Untangling the Financial Lives of Others

May 10, 2016


A recent Wall Street Journal article by William Power outlined the stressful period in the writer's life when he had to unravel the financial lives of his wife's aging parents. 


Those of us who are middle age or younger often forget (or never knew) the painstaking manner of handling financial affairs without the internet.  We have become accustomed to online banking and brokerage, electronic storage of documents, and speedy access to the data we need.


But older people often have never used the internet, or a computer, and have voluminous physical records of their financial life.


At this time of year, a lot of people have just finished organizing their yearly paperwork from tax preparation.  So now is a good time to consider organizing your affairs to make it easier for someone else to manage, or at least have a roadmap to your own financial life.


Here are some highlights and a few of the lessons learned by Mr. Power in taking over Mrs. Power's parents' financial affairs:


  • Have a Power of Attorney.  This form is most useful when having to handle the financial affairs of another individual while they are alive. Consider a Durable Power of Attorney that will work if the grantor is incapacitated.  You'll need this form for every financial institution, and it seems like older folks like to have a lot of different bank and brokerage accounts.

  • Get Organized.  Make a list of financial assets with account numbers and balances.  Keep that list current, so someone else isn't sent on a wild goose chase for accounts that have been closed.

  • Get a team.  Make sure mom and dad have a CPA, attorney, financial advisor, and maybe even a social worker or geriatric consultant in place.

  • Keep your physical files clean.  Throw away old records that will never be needed.  Who wants to go through receipts from the hardware store from the 1960s?

  • Expect the unexpected.  The WSJ writer found an old AOL online account charging $37 per month for internet access the parents never used.  They could no longer drive, but kept paying for a Costco membership!

  • Don't wait for a crisis.  Elderly parents can often end up getting ill quickly.  The stress of illness at the same time a family member has to take over the finances can be overwhelming.



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