Although it is a duty that most of us would rather not do — because it’s nice to think that our parents will be alive and mentally present forever — many of us will eventually have to manage or assist our parents with their money. There is no way to know the future, and so you should prepare now in case you ever have to help your parents with their money because they cannot manage it themselves anymore. It can be a difficult talk to have, but take the time now to discuss finances with your parents so that you are prepared in the future, or at least ask them who they would want to handle their finances if they were unable to do so. Whether you are planning for the future, or already handling your parents’ money, you can make careful decisions to keep their best interests in mind.
1. Understand your role
Your duties will change depending on whether you have power of attorney, are a trustee, a court-appointed guardian, or have a government fiduciary. Knowing and understanding your role will help you manage the money effectively and within your rights, avoid scams and possible exploitation of your parents’ money, as well as where you can get help. The Consumer Financial Protection Bureau has explanation of each type on their website. You will probably need a lawyer to talk through the different roles with you and your parents, hopefully before you have to take over their finances. The point is for you to handle their money in the way that best benefits them, and the right role will help you and them benefit the most.