Elder Law FAX The January 1, 2007, issue of Elder Law FAX, a free newsletter published every other Monday by the Elder Law Practice of Timothy L. Takacs. Managing Parents' Finances: Eight Steps for Children to Take As their parents age and become increasingly dependent upon others for help, often one of the first tasks that children find themselves having to undertake is to manage their parents' finances.   The Web site Bankrate.com recently published a step-by-step guide for the children of incapacitated parents.   Here are the eight steps.   Step 1: Find all of your parents' financial accounts and documents. This can be a daunting challenge. Many people don't maintain a comprehensive, updated list of their investments. Financial records may be in a mess. Here is a tip: keep an eye on the mailbox during the month of January, when IRS Form 1099s are mailed. Look for a recent income tax return for clues.   Step 2: Collect and start paying bills. What bills need to be paid? Review bank account statements over the past year for routine transactions. Watch for insurance payments that may be due on other than a monthly basis (such as homeowners and automobile).   Step 3: Locate power of attorney or living trust documents. You may need these documents in order to have legal authority to act on behalf of your parent. Although storing these documents in a bank safe deposit box is usually not recommended, if the documents cannot be found at home this location may be a good place to start.   Step 4: Open their safe-deposit boxes -- with a witness. To avoid disputes with other family members, get a witness when you inventory the box.   Step 5: If there is no durable power of attorney or living trust, you may have to become your ill parent's guardian or conservator. But don't assume that this step is automatically necessary. Going to court to be appointed guardian or conservator of an incapacitated parent is costly and intrusive. What many lawyers who recommend this step don't tell you is that as guardian of your parent, you must now legally account to the court for whatever steps you take to manage your parent's finance and arrange for their health care needs. Do you really want or need to have a judge tell you how to take care of your parents?   Step 6: Document everything you do on your parents' behalf. Approach managing your parents' finances as a business.   Step 7: Consider hiring a financial planning team.   Step 8: Consider updating your parents' investments.   For more information, visit:   http://www.bankrate.com/brm/itax/news/20061124_8step_plan_parents_finances_a1.asp