How to Unscramble a Loved One’s Finances

Sometimes caregivers have to suddenly assume the financial responsibilities of their loved one. What are the immediate things you need to know to quickly get started?

While some people might relish the idea of spending someone else’s money, taking over the financial affairs of a loved one can be one of the most difficult caregiver responsibilities for a variety of reasons. If you find yourself suddenly faced with this duty, I’ve put together a few things to consider to help you get organized.

Are you authorized to act on your loved one’s behalf? If your loved one is not your spouse or minor child, you will likely need to be named in a Durable Power of Attorney for Finances. A Durable Power of Attorney is a legal document that details who and how your loved one wants to handle their financial affairs either when the document is signed or when a specific event occurs (e.g, the person becomes disabled, incapacitated or dies). If a power of attorney does not exist, a lawyer can guide you on how to best proceed. You will need a copy of this document if you do not already have one.

Identify and access bank accounts. If you loved one is able to tell you, identify all cash, investment and credit accounts. Contact these institutions as soon as possible so that you can access the accounts and review the statements.

Review account statements. When reviewing the statements, look for and make note of:

  • EFT deductions (monthly bills) or transfers to other accounts
  • EFT deposits such as interest, social security, pension
  • Ending balances of accounts
  • Due dates for monthly credit/loan payments and amounts
  • Charges since your loved one was ill. Does someone else have access to the bank account or credit card?

Review mail. Review your loved one’s mail for bills not automatically drafted from their bank account. You may want to consider having their mail temporarily forwarded to yours or a trusted family member’s home or getting a P.O. box if someone is not able to collect the mail regularly.

Consider a budgeting app/software. If you have the time to set up and have gotten access to accounts online, using an app like Mint or Personal Capital, or a software such as Quicken may help you keep everything organized and available to provide tracking for your loved one and other family members who may be interested in monitoring your progress or the accounts.

Consider a bill paying service. Many banks already have a bill-paying feature; however, these services actually retrieve the bills for you. The two that looked most interesting were PayTrust ($10/mo) and MyCheckFree (free).

Consider delegating this responsibility. If you are able to delegate this responsibility to a trusted sibling or family member, it can considerably relieve you to focus on the other responsibilities on your caregiver to-do list. The two of you can then check in on a regular basis to keep each other informed of the financial circumstances, or the person you delegated to can meet directly with your loved one. As primary caregiver, however, you may be incurring expenses on behalf of your loved one or making decisions about current or future care, so knowing about the loved one’s financial position can be helpful.

Before you delegate this responsibility, you must have the legal right to do so. If you are uncertain, an attorney can provide the appropriate guidance. Some tips for delegating:

  1. Choosing someone nice or responsible are not the main qualities for this job. The person needs to be organized, have integrity and be good with finances.
  2. Ask for regular updates of the accounts and the supporting documentation (for example, statements, a balance sheet or income statement from their financial app). A person with an accounting or financial background (family member or otherwise) will not be offended by this request and will do so without prompting. If they are upset by your request, find someone else. Seriously!

Your loved one’s financial affairs will never be something that can be set up and set aside, but you can do some relatively quick planning that will alleviate a little of the daily work and stress by reviewing accounts regularly and looking into setting up financial apps, bill paying services and perhaps enlisting the help of a trusted family member.

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