Friday, March 2, 2018

Will You Be Responsible For Handling Your Aging Parent's Finances In The Future?

Are YOU the one appointed? For older parents who have done estate planning, most have appointed someone to handle finances and business matters if they become incapacitated for any reason. The Durable Power of Attorney (DPOA) is the legal document that makes this assignment. Would you know what to do if the responsibility for handling their money suddenly fell on you?

Are you appointed to take over finances?

The DPOA document itself is surprisingly easy to get. One can download it free from the internet. It has to be notarized, but that is just about the only formality required. A lawyer is not needed to draw one up unless special considerations exist. The court does not supervise what happens to the document. As you can imagine, this extremely powerful tool gives the assigned person the right to do just about anything with someone else's money. In the right hands, it is excellent protection from wrongdoing or mistakes by an incompetent elder. In the wrong hands it is a license to steal. Anyone can benefit from some guidance on what you can and can't do as the agent for another in this financial role. The appointed person is called an "agent", "attorney in fact" or "fiduciary".

The Consumer Financial Protection Bureau, a Federal agency, offers free booklets for those who must take responsibility for finances for another person: Managing Someone Else's Money. More than 1 million Managing Someone Else’s Money guides have been distributed since their release in 2013. Further, as laws about being an agent under a DPOA vary from state to state the Consumer Financial Protection Bureau has created six state-specific guides for Florida, Georgia, Illinois, Oregon and Virginia and most recently for Arizona.

Each guide contains information on the agent’s responsibilities and tips on how to spot financial exploitation and avoid scams. Also, each guide includes a “Where to go for help” section with a listing of relevant agencies and service providers. The guides are not intended to provide legal advice. When there is doubt about using such a document, there is no substitute for competent legal advice.

All that said, how does this agent concept apply to YOU? If you already know that your aging parent has designated you to fill this role if and when the time comes, be ready. You will need to know where your parents' financial assets are located. Which banks or financial institutions do they use? What passwords and account numbers are available? Here at AgingParents.com, where we encounter families with incapacitated or partially incapacitated elders quite often, we find befuddled adult children who have never asked their aging parents where the money is and how to access it. When a health crisis such as a stroke or heart attack happens and their loved one can't answer any questions, someone still has to pay the bills for the incapacitated person. The unprepared adult children may end up using their own resources to fill the gap until the parent recovers sufficiently to give them the information they should have had long ago. And some parents don't recover sufficiently to even do that.

Here are the takeaways:
  1. If you aren't sure whether your aging parents (retirement age and up) have signed a DPOA, find out. If one does not exist, do persuade them to get it done.
  2. If a change is needed on this critical document, such as the appointee turning out not to be honest or not available, ask your parent to sign a new and updated one. Get legal advice as needed.
  3. If you are the person appointed as agent, work on getting the information you would need if you had to manage their money in a crisis, such as a hospitalization. Get account numbers, passwords, checking account location, financial institutions they use, etc. Don't be left in the lurch if you end up having to take responsibility.
  4. Download your booklet, Managing Someone Else's Money so you can know what to do and know how to spot scams that could endanger your loved one.
Preparation now can save you a lot of stress later.

Carolyn Rosenblatt, RN, Elder Law Attorney, Healthy aging and protecting our elders, AgingParents.com, AgingInvestor.com

Full Article & Source:
Will You Be Responsible For Handling Your Aging Parent's Finances In The Future?

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