of attorney, your loved-one must be present in any discussions.

 

Helping seniors and their families prepare for these times can take a village.  To assist families in preparing this all important information, we have created a Personal Affairs Record.

 

To receive the PDF click here PersonalAffairsRecord.