The Consumer Financial Protection Bureau has partnered with the American Bar Association Commission on Law and Aging to produce a series of free booklets, Managing Someone Else’s Money.
These publications outline the basic legal responsibilities of a fiduciary (anyone who is named to manage money or property for someone else), tips on how to watch out for financial exploitation, and resources for getting additional help.
There are four separate guides for agents under a power of attorney, court-appointed guardians, trustees, and government fiduciaries.
Agents Under a Power of Attorney
The guide for agents under a power of attorney is for family and friends who have been named by loved ones to make financial decisions on their behalf in a legal document, known as a power of attorney. People often make these arrangements so someone they trust can handle their finances if they become sick or injured and are unable to do so themselves. The power of attorney can be revoked at any time your loved one wants as long as he or she is still able to make decisions. The guide explains what you can and cannot do as an agent. It outlines the importance of careful money management, keeping your money separate and maintaining good records.
If a court finds that someone cannot manage his or her money and property alone, it can hold a hearing and name a guardian or conservator. The guide for court-appointed guardians covers only duties of the guardian of property—not someone who is appointed to be the guardian of the person. As guardian of property, you have a double duty: to the protected person you are serving and to the court. You must make decisions in your loved one’s best interest and report regularly to the court. This booklet helps guardians understand the court order, avoid conflicts of interest and keep their loved one’s money and property protected.
The guide for trustees is designed for people who have been named a trustee under a revocable living trust. The arrangement transfers ownership of some or all of your loved one’s money and property from his or her name to the name of the trust. The law places a lot of responsibility on a trustee. You have to keep the trust’s property safe, which may include putting valuables in safe deposit boxes, maintaining insurance and paying taxes. You also must make careful investment decisions with your loved one’s assets. You have authority only over property actually transferred to the trust and only after your loved one has lost the capacity to manage his or her property. As long as your loved one can still make decisions and the terms of the trust allow it, he or she can change or end the trust.
A government agency may appoint someone to manage income benefits for a person who needs assistance. If you are managing benefits from the Social Security Administration or the Department of Veterans Affairs, this guide for government fiduciaries has details about your responsibilities. As a rep payee or VA fiduciary, your authority is limited to managing the benefit checks of the agency appointing you. To manage other money or property of your loved one, you must have legal authority through a power of attorney, trust or court appointment.
Free print bulk copies of the guides can be ordered online.