Informal Money Manager Option
If an incapacitated family member is having serious issues keeping money, you need to act fast. There are a lot of things you should know when it comes to managing money that doesn’t belong to you. Fortunately, the law fully supports situations such as this.
First, you need to plan. If your loved one is still actively signing checks and using the ATM, then as a precaution, discuss the issue with them. This precaution is necessary, especially if the incapacitated person has a mental challenge like memory loss. Your sound judgement will help ensure the right decisions are taken.
Once the money manager (it could be you) steps in, you can pay bills, make deposits, withdrawals, and monitor the account to ensure there is no scam or financial exploitation. No significant changes to the account will occur until the account owner is mentally stable enough to make or approve the changes. Despite this, a couple of things can still go wrong.
- The money manager can steal from the account
- Creditors of either signatories to the account can try to collect debts
- Disputes about who the money belongs to once the incapacitated person dies
To avoid facing hassles like this, it is important for the money manager to be as transparent as possible. He should not borrow from the account or use it for his own privileges.
Formal Legal Options
Another way to manage someone’s money is by making it legal, and an attorney can help guide you through the process. Ideally the money owner (the person you are concerned about) is of sound enough mind to choose a guardian of the assets; otherwise try to choose a reliable family member.
Assorted options include the following:
- Power of Attorney: This is a legal document giving another person authority to act upon the behalf of someone in else. In this case, that would be financial decisions. The money owner must be of sound mind to grant a power of attorney or revoke it.
- Trustee: When the person is still in sound mind, he can transfer assets to a trusted person. This person would be the one to make financial decisions in case of incapacitation.
- Government Fiduciaries: A government agency may appoint a government fiduciary to manage any benefits issued by agencies every month.
- Court Appointed Guardians: The court may appoint a guardian to act in the best interest of the person.
Chad Foster is a trusted family law and divorce lawyer serving Snohomish and King counties with an office in Bothell. Contact us today to discuss your legal issue.