Resources for assisting an aging parent
March 26, 2014
As your parents age, there may come a time when it makes sense for you to get more involved in their financial activities. Here's a list of documents you may need, along with a rundown of Vanguard tools and resources that can help simplify the process.
Documents you'll need along the way
- Will. Allows persons to choose who will receive their property and to name trusted persons who can act on that person's behalf after death. Not all property passes under the will so your parent may have other important documents. Without a will, the estate's assets may not end up where your parents intended.
- Beneficiary designation. Some property, like IRAs, employer-sponsored retirement plans, insurance and annuity contracts, and accounts under transfer on death plans, pass to the beneficiaries named on a beneficiary designation (or to the default beneficiaries in the particular contract if no beneficiaries are named) and aren't listed under a will. Your parents should retain a copy of the beneficiary designation for each such account or plan they own.
- Trust account documents (if applicable). Some people create trusts as their primary estate planning document. Trusts may help people manage their property both during their lifetime and after death. If your parents have a trust, they may also have a will as a back-up.
- Power of attorney. A written document authorizing someone, called an agent or attorney-in-fact, to represent or act on another's behalf in private affairs, business, or some other legal matter. Most people need both a power of attorney over financial matters and a power of attorney for health care decisions. Powers of attorney are only valid during the lifetime of the person who granted the power of attorney.
Vanguard resources to help
- Bank Transfer Service Form. Completing this form allows either the account holders (your parents) or the person they authorize (perhaps you) to electronically transfer funds between accounts and a designated bank account. This will come in handy if your parent is in an assisted living facility, needs to take a required minimum distribution (RMD), or needs to expedite the transfer of funds for living expenses. A notary's signature is required.
- Agent Authorization. This legal document allows a client to authorize an individual to perform transactions and obtain information on a Vanguard account. You can select from two agent authorization options. A limited agent can move money between accounts (including a listed bank account in the client's name), check account balances, and view account history. A full agent has all the limited agent's abilities and can also change a client's address, change beneficiaries and registrations, and write checks on a money market account. A notary's signature is required.
- Agent Certification for Incapacitated Person. If your parent has his or her own power of attorney and is no longer able to act due to incapacity, the agent named in the power of attorney can submit this document, along with the power of attorney and a doctor's note dated within the last 30 days to obtain access to many of your parent's Vanguard accounts.
- Voice verification. This service, which allows you to verify your identity by speaking a specified phrase into the phone, can simplify the transaction process. You can establish voice verification once you've completed the agent authorization process.
- Estate planning FAQs. Getting your parents' estate in order while they're still healthy can offer peace of mind if they later need assistance with their finances. The link above takes you to answers to some of the commonly asked questions our estate planning experts receive. Likewise, clarifying beneficiary designations early can help simplify the estate settlement process later. This beneficiary designation kit for IRAs can help.
- Mutual fund recommendation tool. As your parents age, their investing time horizons get shorter and their goals may change. A more conservative investment strategy, along with the need to generate income from investments, may be necessary. This tool can help make sure your parents' portfolio stays aligned with their financial goals and needs. A similar tool for exchange-traded fund (ETF) recommendations is also available.
- All investing is subject to risk, including the possible loss of the money you invest.