If you have a durable power of attorney over your aging parent, that means that you can act on your parent’s behalf in financial matters if your parent becomes incapacitated. “Incapacitated” means that your parent no longer has the ability to understand and appreciate the consequences of their actions to make rational decisions. It’s important that you know your responsibilities and rights, or you could do something that puts your finances and your parent’s estate at risk.
Your Role as a Fiduciary
As a fiduciary, you must manage your parent’s money and property for their benefit, not yours. You must always remember that it’s not your money. You must:
- Be trustworthy, honest, and act in good faith
- Act only in your parent’s best interest
- Manage your parent’s money and property very carefully
- Keep your parent’s money and property separate from yours
- Inform your parent of things that affect their interests
- Maintain good records for any decision you make
A fiduciary who doesn’t meet these requirements could be removed as the fiduciary, sued, be ordered to repay money, or even possibly go to jail.
What Not to Do
You can’t profit from your decisions and you have to avoid conflicts of interest when making decisions for your parent. Examples of what not to do:
- Use some of your parent’s money to start a new business for yourself or go on vacation
- Sell your parent’s home for a less than a fair market price to anyone, including yourself or a family member
- Make gifts of your parent’s property to someone
How to Avoid Any Issues
Contact a lawyer to review the durable power of attorney document and give you advice. We’ve helped many clients understand what they can and can’t do under a power of attorney. It’s important to understand your fiduciary role so that you can take proper care of your parent.
Call us today at 617.299.6976 or send an email to mkarr@maheritagelawcenter.com to schedule a confidential, no-cost consultation to discuss how we can help you with any of your estate planning, probate, or elder care needs.
