Dear friend, money matters even to the elderly. In some cases it matters most to them. Their needs can often become a long list of medical supplies, special shoes, medications, special health care, food – and the list goes on.

There may come a time when it becomes necessary to manage your loved one’s finances as in my case, my parents. Doing so can be a complex process. Many families find the subject of finances difficult and avoid discussing it until a crisis arises.

There are steps that you can (and should) take to put a financial plan in place before it becomes necessary. Remember that laws regarding matters of power of attorney vary from country to country so it is best to consult an attorney.

The first thing you should do is to have a conversation with your elderly loved one. Ask him or her wishes are regarding their finances and ask who should manage them.

If there is a will in place, it should be reviewed and updated if necessary. And, of course, if there is no will, now is the time! Your loved one should then consult with an attorney and determine who should be in charge of their finances in the event it becomes necessary.

A durable power of attorney can be designated. A durable power of attorney is one that grants the attorney-in-fact the right to continue making decisions on behalf of the principal even if the principal becomes sick or incapacitated somehow.

Normally, powers of attorney are not durable and terminate as soon as the principal loses the mental ability to terminate them. If the principal wants the agent to retain his powers even if the principal becomes incapable, the only way to do this is to grant durable power of attorney. (A general power of attorney allows an agent to act in all normal areas including purchasing or selling property, signing contracts, and other legal actions.)

A durable power of attorney has the authority to manage your loved one’s legal and financial matters in the event that they become incapacitated. If your loved one has already become incapable of managing their own finances and legal matters, it may be necessary to speak to an attorney to establish a guardian who can act on behalf of your loved one. This process tends to be much more complicated if initiated after your loved one has become incapacitated.

The courts will want to guard against abuse of power in order to best protect your loved one. This is one of the strongest arguments for naming a durable power of attorney before your loved one is incapacitated.

Here are some guidelines for the management of your loved one’s finances:
• As a designated durable power of attorney, remember your role is to act in the best interest of the disabled person. Therefore, avoid using your loved one’s funds for any of your own uses.

• You should keep your personal funds separate from those you manage for your loved one.

• You should keep accurate records of all the transactions you make on your loved one’s behalf. Keep receipts, invoices and bank statements.

• Notify all financial institutions your loved one has accounts with that you are authorized to act on their behalf. Give them a copy of your durable power of attorney to keep on file.

• To avoid the confusion of numerous accounts, consolidate your loved one’s assets in as few accounts as possible.

• As durable power of attorney, you should always invest your loved one’s funds conservatively.

Although many people avoid discussing financial matters with their loved ones, it is better to deal with it before it becomes a necessity. This helps to eliminate conflict and confusion. It can also give your loved one peace of mind that their finances will be managed according to their wishes.

With appreciation and gratitude
Nigel St.Hill

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Author's Bio: 

Nigel St. Hill is a writer and a life and money management coach helping people who are ready discover their path to money, abundance and prosperity, so that they could live the life of their dreams. He is the founder of and author of the book, Money Management Caribbean Style and several ebooks including The Easy Cash Flow System, How to Keep Your Doors Open in a Recession, Creative But Practical Ways to Save money, 12 Secrets to Having a Romantic Relationship, Ten Easy Ways to Empowerment, How to Attract Money and Abundance, Uncover Your True Potential and The Complete Guide to Life Skills for Today’s Youth. .
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