Micah is Power of Attorney (POA) for his father, who has dementia and cannot manage his affairs anymore. Micah refuses to tell his siblings what he’s doing with their father’s money or show them any records. His brother believes Micah is stealing their father’s money, which means he’ll inherit less when their father dies. Micah’s sister worries there won’t be enough money to pay for their father’s care. Accusations, resentment, suspicion, and anger build until the siblings no longer see or speak to each other.
If you are POA for your loved one, you can avoid the kind of situation described above. Here’s how:
- Keep your money separate from your loved one’s money
- Maintain detailed and accurate records of your loved one’s money. Track: (a) income from all sources, (b) every penny you spend on her behalf, and (c) how you invested her money and the status of each investment
- Update the income and expense records at least once a week
- Keep receipts, statements, and tax records
- Every month, send a copy of your records to family members who have an interest in your loved one’s money; that is, they might inherit money from her
This kind of recordkeeping and disclosure is known as an accounting. You’re keeping your loved one’s accounts and, by disclosing what you’re doing, demonstrating that you are accountable and have nothing to hide. If you’re still concerned about potential family fights over what you’re doing, hire an auditor to review your records at the end of each year and send a copy of the audit to family members. Contact a local accountant for auditor recommendations.