In July we talked about the perils of being a trustee. But what if someone is just handling or managing someone else’s money? After all, the ability to pay bills can be the first skill that a senior citizen loses, especially if there is any dementia. Are you doing a good job? Follow these 10 things to avoid any problems.
- Keep your senior as invested in the process as possible. This not only can provide valuable direction but keeping the loved one engaged is good for the moral and dignity of the person.
- Your loved one must have a current and well written Durable Power of Attorney. You cannot rely on a form you print from the internet. Florida requires tremendous specificity in powers of attorney and if the power to do something is not explicitly listed you may be out of luck. Managing funds without a Durable Power of Attorney will eventually lead to a roadblock. Think of it like a passport!
- While handling the finances, make sure that all legal documents are all in order to avoid future problems and financial issues with family or court.
- Avoid the temptation to put assets in joint names. Accounts in joint names (payable on death, in trust for etc,) go directly to the person on the account and bypass the Will. This can destroy the plan and intent of the senior and create problems in the family. The exception to this may be a small checking account to pay bills.
- Investments and bank accounts should also be monitored. And organized. Our office always makes an asset list for our clients when they come in. This way the family can have something to work with and maintain going forward. I have not had one client or family be grateful for this list!
- Pay bills online and in general keep copious records and receipts.
- Act as a fiduciary- a person in a position of trust. Always act in the best interest of your loved one. Never borrow any money or commingle assets or spend money on anyone other than the senior citizen. If there is family conflict or potential conflict, consider bringing in a neutral person to oversee or manage funds.
- Consider the necessity of a guardianship. Rarely but sometimes, especially if there is conflict in the family, we might suggest a neutral guardian.
- Know that mis-using a power of attorney etc. can be considered elder exploitation which is a third degree felony in Florida.
- Establish an open-book policy to establish trust with other family members. Give other family members access to the books, and provide bank statements to assure them you are being a good manager. Transparency is very important.
