Planning for financial security later in life is important, and many people in Texas understand this. However, people do not always anticipate that there may come a point when they might not be able to handle their own finances. Financial powers of attorney can help address this issue and are an important part of elder law. However, having a power of attorney for a loved one can be difficult, so here are a few things to keep in mind.
When managing a relative’s finances with a financial power of attorney, it is possible that other family members might second-guess decisions. Disputes between family members can even lead to audits of that person’s activities. Even though most people who hold powers of attorney do their very best to fulfill loved ones’ wishes and needs, audits leave these individuals in vulnerable situations.
A common point of dispute is the commingling of funds. For example, a person might deposit his or her loved one’s funds into a personal bank account in an effort to more easily keep an eye on all money. This not only makes managing money more difficult, it also opens up a person to scrutiny. Instead, creating a separate account — if possible in the relative’s name — is more efficient for tracking those separate finances. It is also easier to differentiate between whose funds are being used to pay which bills, and to track where payments are going.
Holding a financial power of attorney for a loved one is a significant responsibility, but it can also be a significant honor. An older Texas resident must carefully consider who he or she believes would be the best fit and most trustworthy individual for the task. Those tasked with this responsibility may want to familiarize themselves with how powers of attorney function within elder law, as this can help avoid future disputes.