How to help your parents organize their finances

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Like many Baby Boomers, my wife and I have watched our parents go from complete freedom to seek help until death. We are grateful that, at critical moments, they made difficult decisions themselves, without our prompting. These decisions include when to leave the family in favor of moving to a continuing care retirement community, when to give up their car and driver’s license, and when to make a assisted living.

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Talk to your parents about their retirement plans at the earliest

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Our parents were organized and realistic people who relied on us to act in increasingly important ways as they moved from stage to stage. By identifying what they could and could not do, they were able to facilitate these changes.

Below are five categories of steps they took, sometimes with our help. These steps protected his property while he was alive and ensured that his wealth was accounted for after his death. At the same time, his actions ensured that, after his death, complications and potential family feuds were minimized.

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Each of them held key estate planning documents: a Will, a revocable living trust With one of us as the trustee, a financial sustainable Power Attorney designating one of us to act on their behalf in business matters, and a living will and durable power of attorney for health care. In these as a foundation, he ensured that his accounts were properly titled, so they were placed within the trust.

A word about revocable trusts: For most people, the main purpose of these trusts is to avoid the need for assets to go through probate. I didn’t go through the probate process, but lawyers say avoid it as much as you can. I am going through the process of closing a three parent estate with a trust and it went very smoothly. Counterclaim: It costs some to set up a trust and it can be challenging to resell all assets so they are property of the trust, or to designate the trust as a beneficiary of insurance plans. Banks in particular can have trouble getting things done. It requires a degree of organization and perseverance to make it work.

What follows is a to-do list to review at each major transition point. Several of the steps below should be started when the parent is completely independent. If they haven’t been addressed by the time a parent enters assisted living or equivalent in-home care, the clock is ticking and it’s time to complete them.

Ready to go to work? First, the property list is:

Second, the list of liabilities is:

Third, check what steps you need to take to act on your parents’ behalf:

Fourth, take steps to protect your parents’ assets:

Finally, make sure you’re prepared for the period following your parent’s death:

This column originally appeared in humble dollar and was republished with permission,

Howard Rohleder, the former chief executive officer of a community hospital, retired early after more than 30 years in hospital administration. In retirement, he has served on several non-profit boards. In May 1994, he was featured, along with five others, on the cover of Kiplinger’s Personal Finance for an article titled “The Secrets of My Investing Success”.


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