Sometimes you need the law to help you help your parent. If you want to help manage your parent's affairs – legal, financial, medical – you'll need legal authorization to deal with banks, the government and doctors. Filing for guardianship of a parent is an extreme step because it strips her of control over her own life. A less-drastic legal method, such as a power of attorney, might be enough to get the job done.
Asking Your Parents
Many people would sooner punch themselves in the face than talk to their parents about end-of-life issues. If your parent needs help, though, and he hasn't asked, bite the bullet and start the discussion. Unless you're going to court for a guardianship, you'll need his permission to manage his affairs. Don't try to force the issue; explain your concerns and listen to his.
Joint Money Management
If all your parent needs is help writing checks or managing his investments, turning the relevant account into a joint account might be all it takes. If, say, a parent is mentally fit but physically unable to sign checks, you, as joint owner, can write and sign checks for him.
This has risks, however. Even if all the money belongs to your parent, your creditors can seize the joint account to pay your debts. It's safer to put your name on the account as an authorized signer: you can still write checks, but none of the money is yours.
Financial Power of Attorney
A power of attorney gives you much greater authority. Your parent signs a document making you her "agent" or "attorney in fact." That means you have the same authority over her affairs as she does for several transactions, including the following:
- Selling her house
- Dealing with her bank
- Managing her investments
- Making management decisions for your parent's business
Your parent doesn't lose any of her own authority over her affairs — the POA gives you the power to help her, not the power to take over. It's terrifyingly easy for an attorney in fact to abuse the POA, so your parent might want to limit your authority. If all you need to do is manage the sale of her house, for instance, the POA can be written to authorize that and nothing else.
A power of attorney stops working if your parent is incapacitated and can't make her own decisions. A durable POA stays in effect, so it's definitely the better choice.
You can find POA forms online for the state where your parent lives, or through an elder-care attorney. After your parent signs the form, have it notarized. Some states require witnesses as well. The state website should list any such state-specific requirements.
A medical POA is a durable POA for healthcare. It authorizes you to make medical decisions for your parent if she's no longer able to do so. If she's given you any decisions about treatment – does she want to live if she's permanently comatose? – your duty is to honor them, however painful it feels to make the call.
Guardianship, also known as conservatorship, is much more work to set up. It requires that you go to court and prove that your parent can't manage his own affairs. If the judge agrees, your parent's control of his money or healthcare passes into your hands. Guardianship is more demanding than being an agent. For example, you'll have to make regular reports to the court to show you're not mismanaging the money. The exact rules for conservatorships vary between states.
Becoming the agent or guardian of your parent imposes a fiduciary duty on you. When you make investment or money decisions, you have to be responsible and use good judgment. You have to make decisions for his benefit, not your own. It's also important to keep his money and yours separate, so it doesn't look like you're trying to leech away his assets.