by Anita Schnee, Attorney at Law
Your sister Martina asks you to serve as her power of attorney. She is concerned that if she gets sick, she would need someone to step in and pay her bills for her.
You’d like to help, but you’re concerned about taking all that responsibility. People named as powers of attorney are considered in law as “fiduciaries,” who must act to a high standard of good faith and honesty. This means that you must keep careful records, you must not mix Martina’s money with yours, and you must use her money for her benefit, only.
Don’t let the responsibility stop you. The Consumer Financial Protection Board (CFPB) has issued a guide to assist you: “Managing Someone Else’s Money: Help for Agents Under a Power of Attorney.” Download your free guide here.
This guide is well worth your time and trouble. Knowledge is power. For instance, did you know that if you use Martina’s money to buy a car to drive her to her appointments, you will create a conflict of interest if you also use the car for your own needs? Might there be friction with other family members who don’t agree with your decisions? Consult the guide for advice. The guide also emphasizes how important careful record-keeping may become, if there is any possibility that Martina’s property goes missing due to others’ financial exploitation.
