Senior citizens can be very vulnerable to financial problems, often because the ability to care for such complex concerns tends to decline with age. This may cause serious problems, such as having utilities shut off, late housing payments, or falling behind on other bills and necessities.
Once headed down this path, problems tend to compound, making it difficult to dig back out of this financial hole Family members may want to help their senior loved ones manage their finances, but it’s usually not as easy as just jumping in to lend a hand. Certain documents or legal proceedings may be necessary to ensure finances are handled correctly and by the right people.
Many families use a financial power of attorney (POA) document to help their senior family members. Common types include a durable POA, which is in effect as soon as the senior signs it or a springing POA, which only comes into effect when a doctor determines that the senior is incapacitated. The POA names an agent to care for the financial concerns and that person has a legal, fiduciary duty to make sound financial decisions for their loved one.
A revocable living trust can also help to handle financial affairs. At the time the trust is created, the Grantor names a Trustee to be in charge of all trust property and a Successor Trustee to serve if the original Trustee is ever unable to carry out their duties. The Grantor usually serves as the initial Trustee, but when they can no longer handle their own affairs they’ll turn control over to the Successor Trustee. The Successor Trustee also has a legal and fiduciary duty to only act in the best interest of the Grantor.
Finally, a conservatorship is a legal proceeding that grants control of an incapacitated person’s financial and health care concerns to a court-appointed conservator. This is often a last case scenario if the senior did not create a POA or revocable living trust. A family member is usually named as conservator, but there are times when an independent party is named by the court instead.
If you have additional questions about managing an elderly family member’s finances, or if you’d like to discuss strategies to make sure your loved one is always in sound financial hands, please contact Jarvis Law Office at 877-653-3450 to schedule an initial complimentary consultation.