Taking over an elderly parent’s finances should he or she become incapacitated might be a difficult concept to think about. It is important, however, to have a plan for your parents’ financial futures to ensure they are well taken care of. Here are some things to consider when it comes to managing the finances of an elderly parent.

AgingCare.com, an online community of elder care experts and caregivers who provide practical advice, dependable information and support, offers these tips on what you should know about your parents’ finances:

Have your parents established a durable power of attorney (POA) to manage their finances? This step is very important – if you are not named in a POA, you will be required to go to court to obtain guardianship of your parent in order to manage accounts on their behalf.

Know where they keep their financial records.
You should know where to find financial records when you need them, whether they are in a bank, in a safe or under the mattress.

Know the names of their financial institutions and their account numbers. Knowing these numbers will help prevent frustrations later when the time comes to manage their finances for them.

Find out what their monthly expenses are and how they pay their bills. If they pay their bills by mail, it might be worth the time to set them up with automatic bill payment so that their bills will get paid should they suddenly be hospitalized.

Learn what their annual income is and where it comes from. Find out if your parent receives a regular pension check, dividends from investments, disability or alimony.

Know what kind of health and long-term care insurance your parent has. This is important to know if your parent is placed in an assisted living or a nursing home, as regular health insurance won’t cover the cost of long-term care.

Work with their financial planner or accountant if they have designated one. These professionals will be able to help you with estate planning and other financial issues.

David K. Randall of Forbes.com also features some insightful thoughts from Michael Kay, a financial planner in Livingston, New Jersey, on taking over elderly parents’ finances. “It could be one of the first times that a parent loses control and the child becomes the caregiver,” says Kay. This can be even more difficult if children don’t know much about the state of their parents’ finances at that time.

Make the transition easier now by helping your parent utilize direct deposit for things like Social Security checks. In addition, put utility bills on automatic withdrawal. Even if your parent keeps what looks like a complete list of accounts, double-check their list against tax returns and Form 1099s from payers as they come in.

Simplify where possible. Individual retirement accounts of the same sort can be consolidated, as can bank and brokerage accounts that may have been built up over the years. Find financial service companies that will send duplicate paper statements to the parents and the child, or will send statements to a parent and allow accounts to be viewed online.

Also consider looking into state or federal benefits. The National Council on Aging (benefitscheckup.org) offers information on eligibility for discounts on utility bills, property taxes and health care. The U.S. Administration on Aging (eldercare.gov) lists social services for elderly people, such as home health care, by county.

Knowing the answers to some basic questions can help make managing your elderly parents’ finances that much easier when the time comes. Be proactive about learning these things early on in order to prevent confusion and frustration later.