At some point our parents age and the roles reverse with the child becoming the caregiver. It isn’t always an easy process but being organized and having the proper plan in place now will ease the transition later. In this blog, BlackBelt Wealth Advisory takes a deeper dive into planning for this process and how to cope with this newfound responsibility.

Organizing & Planning.

For starters, get a sense for the whole picture and what needs to be managed. Health care, home care and housing needs, estate plans, debt, retirement plans, savings and checking accounts, properties, jewelry, etc. From there you can begin to map out how you will begin to oversee the process.

Being organized is most important as you add managing another set of finances and life choices. For starters, we recommend having:

• An inventory of all sources of income.

• A monthly budget with income and expenses.

• A budget for large capital expenses over a three-to-five-year period.

• A review of health insurance plan(s) evaluating what is covered and what is not.

• An overview of all assets and all debts.

• Someone who can handle finances and decision-making.

• A power of attorney.

• An inventory of financial and legal documents.

You will also want to know where legal documents are which may include:

• Birth certificates

• Marriage certificates

• Social security cards

• Retirement documents

• Insurance policies

• Wills

• Deeds

Easing into your new role.

Aging is a process and in the beginning your parent(s) will likely want to continue to manage their day-to-day finances and be involved in decision making. If you are fortunate enough to have time, ease into things by asking questions and getting a better understanding of their complete financial situation. Begin by making things as easy as possible by consolidating accounts and credit cards. Transfer cash into one checking and one savings account (at a local bank if possible). 

With the ability to manage finances online, you may be more experienced with computers and handling setting up/managing account. If your parent(s) are computer savvy, you should check accounts regularly as identity theft is a big concern for aging adults. Use the checking account to transfer money for “spending money” for everyday purchases including food shopping, haircuts, nail appointments, gas, etc.

The Bigger Picture.

Estate plans, investments and taxes may require more handholding by you and a professional. If they have accountants, lawyers, or financial planners they use, meet with them to get a better understanding of what has been done. If you have your own partners, you may want to review things together as well. If this is a new area for you where you have little experience, talk to friends and family about who they use. We recommend doing your research. Finding the right partners both you and your parent(s) are comfortable with will help considerably.

You should understand your parent(s) insurance coverage and which companies they use for things like healthcare/Medicare, life insurance, long-term care, homeowners and auto insurance, pet insurance. How are they paying for everything? Is there something they should have, but don’t?

This may be an overwhelming list of responsibilities. You do not need to conquer it all at once, and you don’t need to do it alone. Going through this process now will help you with your own planning and providing your next of kin with a roadmap for when they find themselves in the role you now find yourself in.

The comments expressed and are for general information and not to be relied upon as financial advice. Please consult legal or tax professionals for specific information regarding your individual situation.