Durable Power of Attorney for Finance: Is It Time to Take Control of Your Senior’s Money?

Has your mom, dad, or other senior you love had trouble handling their money lately? Perhaps they used to be on time with things like bills, but you’ve noticed several “past due” notices coming in the mail. Maybe they were always diligent about sticking to their budget, but now they spend grocery money on sweepstakes and scams. There’s also the possibility that complicated things like filing taxes or applying for Medicaid are simply too much for them, and they’re actually requesting your help. If any of these scenarios look familiar, it may be time to consider becoming your senior’s durable power of attorney for finance.

What is a durable power of attorney?

A power of attorney (POA) isn’t actually just one thing – there are two different types. One is for making medical decisions, and the other is for finances. This article covers the latter. Basically, it allows you, the “agent,” to make financial and legal decisions for the “principal” (i.e. your senior loved one). An agent can be a grown child, other relative, or friend of the senior. However, the agent must typically be eighteen years or older, depending upon the state where the POA is granted.

When should a durable power of attorney for finance be considered?

Ideally, the time to start the discussion on durable power of attorney for finance is before the senior needs one. Unfortunately, money is often a sensitive subject, and many families and friends of the senior are reluctant to bring it up unless they absolutely have to.
Legally, the senior in question must be of sound mind at the time he or she signs the POA documents. They must understand that they are appointing someone the power to handle their finances if needed, and have the express wish to do so.
A durable power of attorney for finance can be effective immediately, or it can dictate that the transfer of responsibilities occur in the future, when the senior is no longer capable of handling their own affairs. Regardless, the senior can continue making their own decisions until they choose to have the POA go into effect.

Discussing POA’s with your senior

Understandably, most seniors don’t relish the thought of having a POA drawn up (although some do expressly ask for one). They may feel it means a loss of their independence. The senior may also be afraid that the appointed agent will do something with their finances that the senior doesn’t approve of, including using those finance for the agent’s own purposes. It may make the senior feel more at ease if you reinforce that the decision to draw up a POA is theirs alone, and that as long as they’re considered mentally competent, they can revise or cancel the POA at any time.

What if a POA is drawn up too late?

If your loved one is considering a durable power of attorney for finance, there’s a reason the timing is crucial. If they become incapacitated – or are declared incompetent – and no POA has been determined, loved ones won’t be able to make financial decisions on the senior’s behalf. They also won’t be able to handle any of the senior’s finances, including paying bills and applying for the senior’s Medicaid. If you did want to accomplish these things, you’d have to go through the courts and request to become the senior’s legal guardian.

The time to consider a durable power of attorney for finance is now

Becoming the durable power of attorney for finance in regards to your senior can be a tough decision – both for you and your loved one. However, if you think it may ever become necessary in the future, the time to act on it is now. As you can see from what you just read, the longer you put it off, the harder and more involved taking over your loved one’s finances becomes. Discuss becoming a POA with your senior today, so that any decision-making transitions will go as smoothly as possible.
If you are unsure of how to best help an aging loved one, the trained and compassionate staff at the Institute on Aging is here to help you make that decision and gain the best in at-home senior care. Contact us to find out more.

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