Your Role as Power of Attorney: Managing Your Parents’ Affairs

May 1, 2024

Updated for 2024


Understanding Financial Liability as Power of Attorney (POA)

One of the first questions you may have is whether you are financially liable as a POA. The answer is no, but there are significant financial implications to consider. It’s imperative to keep your parents’ finances separate from your own and always prioritize decisions that benefit them. Failure to do so can lead to legal consequences, particularly regarding accusations of financial elder abuse.

Starting Your POA Journey

Where do you begin? Understanding the scope of your powers is essential. Review the language and conditions of the POA document. Determine if it’s active or if there are conditions before you can act on behalf of your parents. Additionally, clarify if the POA designates you as a trustee of any trusts.

Gathering information about your parents’ financial situation is crucial. Compile a contact list of their financial team, including investment advisors, attorneys, and CPAs – and then reach out to all of them. Collect all relevant documents, assess their spending, and address any financial chaos that needs immediate attention.

By working with your parents’ financial advisor and other professionals, you can get any needed clarity on their current financial condition – and decide if any actionable steps in their best interest are necessary.

Executing Your Plan

Once you have a comprehensive understanding of your parents’ affairs, it’s time to execute your plan. Contact their financial institutions to gain access to accounts and information. Be sure to collaborate with their financial advisor to review their plan and portfolio, ensuring investments align with their needs and risk tolerance. Don’t overlook insurance coverages – ensure policies are up to date and haven’t lapsed.

Strategizing Your Approach

Remember, you don’t have to navigate this journey alone. Consider enlisting the help of professionals such as elder law attorneys, accountants, or daily money managers to assist with various tasks. Delegating responsibilities can alleviate stress and ensure that all aspects of your parents’ affairs are managed effectively.

As a POA, you can care for your parents and ensure their wishes are honored. It’s a chance to repay them for all they’ve done for you. By taking proactive steps, seeking professional assistance when needed, and maintaining open communication, you can navigate this journey with confidence.

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