Helping an Aging Parent: 9 Documents to Have in Place Before You Need Them
The hardest part of helping a parent with money is usually not the money. It is that without the right papers you may not be allowed to help at all. A bank will not discuss an account with you, and a hospital may not tell you what is happening, however obvious it is that you are the daughter who shows up.
These papers are far easier to put in place while everyone is well. Once a parent can no longer make decisions, some of them cannot be signed, and the alternative is slower, costlier and decided by a court.
Here are nine documents to ask about, a one page list to fill in together, and a way to begin the conversation that keeps it kind.
A single page that says where everything is saves a great deal later. Example data.
The short version
Two documents let someone act: one for money and one for health decisions.
Several more say what your parent wants, so nobody has to guess.
The rest is a list: accounts, policies, people to call.
Ask while everyone is well. That is when it is simplest.
The nine
Document | What it does | Why it matters |
|---|---|---|
1. A power of attorney for finances | Names someone to handle money matters if your parent cannot | Without it, a court process may be the only route |
2. A health care proxy or power of attorney | Names someone to make medical decisions | Doctors need to know who may speak |
3. A living will or advance directive | States wishes about care | It spares the family from guessing |
4. A release for medical information | Lets providers talk to named people | Otherwise privacy rules can shut you out |
5. A will | Says who receives what | It settles questions before they are asked |
6. Beneficiary forms | Name who receives each account or policy | These generally override a will |
7. A list of accounts | Banks, pensions, investments, debts | You cannot manage what you cannot find |
8. Insurance policies | Health, home, life, long-term care | Claims have deadlines and conditions |
9. Key contacts | Doctor, attorney, accountant, adviser | One call to the right person saves ten |
The names and exact forms of the first four vary from state to state. An attorney who works with older clients can prepare them properly, and for most families that is money well spent.
The two that let you act
Numbers one and two do different jobs and are often held by different people. The financial one lets a named person pay bills, deal with the bank and sign on your parent's behalf. The health one covers medical decisions only.
Neither takes anything away from your parent while they are able to decide for themselves. That is worth saying out loud, because the fear of losing control is the commonest reason these never get signed.
The one that gets overlooked
Number six. A retirement account or life insurance policy is generally paid to whoever is named on its own form, whatever the will says. Many of those forms were filled in decades ago and name someone who has since died or divorced out of the family.
Checking takes one call to each provider. It is the quickest item on this list and it prevents some of the most painful surprises.
The one page list
Sit down together and fill in a single page. It does not need balances. It needs to say what exists and where.
Line | What to write |
|---|---|
Bank accounts | Which banks, and which kinds of account |
Income | Social Security, pensions, anything else, and the day each arrives |
Regular bills | What is paid automatically and from which account |
Insurance | Each policy, the company and where the papers are |
Debts | A mortgage, loans, cards |
Documents | Where the originals of the nine are kept |
People | Doctor, attorney, accountant, a trusted neighbor |
One page, kept somewhere both of you know. If that is all you manage this year, it is still the difference between knowing where to start and not knowing.
Seeing your own position clearly comes first. Example data.
How to begin the conversation
Start with your own. "I have been sorting out my own papers and it made me wonder about yours" is far easier to hear than "we need to talk about your affairs".
Ask for help, not information. "If something happened, who would you want me to call?" invites an answer.
Do one thing at a time. The list first. The documents on another day.
Let your parent choose the people. It is their decision who acts for them.
Come back to it. A first conversation that ends in "I will think about it" has still done its work.
Look after your own side too
Helping a parent has a cost in time and often in money, and it tends to land on daughters. Before you offer either, know what you can sustain. Our post on supporting aging parents without wrecking your own plan works through what pausing your own saving costs.
And put your own nine in place. Everything on this list applies to you as well, and doing yours is the best way to open the subject with them.
Start with your own picture, free
La Soglia, the free membership of the Money Mastery System, holds everything you own and everything you owe in one place, with no bank connection and no card. It is the list of accounts from this post, already organized, and it is a good thing to have ready before anyone needs it.
Bring it to the Collective
How did you raise this with your own parents? The Money Mastery Collective has a discussion feed open on the free membership, and the women there have been through every version of this conversation.
Questions we hear
What legal documents should aging parents have?
A power of attorney for finances, a health care proxy, an advance directive, a release for medical information, a will and up-to-date beneficiary forms.
What is the difference between a financial and a health care power of attorney?
One names a person to handle money matters and the other names a person to make medical decisions. They can be different people.
Do beneficiary forms override a will?
Generally yes. Retirement accounts and insurance policies are usually paid to whoever is named on their own form.
How do I talk to my parents about their finances?
Start with your own planning, ask who they would want you to call, and take it one step at a time. A list of accounts is a gentle first step.
References
This post describes commonly used documents in general terms. Their names, forms and rules vary by state, and it is not a substitute for advice from an attorney licensed where your parent lives.
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A note on what this is
This article is educational. The Money Mastery System is an educational tool, not financial software, and nothing here is legal, tax, investment or financial advice. The documents named here are described in general terms and their requirements differ from state to state. For guidance on your own circumstances, please speak with a qualified professional who knows them.
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