Checklist for Taking Over Parents' Finances the Right Way

Do you remember when you were younger, how your parents seemed to know everything there is to know about the world, including money? It astounded and amazed you then, right?

Now it's time for you to give back for all the financial and emotional care they bestowed upon you in the past through financial planning for aging parents.

It's not just about paying bills or monitoring bank accounts; it's about protecting their well-being, preventing financial abuse, and honoring their wishes.

Here's a step-by-step checklist for taking over parents' finances the right way in Escanaba, MI (located 55 miles north-northeast of Menominee).

1. Start the Conversation Early

Before jumping into spreadsheets or statements, begin with a compassionate, honest discussion.

Tips for Getting Started:

Choose a quiet, stress-free time to talk.
Frame the conversation around helping, not taking control.
Ask about their preferences and long-term financial goals.
Be patient and listen carefully to their concerns.

This stage is as much about building trust as it is about gathering information.

2. Get Legal Authority

You'll need the right documents to manage your parents' finances legally. Without legal authority, banks and institutions may deny access to important accounts.

Key Documents to Secure:

Durable Power of Attorney (POA): Grants you the ability to handle financial matters.
Healthcare Proxy or Medical POA: Allows you to make medical decisions (often needed in tandem with financial decisions).
HIPAA Authorization: Permits access to medical records that may impact financial decisions.
Will and Trust Documents: Review and ensure they're up to date.

It's best to consult an elder law attorney to make sure these documents are valid and meet your parents' needs.

3. Create a Comprehensive Financial Inventory

To manage your parents' finances effectively, you'll need a full picture of their income, expenses, debts, and assets.

Information to Gather:

Bank accounts (checking, savings)
Credit cards and loan accounts
Retirement accounts (401(k), IRAs, pensions)
Investment portfolios
Monthly bills and subscriptions
Insurance policies (health, life, auto, home)
Social Security or pension benefits
Property deeds and titles
Safe deposit box contents
Tax returns (last 2-3 years)

Organize this data in a secure, central location (digital or physical) and keep it updated.

4. Monitor and Simplify Financial Accounts

Over the years, your parents may have opened multiple accounts or subscribed to services they no longer use.

Action Steps:

Close redundant or unused accounts.
Consolidate investments, if appropriate.
Cancel unnecessary subscriptions or memberships.
Set up automatic bill payments for utilities, rent/mortgage, and credit cards.

This not only reduces the chance of missed payments but also makes the finances easier to track.

5. Establish a Budget Based on Current Needs

Your parents' income and expenses may look very different now than in their younger years. It's important to evaluate their current financial situation and create a sustainable plan.

Budgeting Priorities:

Essential expenses (housing, food, utilities, healthcare)
Non-essentials (entertainment, travel)
Emergency fund
Long-term care planning
Debt repayment

Review their monthly cash flow and ensure their spending aligns with available resources.

6. Protect Against Scams and Financial Abuse

Seniors are often targets for fraud, including phone scams, phishing emails, and fake charities. Even well-meaning acquaintances can sometimes take advantage.

Protective Measures to Take:

Enroll in credit monitoring services.
Add fraud alerts to accounts.
Review monthly bank and credit card statements.
Opt out of junk mail and robocalls.
Use tools like Trusted Contact services through financial institutions.

If you suspect abuse, contact Adult Protective Services in your area immediately.

7. Manage and Organize Paperwork

Financial documents can quickly become overwhelming if they're not organized. Go through your parents' paperwork and decide what to keep, digitize, or shred.

Documents to Keep:

Tax returns (keep for at least 7 years)
Insurance policies
Wills and POA documentation
Property deeds and vehicle titles
Bank and investment statements (last 1-2 years)

Invest in a secure filing system or password-protected digital storage to keep sensitive information safe.

8. Coordinate with Siblings or Other Family Members

Transparency is key to avoiding misunderstandings or family disputes.

Tips for Family Coordination:

Hold a family meeting to discuss responsibilities.
Share updates and documentation regularly.
If multiple people are involved, define roles clearly (e.g., one manages healthcare, another handles bills).
Keep personal and financial boundaries in place.

If needed, consider using a third-party financial advisor or eldercare mediator.

9. Plan for Eldercare Costs

Long-term care, like assisted living, home care, or nursing homes, can be expensive. To avoid financial strain down the road, begin planning early for caregiving and money-related issues.

Options to Explore:

Long-term care insurance (if they have a policy)
Healthcare planning
VA benefits (for eligible veterans)
Selling or renting property for managing senior expenses
Assisted living prep

Having a financial plan for potential long-term care needs gives peace of mind and helps avoid last-minute decisions.

10. Involve Trusted Professionals

Managing your parents' finances isn't something you have to do alone. Trusted professionals can provide guidance and ensure you stay compliant with financial and legal requirements.

Professionals Who Can Help:

Elder law attorneys: For estate planning and legal documents.
Financial planners: To optimize savings, income, and investments.
Accountants: For tax planning and filing.
Geriatric care managers: For navigating healthcare and living arrangements.

Choose professionals with experience in senior financial planning and clear fiduciary standards.

11. Respect Their Independence and Dignity

One of the most important aspects of managing a parent's finances is remembering that it's still their money and life. As much as possible, include them in decisions and keep them informed.

Ways to Support Their Autonomy:

Let them handle tasks they're still comfortable with.
Review decisions together before acting.
Keep communication open and compassionate.
Reassure them that the goal is to support, not control them.

Checklist for Taking Over Parents' Finances - Time To Get Serious

With the right approach and a solid checklist for taking over parents' finances in place, you can safeguard their financial future while promoting their independence and well-being.

At Lakehouse Escanaba, we always want our residents to feel safe, engaged, and happy. That's why we provide a welcoming, caring environment with a warm community and myriad amenities.

If you are still searching for an assisted living community in Michigan for your aging parents, schedule a tour of our community today.