Financial Management for Seniors

Today's informative post comes from a guest blogger, Rick Rodgers, Certified Retirement Counselor who just published a new book about planning smart for your retirement. His contact information is below the post, enjoy!Caregiving for elderly parents can quickly expand to financial management. There are some important steps to take before you find yourself in this situation to ease the transition. Some people are uncomfortable talking about finances - especially the World War II generation. However, being prepared is always a prudent step in the matter of finances. Here are a few steps to take while your parents are still involved:Take Inventory –Where are the bank records? Brokerage statements? Insurance policies? Etc. I would recommend downloading one of the free financial organizers available on the internet and helping your parents fill it out. You can find several of them at Today’s Seniors website (www.todaysseniors.com/pages/Organizers.html). You will want to keep one copy for yourself at your own home. Make sure it is updated at annually and verify that all of the documents are still kept in the same place. A more extensive checklist can be found in a book by Dan Taylor, "The Parent Care Solution".Verify all Legal Documents are in Order –Your parents should have a Will and a Durable Power of Attorney (POA). The POA allows you to step in to handle their financial affairs without the need to have your name on the accounts. You will want several original POAs. Some financial institutions will only accept an original. It would be a good idea to get the POA to the financial institution ahead of time and obtain their acknowledgement that everything is in order. In some circumstances it may be better to have a living trust set up for your parents and have all assets held by the trust. You handle their affairs in this way by serving as a trustee. You should consult an attorney specializing in estate planning or elder law to determine if this is applicable to your parent’s situation.Healthcare -The Privacy Rule in the Health Insurance Portability and Accountability Act (HIPAA) of 1996 took effect on April 14, 2003. The HIPAA Privacy Rule regulates the use and disclosure of information from health care providers, employer health plans, health insurers, and other medical service providers. You will need a medical POA that complies with HIPAA regulations to have access to your parent’s medical information. This could be a separate document or the language could be included in your durable POA. An Advance Healthcare Directive is yet another form (also known as living wills, advance directives, or advance decisions) that provides instructions specifying what actions should be taken for their health in the event that they are no longer able to make decisions due to illness or incapacity This document names a surrogate to make care and treatment decisions on their behalf, and give instructions about their health care wishes. Your attorney may include this language in the medical POA.Talk to your Siblings –Keep you siblings informed with of your progress. I have seen many families split over financial issues involving their parents. Ask for their input and provide periodic updates. Rather then allow financial matters to come between you, use them to bring the family together.Finally, don’t hesitate to get professional help if you need it. It would be a good idea to have an attorney review the will and POA to make sure everything is in order. Especially if the documents are more than five years old. You may want to bring in a financial planner to review their investment holdings. Consider keeping them on retainer if you are uncomfortable managing investment accounts on an ongoing basis. You can find a fee-only planner through the National Association of Personal Financial Advisors website at www.napfa.org.Rick Rodgers, CFP®, is President of Rodgers & Associates in Lancaster, PA and author of “The New Three-Legged Stool™ A Tax Efficient Approach To Retirement”. He can be reached at rick(at)rodgers-associates.com.