If your parent or loved one needs help with day-to-day tasks, they probably also need help managing their money.
More than nine in 10 caregivers hold some financial caregiving responsibilities, according to a 2020 study from Merrill investment management in collaboration with Age Wave researchers of Orinda, California.
You may gradually realize you need to step into this role when you find stacks of unopened bills. Or you may be thrust into this responsibility suddenly, such as after a hospitalization.
In the early stages of managing a loved one’s money, you’ll likely be overwhelmed with the change in circumstances. To help get you through the first stages of your new role, we’ve created a 10-step plan:
1. Sort the bills
First, tackle that mail pile. Look for bills, as well as bank and credit card statements.
If your loved one uses online billing, you can contact the utility companies about accounts and check your loved one’s wallet for credit card information. In addition, “Review bills carefully to make sure the expenses were actually incurred and the amounts are appropriate,” says lawyer and accountant Bruce Tannahill, a Wichita, Kansas, director of estate and business planning with MassMutual Financial Group.
2. Don’t forget other payments
Even if you think you’ve figured out all the recurring expenses, remember that income tax, insurance premiums and property tax notices may arrive on an irregular schedule such as annually, biannually or quarterly. If you’re taking on a financial caregiving role for more than just a few weeks, consider having the mail forwarded to your address, Tannahill says.
3. Check on income
Gather information on insurance policies, investments, pensions and Social Security. Bank statements and tax returns should supply much of this information, and your loved one’s accountant — if your friend, parent or sibling has one — can also help, Tannahill says.
To keep any investment accounts safe, see if you can be added as a “trusted contact person” at your loved one’s brokerage. This allows the financial adviser to alert you about irregular activity but does not give you access to the money.
4. See about accessing a bank account
If your loved one is able to make financial decisions, that person can set up a durable power of attorney or add you as a joint owner to a bank account. Some states let you set up a convenience account, also called an agency account. This account allows transactions that benefit the account’s owner. You cannot use the money for your own needs, and you will not inherit the account, as you would with a joint account.
Because not all bank employees are familiar with these accounts, the Consumer Financial Protection Bureau (CFPB) suggests talking to a branch manager to find out whether or not you are able to set one up.