The idea of managing finances for the parents is intimidating for young adults. Many of them still find it hard to manage their own expense at such an early age. However, you cannot ask for more time when an emergency strike.
A detailed plan will help simplify the whole transition of the financial decision from your parents to you. You must have it if your parents are ready to enter the uncertain age of 70s. The situation may come as a surprise for you, but it is inevitable.
In this article, we have mentioned some tips for young adults to manage the finances of parents once they are incapable of managing themselves.
List the Accounts and Documents
You need to have complete detail of the wealth, assets, debts, and savings of the parents to manage them. Contact their accountant or financial advisor to make the whole process easier. Otherwise, it will involve some great detective work to find every account and document related to the finances.
Ask your parents to create the list during their healthy years. They can submit it to their attorney if providing you with the list at an early age is not okay for them. But make sure you have the contact of the person who has the map of your parent’s investments.
Pay the Expenses
Start paying off their bills and debts once you have the financial information. Create a repayment plan based on the priorities. Consult someone with sound financial knowledge for the payment plan.
Your parents might leave a few bills behind their payment because of some reason. You should make the payments from your account if their funds are not accessible. You can contact private lenders like Extramile Finance for an instant decision on the loans.
Collect the Most Important Documents
You need to locate and preserve some of the most critical documents left by your parents. The banks, lenders ask them, and the asset managers to give you the control. Do not send the original documents unless it is necessary.
Even the safest form of delivering the documents has some level of risk. The documents generally include a power of attorney form, will, and healthcare proxy. You can even help the parents prepare these documents before they face a medical emergency.
Open the Deposit Boxes
The safe deposit boxes require authorization from the owners to open them in their absence. For this reason, your parents must keep a power of attorney at home. You need to get the order from a court if the authorization documents are stored in the deposit box.
A witness should be present when you open those boxes. Also, record a video of the whole event to avoid any accusations from the siblings. It may sound extreme, but there is no point in arguing what was in the box without its owner.
Take Orders from Court
A medical condition such as dementia will leave your parents incapable of making a decision. If they haven’t signed a will or power of attorney, a court order is required to decide on their behalf. It is time to take the guardian role and take care of them.
You have to prove the father or mother is incompetent to live without your assistance. Hire an attorney to guide you through the whole process. Also, prepare yourself for the emotional and financial stress while being a guardian.
Documents Every Expense
The bills you are about to pay, the debts you have to settle, all these things must be documented. You must keep a copy of the receipts whenever you spend money on behalf of your parents. Create notes of the advice from an attorney and financial advisors.
They will help while creating the overall budget and finance management. Your siblings might check the details for various reasons. You will also have something to show the responsible management of your parent’s financial affairs.
Update the Investments
The investments from your parents need proper evaluation before any decision. You may have to continue the investment if the parents still have years of life ahead. Also, their returns will cover future expenses without stressing the budget.
However, they might have made some terrible choices with the investment. Don’t feel surprised if every bit of savings is diverted towards the same share market. Take help from a financial advisor to decide whether to make some changes or respect the financial decisions of parents.
Ask for Help
It is okay to feel overwhelmed with such a huge responsibility. You will need help from family, friends, attorneys, and other experts to counter problematic situations. With their help, some of the most common mistakes will be avoided at a much lower cost.
In the end, you have to make some tough decisions if your parents have suffered a medical emergency. It will be a time when emotions may cloud your financial judgment. Therefore, you must have a plan in advance to efficiently manage the finances of your parents.