As our parents age, we may find ourselves taking over their checkbooks. Their bills need to be paid even when they can no longer write checks themselves. In my work as a daily money manager I have seen many interesting arrangements. Although they mean well, adult children sometimes handle their parents’ daily finances in ways that can create messes. This month, in two consecutive posts, I will share with you best practices for paying elders’ bills.
Legal access to your parent’s money is essential. Most of us would never think of signing another person’s check. The same applies to on-line banking and debit cards. Your parent’s personal permission to use these tools is not legal permission. The account needs to be set up so that the bank recognizes you as a signer. This is most commonly done either by a power of attorney document, prepared by a lawyer and accepted by the bank, or by a joint account.
Respect your parent’s wishes about sharing information. If your parent wants other people to know the details of her finances, you can share them. If not, respect her privacy no matter how angry or demanding others, usually family members, may get. Have your parent sign a statement that names the individuals with whom you can share her information. Although this may seem formal for a family arrangement, having this written permission protects you.
Keep detailed records and be accountable for every transaction. Your parent has the right to receive accurate and complete information. If he ever needs to apply for Medicaid, the application requires an accounting of all income and expenses over the past five years. The executor of his estate may eventually want your records. Should a question arise, other family members may want to know what you have done with Dad’s money.
In my next post, I will offer three more suggestions.