Financial Documents to Retain for Aging Parents

Posted on May 16, 2023 by shieldsandboris

Dealing with an aging parent is challenging. It is crucial that they have the right structure in place to protect themselves. Estate plans should be the foundation. Alarmingly, the AARP reports that nearly two-thirds of U.S. adults—including one-quarter of senior citizens—do not even have a valid will in place. Of course, an aging parent may not be able to handle their own finances later in life. To best protect your parents, you need to gather and organize a wide range of financial documents.

At The Elder Law Offices of Shields & Boris, we have nearly seven decades of collective experience helping people and families navigate some of the most challenging elder law and estate planning questions. Our team wants to make sure that you have the structure in place that you need to protect the best interests of aging loved ones. Here, our Pennsylvania elder law attorneys provide a detailed overview of the financial documents that you need to retain to support an aging parent.

Key Documents for Aging Parents: A Financial Checklist That You Can Use

Bank Account Information

When gathering financial documents and records for an aging parent in Pennsylvania, it is always a good idea to start with bank account information. Indeed, complete and accurate bank account information is a foundational part of comprehensive financial planning for an aging parent. Among other things, you may want to ensure that you have access to: Account names; Account numbers; Bank contact information; and Online access credentials.

With the full information, you will be in the best position to monitor account activity and assist with bill payments. It is a best practice to consider retaining statements for the past 12-24 months, as they may be necessary for tax purposes or to verify income and expenses.

Retirement Plan Records (IRA, 401(k), Pension, etc.)

Retirement plan records are also key financial documents for aging parents. Along with other things, these documents may include Individual Retirement Accounts (IRAs), 401(k)s, pension plans, and other retirement savings vehicles. Ensure you have a clear understanding of the account balances, distribution schedules, and any required minimum distributions. Keep statements for at least the past five years, as well as a record of beneficiaries and contact information for plan administrators. You may want to regularly review these documents with your parents.

Debt and Loan Documentation

Debt may or may not be an issue for your aging parent. Some senior citizens are largely debt-free, whereas others may still have ongoing financial obligations. If there are any outstanding debts, it is imperative that you have a full understanding of what is owed, who it is owed to, and what needs to be done to ensure that payments continue. Retaining these records allows you to help your parents manage their debt, make informed decisions, and ensure timely payments. Keep statements for the past 12-24 months, as well as loan agreements and payment schedules.

Tax Returns

Maintaining accurate tax return records is vital for your aging parents. Retain copies of their federal and state income tax returns, including all supporting documents and schedules, for at least seven years. These records provide a comprehensive overview of your parents' financial situation, help verify income sources, and may be required for future tax filings or audits. Beyond that, these documents can be useful for determining eligibility for government assistance programs or for aiding you in the event of a financial dispute with a third party.

Real Property Deeds

Do your parents own any type of real property? Whether it is a primary home, a rental unit, or any other type of property, it is imperative that you have comprehensive financial information. Real property deeds are essential documents that prove ownership of any land, homes, or other real estate owned by your parents. Keep the original deeds, as well as any associated documentation, such as property surveys or title insurance policies. These records provide essential information about the property, including legal descriptions, boundary lines, and any encumbrances, such as liens or easements.

Any Active Business Records

Some senior citizens in Western Pennsylvania have active or recent business interests. If this applies to your aging parent, it is crucial that you have a full understanding of the situation, including access to all relevant financial documents and records. Retain copies of all important documentation, such as articles of incorporation, partnership agreements, financial statements, and tax filings. Additionally, keep a record of any business-related licenses, permits, or registrations. These documents are vital for managing the business, making informed decisions, and ensuring compliance with applicable laws and regulations.

Financial Power of Attorney (POA)

Finally, you may want to obtain a financial power of attorney (POA) for your aging parent. The reality is that your parent may no longer be in a position to effectively manage his or her financial situation—at least not without some assistance. A financial power of attorney (POA) is a legal document that grants a designated individual the authority to make financial decisions on behalf of your aging parents.

In Pennsylvania, financial POA can be set up in a number of different ways. For example, your aging parent could provide you, your sibling, or another trusted party with POA right now—thereby allowing you to help manage their finances. Alternatively, your parent could set up a springing financial power of attorney that only takes effect in the event that he or she becomes legally incapacitated. Regardless, financial POA is a key estate planning tool.

Consult With Our Pennsylvania Elder Law Attorneys Today

At The Elder Law Offices of Shields & Boris, we provide a comprehensive range of solutions-driven estate planning and asset protection services. If you have any questions about the financial documents that you need to support an aging parent, our legal team can help. Call us at (724) 307-4464 or contact us online today to set up your confidential case review. With offices in North Hills, South Hills, and Beaver, we provide elder law services throughout Western Pennsylvania.

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