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Important Legal Documents for Seniors: A Financial Checklist for Aging Parents

Finances | January 24, 2023

An elderly woman researching and reviewing legal documents for seniors

Your parent’s needs can change quickly as they get older, which makes it important to keep track of important financial documents. The problem is that as a person ages, the number of financial documents they accrue can become overwhelming – especially if your parent accidentally misplaces the documents they need the most.

The good news is that a little organization can help you get your loved one’s financial affairs in a much better place. This list of important documents for seniors will hopefully make you feel less overwhelmed. You’ll be aware of the financial documents your loved one needs to always have and what to do if they’ve misplaced this information.

What Legal Documents Do I Need for My Elderly Parent’s Finances?

Your loved one must demonstrate their financial need and have comprehensive documents of past and current finances to apply for benefits. Documents such as bank account information and tax returns are necessary to ensure your loved one is eligible for Medicaid and veteran benefits.

Here’s a checklist of all the types of financial documents your loved one should have readily available.

  • Bank accounts
  • Tax returns
  • Retirement plans, pension documents, and annuity contracts
  • Savings bonds, stock certificates, or brokerage accounts
  • Business partnership and corporate operating agreements
  • Property deeds
  • Debt and loan documentation
  • Vehicle titles
  • A financial power of attorney

Bank accounts

Over time, your parents will likely open and close several bank accounts. It’s important to know all the places your parents keep their money in case you or another loved one needs to help them with their finances. There are four main types of bank accounts that you should try and identify, including:

  • Checking accounts
  • Savings accounts
  • Money market accounts (MMAs)
  • Certificate of deposit accounts (CDs)

Once you identified the different accounts and banks your parent has, it’s also good to make it easier for them to access their accounts if they’re still capable of handling their own money. Consider showing your loved one how to use mobile banking to keep track of their accounts. You can also encourage them to call their bank directly for any information they need.

Tax returns

The IRS states that in most cases, individuals should keep their tax returns for at least three years if all income was reported and there were no fraud reports. This time frame changes to seven years if you file a claim for a loss from worthless securities or bad debt deduction. The amount of time changes to six years if you do not report the income that you should report, which is more than 25% of the gross income shown on your return.

When it comes to which documents seniors should keep, your loved ones should have a copy of their tax return along with any supporting documents used when filing those taxes. These documents can include:

  • 1040, 1040 EZ, or 1040 A (individual tax forms)
  • W-2 (a tax form from an employer listing your loved one’s income and the taxes withheld from their paycheck)
  • 1099-MISC (miscellaneous income form if your loved one made $600 a year or more in freelance or other contract work)
  • 1098 (mortgage interest statement)
  • W-4 (a form used to calculate income tax withholdings from a salary)
  • Any supporting documents for charitable donations or other proof of expenses

For your parent to file taxes, they will need to have their:

  • Social security or TAX ID number
  • Date of birth or date of birth of their spouse (if filing jointly)
  • Bank account routing number for direct deposit
  • Any employment or mortgage rate forms applicable to them

Your loved one can retrieve missing tax information by visiting irs.gov to receive their tax transcripts by phone, online, or mail.

Retirement plans, pension documents, and annuity contracts 

A retirement plan is a financial strategy of saving, investing, and distributing money that your loved one can use to sustain themselves throughout their retirement. Your aging parent might have a 401(k) or some other form of retirement account that involves them putting away a percentage of their paycheck directly into this investment fund.

The simplest way to retrieve unclaimed benefits is through a free, searchable database called the National Registry of Unclaimed Retirement Benefits.

A pension refers to a set monthly income that some employers, such as federal and state entities, give their employees after a particular time served on a job. If your loved one has lost a pension rather than a 401(k), you can direct your loved one to the U.S. Department of Labor’s Employee Benefits Security Administration or Form 5500 Search.

Annuity contracts refer to customizable contracts issued by an insurance company that converts an investor’s premiums into a guaranteed fixed income stream. Annuities take between five to ten years to grow, meaning that it’s easy for a loved one to misplace an annuity because so much time has elapsed.

Contact the firm directly by phone or letter to retrieve a lost annuity. Give them your loved one’s name, date of birth, and social security number, and they can provide copies of the contract. Also, the National Association of Insurance Commissioners (NAIC) offers national support for state insurance regulators.

Savings bonds, stock certifications, or brokerage accounts 

Your parent might have also been investing in the stock market to accrue wealth or fund their retirement. To locate a savings bond, you can direct your loved one to an online tool called the Treasury Hunt Tool which can help you determine if they have any lost bonds before submitting a recovery claim. Your parent can also visit the Treasury Direct website and fill out Form 1048, ensuring that they provide a certified signature in the presence of a notary or authorized certifying officer.

Additionally, your loved one might hold stock or have shares in a particular company. A stock certificate is a legal document representing a shareholder’s company ownership. It outlines how many shares they own, the date of purchase, the identification number, a corporate seal, and signatures. For stock certifications, your loved one can contact the stock transfer agent to retrieve their lost certificate.

Business partnership and corporate operating agreements

A business partnership and corporate operating agreements are applicable if your loved one is a business owner. These are legal documents between two or more parties that outline:

  • The business’ legal structure and purpose
  • Individual partners’ responsibilities
  • Partnership property
  • Each party’s ownership interest
  • How to make business decisions

Your loved one can contact the attorney that legalized the agreement to retrieve a copy.

Property deeds

If your loved one wants to downsize their home or sell some other property that they have, the deeds must be readily accessible. A loved one might also decide that they want to pass down their home to a loved one.

If you or a loved one can’t find the deed, there are a few ways to access it, such as:

  • An online search: insert the name of your loved one’s county or the county of the property’s location into a search engine, followed by the words “deed” or “deed search.” If this search takes you to your local County Recorder website or equivalent, you can search for the deed and download a copy of it once you find it.
  • Contact the county recorder’s office and speak to a customer service representative if you can’t find the deed online.
  • Request the deed by mail by reaching out to your County Recorder’s Office

You should also know that you must pay a fee to obtain copies of deeds. These costs vary by state but typically don’t cost more than $10.

Debt and loan documentation 

Debt documentation includes information for credit card loans, purchase contracts, and rental agreements. Such accounts will require payments if your loved one is in the hospital for a long time or entering rehab, assisted living, or a long-term care facility. Also, a caregiver must notify these accounts to cancel them should the loved one pass away.

You or a loved one can find these debts by:

  • Checking credit reports
  • Going through new and old mail
  • Contacting creditors that you or your loved one knows that they owe
  • Checking new and old voicemails, vetting these voicemails for debt scams, and compiling a list of all the debts

Financial power of attorney 

Designating a financial power of attorney is a significant part of estate planning. A financial power of attorney allows your loved one to designate who they want to make financial, tax, and legal decisions on their behalf. A power of attorney can be durable or not durable, with the first option allowing a person to make decisions even if the senior becomes incapacitated or incapable of doing so on their own.

Policy Genius states that a principal (the person creating the document) can allow their POA to:

  • Spend and use money in your bank accounts
  • Make investment decisions
  • Manage retirement accounts, like 401(k) plans and IRAs
  • Buy and sell real estate
  • Make mortgage payments, credit card payments, or other payments
  • Conduct business transactions
  • File and pay taxes and receive tax refunds
  • Collect government benefits, like Social Security
  • Claim an inheritance
  • Hire legal counsel

To learn more about how these documents work and how to get one, check out our beginner’s guide on power of attorney for caregivers and elderly parents.

Vehicle title 

Having a copy of a lost vehicle title matters if your aging parent decides that they want to sell their car. Also, if they pass down their car to a beneficiary in a will, that person will need the vehicle title for a legal transfer to happen.

If your loved one has lost their vehicle title, they can visit their local Department of Motor Vehicles (DMV) or Secretary of State’s (SOS) website to retrieve a duplicate.

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