Getting older is part of life. It’s unavoidable, and so are the health effects that come with it. Sadly, many Americans are affected by mental and physical health declines. If you and your family members are not financially prepared, it can wreak havoc on your family’s finances.
CNBC reported that Alzheimer’s disease affects 1 in 9 Americans age 65 and older. That’s an estimated 6.7 million people. So preparing to confront any sort of health decline and all the financial complexities that will come with it (in case it does happen) is crucial.
Read Next: Retirement Planning: 4 Unexpected Eldercare Costs To Consider
Learn More: 7 Reasons You Must Speak To a Financial Advisor To Boost Your Savings in 2024
Fortunately, there are a number of things that can be done proactively to lessen the blow to your family and their finances.
Here are five ways, according to AARP, that you can take action to financially prepare yourself and your family in the event that your parent’s health declines.
Keep Financial Information Organized
It’s crucial to always keep financial information organized. This includes account statements, all account usernames and passwords, and a list of all of the bills that need to be paid regularly.
Ensuring that your parents have all their financial information in order at all times will save your family from having to scramble should there be an unexpected health emergency.
Find Out: 7 Ways Millennials Can Budget Time and Money When Caring for Boomer Parents
Choose a Trusted Advocate
As your parents get older, they should consider choosing a trusted advocate. This is someone who they can trust to assist with their finances, including paying bills, maintaining financial records, keeping an eye on investments and watching out for scams.
Many people choose their spouse, but it’s important to choose a backup individual just in case.
Take Action To Officially Appoint an Advocate
Once an advocate has been determined, it’s important for your parent to take official action to designate the individual as their advocate. Financial institutions won’t just let anyone directly manage accounts or handle financial affairs unless they’re properly informed first.
It’s usually best for someone to set up a financial power of attorney, which allows another person to legally manage their finances on their behalf.
According to GoodTrust, financial powers of attorney can be responsible for many of your financial tasks, including paying bills, running your business, hiring legal representation on your behalf, managing investments and handling your bank accounts.
Understand Future Financial Needs
Your parent’s chosen advocate needs to understand all of their financial needs and expectations. This includes what’s most important to them and how they want their money to be handled.
Be sure that everything is put in writing so their intentions are clear and there’s no confusion about their financial wishes.
Slowly but Surely Shift Financial Management
To make the transition from your parent to their advocate more seamless, encourage them to consider gradually handing off some of their financial management tasks. This can include having them pay a utility bill or being in charge of bank account transfers.
A gradual build-up to assuming full financial responsibility may result in less confusion and prevent the advocate from feeling overwhelmed. And having that advocate prepared and in place should the time come will help you navigate your parent’s declining health issues more easily.
Making sure that your parents have prepared their finances for any sort of health decline is important in order to shield them and your family from financial issues. If you haven’t already, it’s never too late to take action. Being proactive can save you and your family a huge headache later on.
More From GOBankingRates
- 3 Things You Must Do When Your Savings Reach $50,000
- 5 Things You Should Stop Wasting Money on if Kamala Harris Wins in November, According to Experts
- 3 Things to Do This Week If You Have Debt
- 9 Cars To Stay Away From In Retirement
This article originally appeared on GOBankingRates.com: 5 Ways To Protect Your Family’s Finances If a Parent’s Health Declines
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
