Dear Bebe,
When my mother did her estate planning several years ago, I was told I would be the trustee for her trust and the agent under her Financial Power of Attorney, should there come a time when she can no longer handle her own finances. Well, that time has come and it’s my time to step in. My sister is my mom’s live-in caregiver, but I am in charge of all the financial matters. What does being a financial caregiver entail and do you have any tips for me in my new role?
Thanks!
Finn Anshul
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Dear Finn,
According to a new Merrill Lynch study, 92% of caregivers are paying bills from their care recipient’s accounts; monitoring bank accounts; handling insurance claims; filing taxes, and managing invested assets.
Study authors offer advice to current and future financial caregivers, as follows:
· Find out where documents are located: Taking responsibility for a parent’s financial affairs will be easier if you’re able to have this conversation while your loved one still has the cognitive ability to understand the situation.
· Keep detailed records of all financial transactions made on behalf of your mother: Meticulous record-keeping is typically required with financial powers of attorney. So, make sure you stay organized from the start, noting every financial transaction – including income and expenditures – for your mother.
· Don’t commingle her property with your own: You may need to set up specially designated accounts for your mom in order to keep all funds distinct and separate. Commingling funds can lead to breaches of fiduciary duties, putting agents at risk of getting sued.
· Get help, if needed: If your mom’s financial affairs become complicated and overwhelming, get help from a professional in carrying out your duties. The best place to find a professional is on the website of the American Association of Daily Money Managers.
Take care of your own financial matters, as well
Respondents to Merrill Lynch’s survey report cutting back on expenses, having trouble paying their bills, dipping into personal savings, reducing their work hours, and leaving the workforce. As a financial caregiver, you need to remember to take care of yourself — health wise and financially!
Hope this is helpful. Good luck in your new role!
Bebe
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