What Every Caregiver Needs to Know About Power of Attorney
September 18, 2018
By Tyler Zellmer
Personal Trust Relationship Manager
As a caregiver, you might have a variety of responsibilities — nurse, cook, housekeeper, and errand runner (just to name a few). But you also could be responsible for managing the finances of the person in your care, something called "power of attorney."
What Does Power of Attorney mean?
A "power of attorney" is a legal document giving you the authority to make financial decisions for someone else. It typically goes into effect when physical or mental disability prevents the person you're caring for from handling his or her own finances. As the agent, you're required to act in the person's best interest, manage money and property carefully, and maintain accurate records.
An agent performs many different tasks:
1. Pay Bills and Taxes on Time
You might pay bills, oversee bank accounts, review financial statements, and pay for items the person you're caring for needs. If the person owns property, it will be your job to maintain it and make sure it's insured. Paying bills and taxes on time and collecting debts, such as rents, is also the agent's responsibility.
2. Make Proper Investment Decisions
You may also have to make investment decisions for a loved one. Your financial or tax professional can help you make choices based on the goals and needs of the person in your care. If you don't currently have a financial professional to turn to, set up an appointment with one today.
3. Create a List of Assets & Debts
To make sound decisions, you'll need a complete picture of the individual's finances. Compile a list of all assets and debts, including bank and retirement accounts, investments, real estate, vehicles, insurance policies, valuable personal property, and unpaid bills and outstanding loans.
4. Keep Sound Financial Records
It's important to have detailed and accurate records of the person's money and property and the amounts you've spent or received for the person's care. Include the amounts of checks written or deposited, dates, reasons, and the names of the individuals or companies involved in the transactions. Retain all receipts, even for small expenses, with notes describing the purchases, and avoid paying with cash. Also remember to keep your own money separate, even when the person you're caring for is a close relative, to avoid any confusion over who owns what.