Posted by Gerald J. Turner –
It is an important responsibility to be asked to care for another person and keep track of his or her money. Unfortunately, the adult child or other loved one who has been asked to have financial power of attorney often does not have all the information or resources they need to be successful.
Here are a few tips to help you stay on the right track:
1. Do not commingle funds. It is imperative that you keep your personal finances separate from the elder’s. Money should not be mixed, nor should it be transferred from one account to another.
2. Handling bank accounts. Some people discourage elders from placing another person’s name on their bank accounts, because that person has equal rights of withdrawal, and can easily wipe the elder out of the savings. This is certainly true–but more and more people are taking this route because they want to “avoid probate,” or because they are intimidated by the idea of creating a proper power of attorney document. There may be good alternative solutions that our office can recommend, such as trusts.
3. Document everything. Next, as a person named attorney-in-fact, it’s also recommended that you document everything. Every purchase, doctor’s co-pay, or check written on the senior’s behalf should be entered into an online ledger to which the elder has access. If a legal dispute ever arises, you need to be able to protect yourself with accurate documentation.
4. Take a team approach. Keep your siblings in the loop about the parent’s finances. While they may not have authority, their counsel should be respected when appropriate. After all, two heads are usually better than one. They will also have less legal ground to stand upon if they ever decide to accuse you of acting improperly.
The most important thing is to make sure that both parties involved with a power of attorney, engage with a trusted attorney who specializes in elder law to oversee the process. This way, you can avoid problems and headaches down the road and keep the focus on what’s important: the quality of life for the senior.