Steps to take when managing a loved one’s affairs

Legal

A loved one’s incapacitation can leave you in charge of their affairs, possibly putting you in quite a difficult situation.

In this article, we’ll outline the eight main steps you must follow to respect their wishes and use their assets correctly.

1) Study the power of attorney agreement

Low-cost or free power of attorney templates give anyone a chance to set out their wishes – and assign someone as their “agent” to carry these out. If an incapacitated loved one has asked you to serve in this capacity, the first step is always checking the agreement.

You’ll likely already be familiar with the broad strokes; after all, it’s only going to take effect if you signed it. However, you should still go over the fine print to double-check the specifics.

The agreement could cover how to use their finances, what treatments they’d be okay with, and more. It might have explicit rules or may simply ask you to use your judgment. This means you should, for example, intuit any non-covered treatments they’re likely against.

2) Gather important documents

When you’re suddenly in charge of someone’s affairs, you’ll need a copy of the POA form. This will help you immediately prove that you’re the main point of contact for their health or finances.

You’ll also need a number of other forms and documents, including:

  • Their ID and social security card
  • Their bank statements and records of any existing investments
  • Their current insurance policies
  • Their medical records
  • Their estate planning documents (including their will)

3) Consider your suitability

Serving as someone’s power of attorney agent might involve making hard decisions. These can be as simple as an uncertain investment or as drastic as turning off life support.

Ask yourself if you can confidently do the job they’ve set out. If you’re second-guessing yourself, it may be worth contacting your loved one’s backup choice (if one exists).

4) Notify relevant parties

If your loved one’s affairs are now under your control, people need to know. Depending on what type of POA they’re using, this can include their financial advisors, doctors, insurance providers, and all immediate family members.

This might include giving out copies of the POA agreement, but only to people who also need to know your loved one’s wishes. Their healthcare POA, for example, might have sensitive details, but their doctor can’t always rely on your guidance.

5) Start managing the affairs

Once you’re ready to start acting as their agent, the next step is to take care of anything on their behalf. The actual tasks depend on the type of POA you have.

For example, here’s what you’ll need to do with a healthcare power of attorney:

  • Weigh up different treatment options, factoring in cost and reliability
  • Veto treatments that would likely conflict with your loved one’s beliefs
  • Speak to doctors about accessing your loved one’s medical records
  • If necessary, transfer your loved one to a more-specialized facility
  • Consider end-of-life care decisions if they don’t seem to be improving

Alternatively, if you’re using a financial power of attorney, common duties include:

  • Paying bills and managing finances, including paying for healthcare
  • Selling investments or assets when their value is at an all-time high
  • Preparing and accurately filing tax returns on your loved one’s behalf
  • Addressing debts and possibly negotiating a better payment plan
  • Placing funds in irrevocable trusts to keep them safe from creditors

6) Keep detailed records

No matter the type of POA you have, create a detailed report for your loved one; they’ll want to know how you used the power they gave you. You must also make notes of every medical fee.

A ledger or spreadsheet is essential here. Whatever route you take, you’ll need an easy way to set out your decisions, as well as tally everything together at the end.

7) Be transparent

You’ll likely be privy to more of what’s happening to your loved one than anybody else – so make sure you find time to keep everyone else in the loop.

Don’t overwhelm them with every minor change in their condition, but they must know about any major developments as soon as possible. Otherwise, there could be serious family conflict.

8) Get help for yourself

Acting as someone’s POA agent is sure to be stressful. Even if you’re sure you can handle it, it’s going to take a toll. Make sure not to push yourself too far – and lean on other loved ones where possible.

For more administrative problems, ask a lawyer or financial expert for advice. You’ll never have to do this alone; loved ones and professionals are always ready to help however they can.

Manage your loved one’s affairs

When managing someone’s affairs, how you use the powers they’ve given you is just one part of the equation. You’ll have a lot of work to do beyond this, so make sure you follow the steps above.