When your aging mother or father showed signs of experiencing memory or cognitive problems, you grew concerned. One of your biggest worries could be about your loved one’s finances.
If you want to become your parent’s guardian, see what AARP says about overseeing finances as a caregiver. Arm yourself with knowledge as you prepare for your new role.
Opening a joint account
If your mother or father still has the presence of mind to make sound financial decisions, ask about opening a joint bank account. Even if opening a joint account becomes unnecessary, it makes sense to open one now while your parent displays mental competence. If a health condition progresses to where your loved one cannot make sound monetary decisions, you likely cannot open a joint account.
Once you become the secondary account holder, you may make deposits and withdraws and pay bills if your parent cannot. Another benefit of opening a joint account is having a second pair of eyes to look out for financial exploitation and scams.
Choosing a fiduciary
While exploring how to become a guardian for your aging parent, talk to her or him about appointing a fiduciary, which is a legal guardian of another’s assets. Fiduciaries have the power to make financial decisions for a person who cannot manage her or his financial health alone. The only way to make a fiduciary appointment legal is if a person shows full competence.
Ways to become a fiduciary include drafting a power of attorney, setting up a revocable living trust and naming a trustee, and hiring a professional fiduciary. A government agency may also appoint a fiduciary.
Taking the proactive approach regarding your parent’s financial future makes sense. The right options help you enjoy peace of mind.