With an increasingly elderly population and a rise in multigenerational living, many Minnesotans are choosing to take on power of attorney in order to help aging parents handle their finances. This important estate planning tool allows a son or daughter to act on behalf of a parent whose age or disability makes day-to-day tasks difficult or impossible.
However, it can be hard to predict when and how a loved one will begin to slip. Impairment may come suddenly, as with a fall, or it may develop gradually with the onset of dementia or Alzheimer’s. Establishing power of attorney early, even before it is strictly necessary, is crucial for ensuring that a trusted family member or other reliable agent is empowered to handle estate and finance issues when needed.
Prevent accusations of financial abuse
It is especially important to set up power of attorney early on in cases where there are concerns about a loved one’s mental decline. Conferring with a qualified professional while an aging parent is still competent ensures that he or she can make an informed decision. It also can protect the individual taking on these responsibilities from potential accusations of theft or financial mishandling.
Take the recent case in which family members accused a daughter of taking financial advantage of her mother. According to the Star Tribune, a forensic audit during a contested probate proceeding raised potential concerns that the daughter had inappropriately taken possession of her mother’s home and made $453,350 in family gifts on her mother’s behalf.
Fortunately, two lawyers involved in the estate planning process were able to confirm that the mother was competent when she chose to give her daughter power of attorney and to transfer her house’s deed in the event of her death.
Stay informed, stay in touch
Unfortunately, in this case the dismissal of theft charges came too late to prevent the damage done to a reputation. As happens too often, bitter family feuding can make the probate process a painful one.
When a family member takes on power of attorney for an aging loved one, it is essential to maintain open communication with others in the family about decision-making processes. It is also important to consult with an estate planning agent carefully about exactly what actions the power of attorney does and does not allow on a parent’s behalf.