Talking with your parents about their money can be challenging. After all, they spent a lifetime giving you advice — not taking it from the grown-up children whose diapers they changed.
But role reversal is important as your parents age. Becoming involved in your parents’ financial life while they are in good health will help you to gauge whether they have saved enough for retirement, are able to pay bills and taxes, or have any vulnerability to the growing number of scam artists targeting seniors.
“You don’t need to duplicate your parents’ good efforts to plan their estate,” says Sherry Wallis, an STCU community development officer. “You just need to know where they keep everything for the time when you may need it.” Wallis suggests asking your parents if you could help them create a financial folder to collect the most important documents and contacts.
Most seniors understand the benefit of having an emergency plan in place in case something happens to them, and most will appreciate your willingness to shoulder some of the burden to pull together critical documents for the folder.
Wallis suggests seven things you need to know about your parents that should always be included in your parents’ folder:
1. Directions! How to access their safe deposit box to secure important documents such as the will, marriage license, property records, insurance policies, records of military service, and so on.
2. Inventory! A list of personal property such as expensive jewelry, artwork, or other valuables. You can do this on paper or by going room-to-room with a video camera to record the objects.
3. Accounts! A simple list of insurance policies, financial accounts, and obligations, including the account numbers and contact information.
4. Credit cards! A complete list of all credit cards.
5. Statements! Location or copies of statements for pension plans, Social Security earnings, 401(k) plans, and Individual Retirement Accounts (IRAs).
6. Contacts! Information needed to contact their physicians, relatives, business partners, attorneys, and other key people.
7. Bill schedule! A schedule of recurring bills, such as taxes, loans, utilities, and so on.
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