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Picking a Financial Caretaker Thumbnail

Picking a Financial Caretaker

At some point in your life, you may need a financial caretaker to pay your bills, watch over your investments and take care of your tax filings. For many people, the choice is easy - most often adult children or nieces and nephews are willing to help. For some people, there may not be anyone who you can easily turn to. What do you do if you are in this situation?

Hire a friend and a professional

If you do not have family you trust to help with your finances, consider hiring a friend you trust. However, to provide additional protection, hire a professional to oversee the person taking care of your finances, such as an accountant or fiduciary financial planner. How would this work?

First simplify your finances and consolidate your financial picture. Set up automatic bill pay for as many payments as possible. Provide your friend and a professional with the login to your aggregator site. The two can work together to make certain you are doing a good job managing your finances.

Once you need assistance with your finances, you can begin with your friend "supervising" your bill paying, watching over your investments, and filing your taxes. Make certain they have a power of attorney to take over for you when needed, and that all of your financial institutions accept your power of attorney document.

Once your friend takes over paying the bills, make certain the financial planner or accountant periodically "audit" your friend's work. You will have to pay for this service, but the peace of mind with having multiple eyes on your financial picture is well worth the cost.

What if there is no one who can help you pay your bills?

There are professional bill payers, but unfortunately, this profession is in its infancy and is not regulated. The American Association of Daily Money Managers is a great resource for professional bill payers, and they may also provide many other services.

If you hire a professional bill payer, they should provide a monthly accounting of your expenditures, collect all your financial statements, organize your information for your tax return, and review your investments with your professional advisers.

It is important to have your finances set up to your specifications in advance of hiring help so your instructions can be followed. For example, have an investment policy statement, budget, and plan for your sources of income and have the bill paying professional agree to follow your directives.