Many times older residents have a helpmate who writes out their checks and then they simply sign them. However, if even writing checks can be too difficult, or if there is a temporary illness, the helpmate may need more authority in order to give full assistance.
A Durable Power of Attorney allows a person (called a principal) to nominate an agent to handle all current financial and business affairs. A power of attorney should be “durable,” meaning it continues the authority of the appointed agent even if the principal becomes incapacitated.
Powers of attorney are not simple and should be executed with care and proper legal advice. The appointed agent can be open to criminal and civil liability if the durable financial power of attorney is not properly prepared or the agent does not understand his or her responsibilities.
Another way to assist an elderly person with their finances is to be a joint signer on bank and investment accounts. Being a joint signer gives the authority to sign checks and investment orders on behalf of the principal. This should not be confused with being a joint tenant.
A joint tenant on an account usually means that the tenants have right of survivorship. That is, upon the death of one, the surviving tenant gets everything in the account. Joint tenant accounts can be a problem because each of the joint tenants owns the account and each can take out all of the money and the creditors of each joint tenant can reach the money.
In addition to the payment of bills, older person might also need assistance with obtaining government benefits, accessing retirement accounts or arranging for in home services. A co-signer or joint tenant cannot be of assistance with these tasks. Only, the agent under a Durable Power of Attorney can help with these needs.
Sharon Ravenscroft, Esq., of The Cavanagh Law Firm, PA, with offices in Phoenix and Sun City, can be reached at (623) 815-7451 or Sravenscroft@CavanaghLaw.com. Sharon’s practice focuses on the preparation of Wills, trusts and premarital agreements, along with probate and business law.