We hear this question frequently.
A family member will call to report that an elderly parent had a stroke, or fell, or has dementia, and now needs the assistance of a family member to manage financial matters. The family member calls, and wants to know if a Power of Attorney document can be prepared for mom or dad. The answer is – only if mom or dad has sufficient mental capacity and is willing to sign legal documents.
A person who signs a Power of Attorney is called the “Principal.” The person who is appointed to assist with financial matters is called the “Agent.” In order to sign a Power of Attorney, a person must have sufficient mental capacity to understand and direct that specific authority over financial matters be granted to the Agent. A family member cannot set up a Power of Attorney on behalf of a parent. Often times, the parent will have experienced a health event, and may no longer be mentally competent to sign any legal documents. If no legal documents are already in place, then there may be no one with current legal authority to assist the parent with his/her finances. This can present a significant logistical problem. How can the family help if no one has legal authority to manage the parent’s finances, and the parent is no longer mentally competent to sign legal documents? In such a case, the family member must petition the Court for conservatorship authority to manage the parent’s financial matters. This process may take up to several months.
In order to avoid the time and expense of a conservatorship and to ensure that there is always an Agent in place who may be able to handle financial matters in the event of a health crisis, encourage your family member to speak to an attorney regarding the benefits of establishing a comprehensive Durable Financial Power of Attorney.
- Megan Selvey, Esq.