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Preparing your Finances for a Transition to Senior Living

Preparing your Finances for a Transition to Senior Living

July 15, 2021
The time may come when moving your loved one to a community that can best meet the physical and medical needs of a loved one is in their best interests. When their strength, physical or cognitive abilities are deteriorating, getting financial items organized can be a challenge. Having a plan to get things organized can be invaluable.
Follow this checklist to ensure you're not missing anything:
1. Gather all statements and legal documents together in one place
2. Sort them into three piles: assets, liabilities, and legal
3. Assets are anything that is owned: home, investments, insurance policies, etc. Liabilities refer to anything that is owed: mortgage, loans, credit cards, medical bills, etc. Legal documents if drafted, are powers of attorneys, trust, will, deeds, or other documents prepared by an attorney
4. It is likely beneficial to an attorney to draft updated documents if your loved one still has the capacity to sign. Some organizations will not rely on "stale" documents drafted more than 4-5 years ago.
5. Scour recent bank statements for all sources of current income (Social Security, pension, investments, or annuities).
6. Review statements for ongoing monthly expenses (insurance, mortgage, utilities, or credit cards).
7. If the home is owned and potentially will be sold, reach out to a Realtor® to get a comparative market analysis (CMA) to determine the approximate value of the home. If ready to sell, sign a listing agreement. Discuss with the Realtor® what modifications might significantly improve the potential sales price and consider if improvements may be beneficial.
8. Based on current income and expenses, build a preliminary monthly budget. Compare current expenses to proposed expenses after a contemplated move to a new community. If the new living expenses exceed the current income sources, determine what the funding gap is.
9. Schedule an appointment with a CERTIFIED FINANCIAL PLANNERTM to review options that may increase potential income from investments. Determine a proper strategy to optimize the proceeds of a real estate sale.
Helping a loved one move onto the next chapter of their life is not an experience that most adult children have navigated. Working with a team that has experience with prior similar transitions is a great way to make sure all your ducks are in a row.