As people live longer, caring for elderly parents is becoming an even bigger commitment for grown kids. There are the fun aspects, such as visiting your parents, as well as the major responsibilities, such as ensuring they’re financially secure and their affairs are in order.

Today’s elderly haven’t had the benefit of long-term compulsory super and many are struggling to get by on the pension. Others just need help managing their money. It’s absolutely crucial to find out about your parents’ financial situation to avoid any dramas in the future – things could easily go from bad to worse if no preparations have been made.

Step 1: Open discussion
The best way is to sit down with your parents and explain that you have a few questions about their finances. Make it clear you’re not being nosy, you just want to ensure everything is in order and they’re confident about looking after their money unassisted.

No-one wants to feel they’re being put out to pasture, so be tactful. Try to personalise the conversation. Explain how you’ve been getting the right documents in order to make sure your family is OK if something happens to you. Most people know someone whose financially savvy spouse died and the surviving partner had no idea of their situation. Tell them you want to make sure this won’t happen to them.

Emphasise to your parents that your inquiries are not being made by a gold-digging child, but by a family concerned about caring for their parents in the best possible way if disaster strikes.

Step 2: Get organised
If your parents are elderly and starting to forget information or lose track of things, ask to meet their bank manager. Make sure your parents organise this and make the introductions. During the meeting, you should ask to sign an authorisation allowing the banker to talk to you about their accounts. This means the bank will be happy to keep you up-to-date and provide you with some warning in case there are any problems or irregularities.

Some parents may not want to share financial details because they are scared of giving up their independence. However, if they suffer a stroke or reach the later stages of Alzheimer’s disease, they may not be able to give you the authority you need.

While you’re looking into your parents’ finances, check they’re receiving the maximum government benefits they qualify for. Are they getting the pension? Are they eligible for allowances for things like utilities? Are they entitled to rent assistance?

Step 3: Power of attorney
It’s a good idea for anyone of retirement age or older to appoint a power of attorney. It can be limited to one piece of real estate or cover all financial transactions. Encourage your parents to nominate a loved one, friend or solicitor to take control of their finances if they go away for an extended period or suddenly become incapacitated.

Explain to your parents that it’s better to be safe than sorry, and how power of attorney can make things so much easier just in case they are unable to look after their finances themselves. It’s not a nice thought, but it’s vital these things are considered.

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Will? There's a way
Some of the crucial things you need to find out are whether your parents have an official will and, if so, where it’s located. Emphasise that you don’t care what’s in it, you just want to check that they have one. Surely they would much rather decide what happens to their estate than an outsider! If they haven’t done a will, put them in touch with a lawyer or get a do-it-yourself will kit.

WHAT YOU NEED TO KNOW
Many families are uncomfortable discussing financial matters, but it has to be done. Here's what you need to know about your parents:

• If they have legal documents and, if so, where they are located.
• Where their bank accounts are held as well as who they rely on for financial advice.
• What other investments they have and whether these assets are held jointly or separately.