As parents (or you, if you're a senior) age, younger generation family members should be aware that the oldsters could become more dependent on others to help them cope with their finances. Here are some matters that sooner or later may require the assistance of a younger generation family member or acquaintance, first for active seniors and second for seniors who are in declining health.
Keeping an eye on active seniors. Here are four particularly important matters to attend to as your parents age:
- Insurance. Make sure your parents keep and maintain the right kind and amount of insurance. Some seniors are either victimized by unscrupulous insurance agents who sell them unneeded coverage or they go out on their own and buy narrowly defined coverage (cancer insurance, for example) that's a waste of money or they simply drop needed policies.
- Health care. Make sure the seniors in your life are getting the quality of health care that they deserve and are entitled to and they maintain the appropriate Medicare supplemental and drug coverage. It's difficult enough for a younger person to navigate the health care maze. Sometimes a younger generation family member will have to assist or intervene to make sure that the senior is receiving appropriate health care.
- Housing. As they age, some retirees including perhaps your parents, seem reticent, if not downright obstinate, in deciding that a change in housing may be desirable. "Change in housing" may mean selling a too large and/or too-tough-to-maintain house and moving into something more manageable. It could also mean moving into assisted living or even the dreaded nursing home. But it is incumbent upon a responsible child to look for signs that the parent can no longer comfortably and safely live in the current housing. It may take some prodding to advance the notion of a change in venue, and be prepared for them to vigorously oppose your suggestions. Enlist the help of your siblings or close friends of your parents. Sometimes a gentle show of force will prove decisive.
- Day-to-day money concerns. Finally, be alert for situations where there might be problems handling money. A change in spending habits, late filing of tax returns, late payment of bills may indicate that a senior is simply unable to maintain his or her day-to-day finances. It doesn't necessarily mean that a parent is having trouble making ends meet, but the assistance of a child or another family member or acquaintance is probably necessary. Another matter to be wary of is that seniors are all too often the victims of scam artists.
When health declines. If you are responsible for taking care of the financial affairs of a parent or another family member or acquaintance whose health or mental acuity is declining, answer the following questions:
• Do you know where his or her financial records are?
• What investments does he or she have?
• How about income taxes?
Drawing blanks? If so, here are some important items to attend to:
- Estate planning document review. Examine the person's will and durable power of attorney, which appoints someone to handle his or her financial affairs, and advance directive, which provides information for end-of-life care. Make certain information is current, you have a copy, and you know where the original signed documents are located. Ideally, the power of attorney designee should be nearby. Be certain that the power of attorney adequately covers every possible situation, including handling of taxes and retirement plans. If your senior has debt problems, make sure that your durable power of attorney gives you the right to be served a summons if the bank forecloses on his or her home or condo. You also may need power to make arrangements for long-term care.
- Access to important documents. Obtain a key to the senior's home, as well as safe deposit box. Be sure the bank has your signature on file along with permission to access the safe deposit box. If it has not yet been prepared, assist in preparing a letter of instructions. Important matters to be including in the letter of instructions include:
- A list of information you'll need to know in the event of an emergency.
- Information on medical insurance plan information, Social Security number, date of birth, names and phone numbers of doctors, lawyers, accountants and brokers, veteran discharge dates, and marriage dates.
- Locations and information on life and disability insurance policies, deed on a home, car title, stocks and mutual funds, bank certificates and prepaid funeral receipts.
- List contents of any safe deposit boxes.
- Know the location of the checkbook and ATM card.
- Record keeping. Check the senior's tax records to make certain proper documents are getting filed. If you're noticing that bills aren't being paid or financial statements suddenly are missing, consider working with the senior or obtaining assistance. Most communities have services that can assist in bill payment and organizing tax records. You might buy a folding file box with pockets in alphabetical order. When a bill is paid, have the senior put the statement in the appropriate folder, such as "E" for electric bills. Be certain he or she is filing bank statements. You may need this information to track direct deposits, income tax deductions and charitable contributions.
- Income taxes. Set up a tickler file to remind your senior of income tax deadlines. Quarterly income tax estimates are due April 15, June 15, Sept. 15 and Jan. 15. Remind the senior about state tax payments and the April 15 income tax filing deadline. Contact the tax preparer to make sure returns are being timely filed and request a copy of the tax return. Having a tough time getting cooperation from your family member? Ask him or her to take all the tax documents when they arrive in January and February, except personal correspondence and checks, and file them in a large envelope. At the end of the February, the envelope can be mailed to the tax preparer.