For example, your duties may be targeted, like signing your parent's checks on their bank account. Or you could set it up so that you receive power of attorney in the somewhat distant future and only if a doctor checks agrees it's time for you to make the financial decisions.
Your parents may be mentally sharp – and still need assistance. Jim Christy, 29, an executive at an attorney marketing company in Columbus, Ohio, is managing his father's money. His dad is only 58.
But his father is unemployed and semi-retired after a lifetime of working in construction, mostly in carpentry and roofing. "His body has broken down to the point that he could no longer go back to work in his trade, and had few other skills that made him valuable in the job market," Christy says.
His father's health and unemployment problems led to him becoming unbanked, and now he is unable to get his own personal checking account. "Long story, but there was some financial mismanagement," Christy says. "So as you could imagine, even something as simple as getting checks cashed was difficult. Our strategy was to add him as a limited account user to my checking account."
So Christy's father can only deposit money into his son's account. Christy set it up so that his father's bills are automatically paid, and the leftover money goes onto a reloadable debit card that his dad uses for day-to-day expenses.
"We've recently started using the Bluebird Card by American Express and have found that to be really helpful," Christy says. "I can monitor his expenses, quickly add money when necessary and even move the money back into the bank account in case he loses the card."
Keep your parents involved in the budgeting for as long as possible. It may be easier and faster for you to handle everything, but it will likely help your relative's morale if he or she still has a hand in making some decisions, provided you can do it in a way that promotes bonding time and alleviates stress.
That last part is very important. "Keep them involved – but remove the burden," Meyer says.