Do you have durable powers of attorney with your parents? With durable powers of attorney, you can make decisions on behalf of your parents for both financial or healthcare reasons if they become incapacitated. If you have been granted this responsibility, it means your parent’s have put full trust into you to make rational decisions on their behalf. If you do not understand your responsibilities for this role, it is important that you learn them. Not knowing how to properly function with durable powers of attorney can put your parents’ health and finances at risk.
Your role as fiduciary
When you act with powers of attorney for your parents, you are called the fiduciary. This responsibility is to manage your parents property and financial issues for their benefit. You are handling your parents’ money, not your money, so it is important that you:
- Act in good faith and be honest and trustworthy
- Make decisions only in the best interest of your parents
- Properly handle your parents property and finances
- Keep your personal money separate from your parents money
- Keep your parents informed of anything that may affect their health or financial interests
- Maintain proper record keeping
As the fiduciary for your parents, it can be important to make sure all their important documents are kept safe. You should make copies of all these documents and keep them in a place where they are only accessible by you. These documents include:
- Ownership documents such as titles, deeds and loan documents
- Contracts and other legal documents
- Bank statements and records of financial holdings
- A listing of major assets including, real estate, stocks, cash, insurance, jewelry and financial accounts
- Outstanding debt documents
- Information on advanced directives
- Important numbers and contacts of doctors, accountants, associates and attorneys etc.
What not to do as a fiduciary
You are not able to profit from your decisions as a fiduciary and it is best to watch out for any conflicts of interest that may arise when acting in place of your parents. Here is what you should not do:
- Use any of your parents money for your own endeavors such as creating a business or going on a vacation.
- Conduct the sale of your parents home for less that its value to anyone, especially to a family member or to yourself.
- Use any of your parents property to gift to anyone else
The role of fiduciary is one that comes with responsibility and trust. The duties of a fiduciary are usually given based on confidence that you will act in the way that is honest and in the best interest of your parents.