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Adam Vega, CFP® profile image Adam Vega, CFP®

Checklist For Elderly Parents’ Finances: A Comprehensive Guide

This comprehensive guide offers a detailed checklist for managing elderly parents' finances, covering key topics such as initiating conversations, gathering essential documents, accessing financial accounts, understanding care costs, and identifying payment options.

Checklist For Elderly Parents’ Finances: A Comprehensive Guide
A father and son discussing finances.

Edited by: Adam Vega, CFP®

Updated October 22, 2023

As our parents age, managing their finances becomes an increasingly important responsibility. In order to provide the best possible support, adult children must have a clear understanding of their parents' financial situation and the costs associated with long-term care. This comprehensive guide offers a detailed checklist for managing elderly parents' finances, covering key topics such as initiating conversations, gathering essential documents, accessing financial accounts, understanding care costs, and identifying payment options. By following these steps, you can help ensure your parents' financial well-being while also addressing their individual care needs.

Start with a Conversation

A woman having a conversation with her mother about finances.

The first step in managing your elderly parents' finances is to initiate an open and honest conversation about their financial situation (Bank of America). Discussing finances can be a sensitive topic, so approach the conversation with empathy and respect. Encourage your parents to share their financial goals, concerns, and any existing plans they may have in place. It is essential to establish trust and maintain open lines of communication throughout the process.

To help facilitate the conversation, consider asking specific questions about their assets, debts, and any financial plans or strategies they have in place. This could include questions about their retirement savings, insurance policies, or any other investments they may have. Additionally, it's important to inquire about their preferences for long-term care and their thoughts on how to fund it.

Recognize that the conversation may be difficult for your parents, as discussing finances may make them feel vulnerable or anxious. Be patient and understanding, and remember that the goal of the conversation is to provide support and guidance, not to criticize or judge. Keep in mind that this may be an ongoing conversation, and that your parents' financial situation may change over time.

Complete or Locate the Necessary Financial and Legal Documents

To effectively manage your parents' finances, you'll need to have access to essential financial and legal documents (AARP). This may include bank statements, investment accounts, retirement accounts, insurance policies, mortgage documents, property deeds, and tax returns. Additionally, ensure that essential legal documents, such as wills, trusts, and powers of attorney, are up to date and easily accessible.

A woman reviewing documents.

If your parents have not already done so, encourage them to create a comprehensive list of their assets and liabilities, along with any relevant account numbers, contact information, and other pertinent details. Login information to any important websites and email accounts that store information is also helpful to have access to. This will not only help you manage their finances more effectively, but it will also make it easier for them to stay organized and maintain control over their financial affairs.

Once you have located and organized all necessary financial and legal documents, consider creating a secure digital archive to store copies of these documents. This can help ensure that you always have access to important information, even if the original documents are lost or damaged.

What Legal Documents Must Be Completed?

You may be wondering what the term “legal documents” entails. As legal matters are often complex and stressful for caregivers, we have compiled a small list of what legal documents you will need to complete as part of our checklist for elderly parents’ finances. Several legal documents are essential for caregivers to complete on behalf of their loved ones, including:

Will: A will outlines how an individual's assets will be distributed upon their death and names a personal representative to administer the estate, this is important so that they have their affairs in order prior to a possible long term care crisis or event. Make sure to fill this out sooner than later so that your elderly parent gets a say in how they would like to disperse their assets. (Alzheimer’s Association).

An abstract document containing text and graphs surrounded by pens and pencils.

Trust: A trust is a legal arrangement that allows a person (the grantor) to transfer assets to a trustee, who then manages these assets for the benefit of designated beneficiaries. Trusts can help protect assets, reduce estate taxes, and provide for the grantor's care if they become incapacitated. It is important to help your elderly parent fill this out so that they are confident in who they name as their “grantor”.

Durable Power of Attorney: This document grants a designated person (the agent) the authority to make financial and legal decisions on behalf of the individual (the principal) in the event of incapacity. This will be important, as your elderly parent will begin to lose some function as they age further.

Advance Healthcare Directive: An advance healthcare directive, also known as a living will or medical power of attorney, outlines an individual's healthcare preferences and designates a person to make medical decisions on their behalf if they become unable to do so themselves. Again, this document provides your elderly parent with someone to fall back on when they themselves are unable to make decisions for themselves.

Gain Access to Your Elderly Parents’ Financial Accounts

In order to manage your parents' finances effectively, you will need to have access to their financial accounts (Daily Caring). This may involve setting up online access, obtaining account numbers and passwords, or being added as a joint account holder or authorized user. It is essential to maintain transparency and involve your parents in any financial decisions, ensuring that their wishes are respected and taken into account.

An abstract depiction of a bank.

In order to gain access to their accounts, you will need to sit down and have another tough conversation with your parents. If your elderly parents are reluctant to share this information, do your best to comfort them and ensure them that you will only need to act with their money in the case that they are unable to themselves, and that it would be in their best interest if someone else was able to provide financial support or help guide them as they age.

When gaining access to your parents' financial accounts, it's important to familiarize yourself with their banking and investment institutions, as well as any account features or benefits they may have. If your parents have someone specific they are in contact with such as a local bank representative, it is often helpful to have a list of contacts your parents communicate with regarding their accounts in the event you need to contact them. This will help you better understand their financial situation and make informed decisions on their behalf. Additionally, be prepared to monitor their accounts regularly for any unusual activity or potential signs of fraud, as elderly individuals are often targets for financial scams.

As you gain access to your parents' financial accounts, take the time to review and evaluate their current financial strategies and investments. Determine whether their current plans are aligned with their long-term goals and make any necessary adjustments to ensure they are on track for a secure financial future.

Understand Costs of Care

Three abstract jars containing coins.

As your parents age, it is crucial to understand the costs associated with long-term care (MoneyGeek). Research the costs of various care options, such as in-home care, assisted living, or nursing home care, and consider the potential for future medical expenses or changes in care needs. Keep in mind that costs may vary depending on factors such as location, level of care required, and the specific care provider. By understanding the costs of care, you can better prepare for your parents' financial needs and create a plan that addresses their unique situation.

In addition to researching the costs of care, consider exploring available government programs and benefits that may help offset some of the expenses associated with long-term care. Programs such as Medicare, Medicaid, and Veterans Affairs benefits can provide financial assistance for eligible individuals, helping to reduce the burden on family caregivers.

An abstract depiction of health insurance programs including a wheelchair and other items.

It's also important to consider the potential impact of long-term care costs on your parents' overall financial situation. If their current assets and income are insufficient to cover the costs of care, you may need to explore alternative funding options or consider making adjustments to their financial plan to ensure they have adequate resources to meet their care needs.

Understand Your Elderly Parents’ Individual Care Needs

In addition to understanding the costs of care, it is essential to consider your parents' individual care needs (Daily Caring). Assess their current health status and any ongoing medical conditions, and consult with their healthcare providers to gain insight into their specific needs and any potential future requirements. By understanding your parents' care needs, you can create a tailored care plan that addresses their unique situation and ensures their well-being and comfort.

When evaluating your parents' care needs, take into account their personal preferences and values, as well as their social and emotional well-being. Consider factors such as their level of independence, mobility, and cognitive abilities, as well as their support network and any cultural or religious considerations. This will help you develop a comprehensive care plan that addresses not only their physical health but also their overall quality of life.

Keep in mind that your parents' care needs may change over time, and it's important to regularly reassess their situation and make any necessary adjustments to their care plan. This may involve coordinating with healthcare providers, exploring new care options, or making changes to their financial plan to accommodate evolving care needs.

An abstract image of various tools.

Identify Methods of Paying for Care

Once you have a clear understanding of your parents' financial situation and care needs, explore the various methods of paying for their care (smartasset). Some options may include personal savings, investments, pensions, Social Security benefits, or government assistance programs. By identifying potential sources of funding, you can develop a comprehensive financial plan to help cover the costs of care.

As you explore payment options, consider discussing the possibility of long-term care insurance with your parents. Long-term care insurance policies can help cover the costs of various care services, including in-home care, assisted living, and nursing home care. However,it's important to weigh the costs and benefits of such policies, as premiums can be expensive and may not be the best option for everyone. Additionally, keep in mind that purchasing a long-term care insurance policy may be more difficult or costly for individuals with pre-existing health conditions or those who are already in need of care.

A jar being filled with coins.

Another option to consider when planning for the costs of care is a reverse mortgage. This financial product allows homeowners to convert a portion of their home equity into cash, which can then be used to pay for care expenses (Moneygeek). However, reverse mortgages come with certain risks and drawbacks, and it's crucial to carefully evaluate the pros and cons before deciding if this option is right for your parents' situation.

Long Term Care Payment Options

If your parents' existing financial resources are insufficient to cover the costs of long-term care, there are several alternative payment options to consider. One option is to explore government assistance programs, such as Medicaid, which provides financial assistance for long-term care services to eligible individuals with limited income and assets (AARP). It's important to research the eligibility requirements and application process for Medicaid, as the rules can vary by state and individual circumstances.

Another long-term care payment option is a life insurance policy with a long-term care rider. This type of policy allows policyholders to access a portion of their death benefit to pay for long-term care expenses, effectively converting their life insurance policy into a source of funding for care (Smartasset). However, it's important to understand the terms and conditions of the policy and any potential tax implications before pursuing this option.

A vibrant and colorful image of a house.

If your parents have substantial equity in their home, they may also consider selling their property or downsizing to a smaller, more manageable residence. The proceeds from the sale can be used to help cover the costs of long-term care, while also potentially reducing their ongoing living expenses and maintenance responsibilities (Moneygeek). However, selling a family home can be an emotional decision, and it's essential to discuss this option openly and honestly with your parents before making any decisions.


An abstract image of various shapes.

In conclusion, managing your elderly parents' finances and planning for their long-term care needs can be a complex and challenging process. By following the steps outlined in this guide, you can help ensure your parents' financial well-being and provide them with the care and support they need as they age. Remember to maintain open communication, involve your parents in the decision-making process, and seek professional guidance when necessary to navigate the various financial and legal considerations involved in caring for elderly parents.

Adam Vega, CFP® profile image Adam Vega, CFP®
Adam Vega is the President of Avance Private Wealth Management. He has worked in the financial planning space for over thirteen years, offering planning and wealth management services to his clients.