As Pure as the Driven Snow – When You Manage a Loved One’s Money
Perhaps your child suffered a brain injury in a car accident and you are in charge of managing his settlement. Or perhaps your father is elderly and you hold his power of attorney of property, which entitles you to manage his investments.
To be a trustee or to act as an attorney of property is a very serious matter. It means that you hold an office which is separate from your role as parent or loved one. If you abuse that office or that trust, you can be held civilly or criminally liable for any money that is taken.
I have found that it is rare for someone to intentionally take funds that a person knows are not his to take. But human nature is odd thing at times and we can justify almost anything:
- Yes, I paid for a trip to Florida with his money but we needed a break from all the caregiving.
- Yes, I paid down my mortgage with his money, but he lives with us and it is the least Dad can do for all we do for him.
If you are in charge of someone’s investments or income, be proactive. Consider:
- When a court appoints you to be in charge of a person’s money, consider giving that court order to other family members so you are morally accountable to them as well. It is a public document and nothing prevents you from sharing it.
- When your parent gives you a power of attorney, ask that another family member be made a co-attorney so that two signatures are needed
- Send quarterly financial updates to other family members
- If you are caring for an elderly parent, at the time the power of attorney is implemented, discuss with the parent and siblings your need for monthly compensation for this and get authorizations from your (mentally competent) parent for these payments
- If ever in doubt as to whether a payment is appropriate, you can always apply to the court for directions