Helping an aging parent with money usually starts small (a missed bill, a confusing Medicare letter) and grows fast after a fall or a diagnosis. The most important step is one families often put off: getting the legal papers signed while your parent can still make decisions, especially a durable financial power of attorney and a health care proxy. Then map their income, bills and accounts, and learn what Medicare will and won’t pay for. This checklist puts the steps in order. Your ticks stay in your browser.
Start nowTalk and get the papers in place
- Have the conversation: what your parent wants for care and housing, who should help with money, and where their documents are. Include siblings early to avoid conflict later.
- Durable financial power of attorney, so a trusted person can pay bills and manage accounts if your parent can’t. Many banks ask for their own form too; check with each one.
- Health care power of attorney (proxy) and advance directive, plus a HIPAA authorization so doctors can talk to you.
- A will (and a trust if needed), and up-to-date beneficiaries on retirement accounts and life insurance. An elder law attorney can handle all of these papers together.
Next 30 daysMap the money
- List income and assets: Social Security, pensions, retirement accounts, bank accounts, home value, insurance policies (including any long-term care policy).
- List bills and due dates, and set up autopay for essentials. Consider adding yourself as a trusted contact on their bank and brokerage accounts.
- Social Security and VA benefits: a power of attorney isn’t enough. If your parent needs help managing those benefits, SSA can appoint a representative payee and the VA a fiduciary.
- Review Medicare coverage: Original Medicare plus a supplement, or a Medicare Advantage plan; Part D drug coverage; and whether they qualify for help with costs (Medicare Savings Programs, Extra Help).
- Freeze their credit at Equifax, Experian and TransUnion if they aren’t applying for new credit. It’s free and blocks most new-account fraud.
As needs growPlan for care costs
- Know what Medicare doesn’t pay: long-term custodial care (help with bathing, dressing, eating) at home or in a nursing home isn’t covered. It covers short skilled nursing or rehab stays after a qualifying hospital stay, and some home health care.
- Price care options locally: in-home aides, adult day care, assisted living and nursing homes. The Eldercare Locator (1-800-677-1116) connects you to your local Area Agency on Aging.
- Understand Medicaid for long-term care: it pays for most nursing home care in the U.S. but has strict income and asset limits, and it looks back 60 months at gifts and transfers. Giving money away to qualify can cause a penalty period; talk to an elder law attorney first.
- Protect your own finances: keep saving for your retirement and set limits on what you can pay. Use the retirement calculator to see what helping costs your plan.
- Check your leave rights. The FMLA gives eligible employees up to 12 weeks of unpaid, job-protected leave to care for a parent with a serious health condition; some states and employers offer paid leave.
OngoingWatch for scams and keep records
- Watch for elder fraud: impostor calls, “grandchild in trouble” scams, romance scams and tech-support pop-ups. Check suspicious messages with the Scam Checker. If a parent 60 or older has been scammed, call the National Elder Fraud Hotline at 1-833-FRAUD-11 (1-833-372-8311).
- Keep receipts for everything you pay for your parent’s care and keep their money separate from yours.
- Write a caregiver agreement if a family member is paid for care, so payments are documented (this also matters for Medicaid).
Tax breaks for family caregivers
| Tax break | Who qualifies |
|---|---|
| Claiming your parent as a dependent (credit for other dependents, up to $500) | You pay more than half of your parent’s support for the year and their gross income is below the IRS limit ($5,200 for 2025, adjusted yearly; most Social Security doesn’t count toward it). Your parent doesn’t have to live with you. |
| Head of household filing status | You’re unmarried, can claim your parent as a dependent, and pay more than half the cost of keeping up their main home, even if it’s not your home. |
| Medical expenses you pay for your parent | Deductible if you itemize, for amounts above 7.5% of your adjusted gross income. This can apply even if your parent’s income is too high for you to claim them as a dependent. |
| Dependent care FSA or child and dependent care credit | Adult day care or in-home care so you can work, if your parent can’t care for themselves and lives with you more than half the year. |
Frequently asked questions
Does Medicare pay for a nursing home?
Only for short-term skilled nursing or rehabilitation after a qualifying hospital stay, up to 100 days per benefit period with daily coinsurance after day 20. It doesn’t pay for long-term custodial care. Most long-term nursing home care is paid by the family, long-term care insurance or Medicaid.
Can I manage my parent’s Social Security with a power of attorney?
No. The Social Security Administration doesn’t accept powers of attorney for managing benefits. Apply to become your parent’s representative payee; you’ll need to use the money for their needs and keep records.
Can I get paid for taking care of my parent?
Sometimes. Many state Medicaid programs let a person choose a family caregiver and pay them through self-directed care, and some veterans’ programs pay family caregivers. Your parent can also pay you from their own money under a written caregiver agreement; that pay is generally taxable income to you.
Sources: IRS (For caregivers FAQs; Publication 501), Social Security Administration (representative payees), Medicare.gov, Medicaid.gov and CMS (transfer-of-assets look-back), U.S. Department of Labor (FMLA), Administration for Community Living (Eldercare Locator), U.S. Department of Justice (National Elder Fraud Hotline). Checked November 2026. This guide is educational and isn’t legal, tax or financial advice.
Related: All life event guides, Planning your financial legacy, RMD calculator, Guide to financial scams.