The day may come when your parents will no longer be able to handle their financial responsibilities and it may be difficult for them to ask for help, even if they need it. But with a sensitive approach, you can work with your parents gradually and make the process as comfortable as possible.

Here are some tips to take over management of your parent's finances.

First of all, try to start the conversation as early as possible. It may take some time before your parents need your help, but start talking about it now. For example, you could talk to your parents about who will take care of their business if something goes wrong. The National Institute on Aging recommends that parents give written consent in advance to a designated family member so that person can handle a parent's personal affairs with key professionals, such as doctors, financial advisors, and health officials.

Without this kind of planning, privacy laws could prevent important conversations.
Engaging in an ongoing dialogue now will make it easier for you to understand their financial landscape and give you a better understanding of what your level of engagement might be over time.

Then, if possible, make changes gradually. Instead of dealing with your parents' finances, build up your support little by little as and when it's needed. For example, if you've taken it upon yourself to write checks, start doing it together. This kind of gradual and sensible approach gives them (and you) some time to get used to the new arrangements.

Also, be sure to make an inventory of financial and legal documents. Make a list of your parents' contacts, account numbers, and where they store legal documents such as birth certificates, insurance policies, deeds, and wills. Double check that everything is still valid and up to date, and that all accounts are OK. Whether you're filling out this information or making note of where your parents have kept it, make sure all sensitive information is in a safe place.

Also, be sure to reorganize invoices and take on financial tasks. Once everything is set up, take a closer look at any income your parents might have, such as retirement or savings, and switch those income streams to direct deposit if possible. This will ensure that your parents' money is still flowing into their accounts even if an issue arises where they are unable (or forget) to make a deposit. If paying bills is stressful for them, you might consider setting up online bill payment so things get paid automatically every month.

Another important tip is to consider a power of attorney. A power of attorney is a document, signed by a competent adult, that gives another person the power to make decisions on their behalf. There are several types of power of attorney, covering financial, medical, or general decisions, and they can be designed to be temporary, limited to narrow circumstances, or more comprehensive.

Running a power of attorney with your parent ensures that you have the legal authority to make important decisions when he or she won't be able to. Contact a probate attorney for help drafting a power of attorney that meets your needs.

Also, be sure to communicate and document your moves. Keep your loved ones informed of what's going on, especially siblings and your parents. Relatives can be supportive in the whole process and an open line of communication, which could be useful to reduce possible misunderstandings. Managing your aging parents' finances can be a lot of work, but you don't necessarily have to do it all on your own.

Another essential tip is to keep your finances separate. It's not a good idea to mix your finances with your parents', even if it seems like a convenient solution. Using your money to help your parents can be risky and you should always keep your personal assets and funds separate. It's important that you don't jeopardize your retirement or savings goals while helping your parents.

Be sure to also recognize important signs. If you've talked to your parents beforehand, you probably have a plan in place to help them when they need it. But knowing when it's appropriate, or necessary, for you to step in can be a challenge.