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6 ways to help look after you parent's finances

Jun 17, 2009

  1. Maintain their independence - Invariably there comes a point in time when "senior moments" become more regular and your parents will need your help but don't take control of their finances until the time that you really have to. The key is to let your parents know that you are not being pushy but you just want to ensure that they are financially ok.
  2. Will - A will is something that everyone should have, regardless of age. The best way to avoid an edgy discussion is to say that you don't want to know what's in the will, so long as they have one, that it has been recently updated and be aware of where it is located. If there isn't one then suggest that they see a lawyer and get it prepared. As they say "where there is a will there is a way".
  3. Regular reviews - When your parents are of retirement age or older, it is a good idea to have a regular update of their financial situation. You may want to coincide it with a key date such as a birthday or Christmas. All you need to know are the basics such as where they keep their financial documents; a list of their assets (including account numbers); and the names and contact details of their key advisers.
  4. Enduring power of attorney - Having a power attorney is a bit like an insurance policy. You don't need to worry about until you really need it and by then it is usually too late. For peace of mind, suggest to your parents that they should nominate someone close that they trust to take control of their finances should they become incapacitated.
  5. Tax planning - The taxman invariably becomes one of the main beneficiaries when someone dies purely because of poor tax planning. Capital gains tax is a significant "sleeper" whilst a testamentary trust established on death could save thousands in tax for minor beneficiaries. By seeking quality tax advice now you can avoid quite a few hassles in the future and it may be as simple as disposing or transferring a few assets now rather than later.
  6. Government entitlements - Regularly check that your parents receive the maximum government benefits that they are entitled to such as pensions, allowances and rent assistance.

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