How Do I Take Care Of My Parents’ Money?
As your parents age, you may notice they are showing signs of aging like forgetfullness, or irresponsible spending. As they age, they lose the mental acuity they had when they were younger. This can make them more vulnerable to financial exploitation, identity theft, or making unwise investments. Adult children often ask what legal steps they can take to take care of their parents’ money. Indeed, there are several options in Massachusetts.
Many aging parents choose to execute a durable power of attorney. This document is used to designate an agent – usually a spouse or an adult child – to act on the parents’ behalf with respect to their personal, financial, and business affairs. Provided that both of your parents have the capacity to execute legal documents, they can each create a power of attorney that names you as their agent.
Every power of attorney is different, but they are often used to allow a child to take over a parent’s finances if he or she becomes incapacitated due to age or infirmity. Children who are named as agents need to be careful, however. The power of attorney itself will clarify both the authority of the agent and the limitations of that authority. Exceeding the power granted could cause legal problems.
Before the child can take over the parent’s financial affairs, the power of attorney may require that at least one medical doctor confirm that the parent lacks capacity or cannot safely make financial decisions. An estates and trusts attorney can help your parents execute a power of attorney and explain the rights and obligations that you, the child agent, would have under it.
But what if your parents lack the necessary legal capacity to execute a power of attorney? It may be time to consider a conservatorship. This is a legal arrangement by which a court appoints an individual (the conservator) to take care of the property, money, and business affairs of an incapacitated parent (the protected person).
The duties of the conservator include:
- Paying bills and taxes on behalf of the protected person
- Handling the personal assets of the protected person
- Managing the protected person’s real property
- Executing contracts for the protected person
- Overseeing the protected person’s business operations
- Paying for the protected person’s medical and living expenses
To become a conservator, the adult child would need to request an appointment from the Probate and Family Court by filing a Petition for Appointment and a Medical Certificate. This document must be signed by a licensed medical professional who can attest to the nature of the parent’s limitations. Notices to the parent’s spouse, other adult children or caregivers are generally required. Next, the court will schedule a hearing with the judge. Depending on the circumstances, the parent may receive an appointed attorney to represent them at the hearing as well. The judge will decide whether to appoint the adult child to be a conservator, based on the parent’s condition.
Conservators have ongoing duties attendant to their authority over an incapacitated person’s financial matters. For instance, they must submit a detailed inventory of the parent’s assets within 90 days of being named a conservator. They must also provide an annual accounting and may be required to propose a financial plan for the parent. A conservator may also need to work with a guardian or healthcare proxy to ensure that the parent is properly cared for and that funds are available to pay for their care.
If you ultimately find yourself in the position of worrying about how to care for your parent’s money, you can also look into the Massachusetts Family Caregiver Support Program. This free program provides a number of valuable support services to individuals who qualify under the state’s guidelines as a caregiver, including workshops, training, and educational materials. These resources can be especially useful for adult children who are stressed by the difficulties of serving as a caregiver for an aging parent.
While caring for your older parents’ finances can be challenging, you don’t have to face it alone. Both you and your parents have legal options for laying a solid foundation to prepare for the future.
Contact our Family Law attorneys about your specific matter.