Q: My mother recently moved in with me and has assigned me as her power of attorney for finances. What do I need to know about managing her money for her?
A: When someone feels they are not able to manage their own finances they can give the power of attorney for their finances to another person in a legal document. It is not something you can take from another person without their permission. Your mother has trusted you to be this agent for her and to take over managing her money. She also has the right to take back this power if she is able to make her own decisions and she changes her mind.
Taking over the role of managing someone else’s finances is a big responsibility, and one you can feel honored to be trusted with, as well as careful in your execution of your role. You are essentially her fiduciary because you are the person named to manage her money and resources.
This role requires you to manage her money for your mother’s benefit, and not for your own. It may include creating a budget for her, paying any bills or debts she has, paying any taxes she owes, investing and estate planning.
The document of the power of attorney will state the specific authorities you have been granted. Make sure you read and understand what is required of you. If you have questions you can consult with an elder law attorney who can explain the details and the language used.
There are legal responsibilities with being someone’s power of attorney. It means you must act only in your mother’s best interest. You will manage the money and property carefully. You must also keep your mother’s money separate from yours and keep good records detailing how you use the finances.
If you mother is still able to be a part of her decision making, then involve her as much as possible. If she is unable to express her decisions, then consider what you think she would want based on your history with her. Always put her well-being first and do not borrow from, loan, or give away her money to others.
Do not pay yourself for your time managing her money unless that was explicitly stated in the power of attorney document.
It is your responsibility to manage her money carefully using good judgement. This means making sure to pay her bills on time and protect her assets. You may find some banks or institutions will not accept your rights as power of attorney. They may want your mother to sign a document from the bank to give you permission to manage her accounts. This may be fine if your mother still can understand what she is signing.
However, if your mother no longer can make these decisions for herself then provide a copy of the power of attorney and ask to speak to a supervisor, if needed. If that does not work, then you may need to consult with a lawyer.
It is important that you keep your mother’s finances separate from your own. Never mix the assets or deposit her money into your account, even if that makes it easier for you. You want to be clear about your ability to manage her money should anyone choose to investigate or question your ability as power of attorney, including other family members. This means making sure everything is documented and transparent.
Look out for any financial exploitation. It may be that she asked you to be her power of attorney because she doubted her abilities and was targeted for scams. Check that all the money or assets are accounted for, and that no major changes happened recently.
If you suspect she was the victim of scams you can report it to your local Adult Protective Services (APS). To reach APS in Los Angeles County call 1-877-477-3646, and to reach APS in Ventura County call 805-654-3200.
Your mother has entrusted you to look out for her finances and you are no doubt doing other tasks to care for her as well. Thank you for taking on this important role, and allowing your consideration for your mother to guide you.
Martha Shapiro can be reached at Senior Concerns at 805-497-0189 or by email at mshapiro@seniorconcerns.org
