Managing a parent's money: agents, payees and fiduciaries
When a parent needs help with money, a family member may act for them in one of several roles, each with its own limits. This guide covers those roles, the duties they share, how to keep records and how to spot financial exploitation.
General information only. This guide is not medical, legal or financial advice. Talk with a physician, and with an elder-law or financial professional where money or legal papers are involved, about your own situation.
The roles compared
The Consumer Financial Protection Bureau describes four kinds of financial caregivers. Each one covers different money, and holding one role does not give the powers of another.
- Agent under a power of attorney: named by the person in a legal document to handle money and property.
- Court-appointed guardian or conservator: appointed by a court to make financial decisions for the person.
- Trustee: named to manage a revocable living trust.
- Social Security representative payee: appointed by Social Security to manage Social Security or SSI payments only.
- VA fiduciary: appointed by VA to manage VA benefits only.
Day-to-day duties
A person who manages someone else's money is a fiduciary. Social Security asks payees to use the money for the person's needs and in the person's interest, not their own.
Common duties include:
- Work out what the person needs, such as food, housing, utilities and medical care, and pay for those needs.
- Pay bills on time.
- Save money that is not needed now for the person's future needs.
- Keep the person's money in an account titled to show it belongs to them, not mixed with your own.
- Talk with the person about their money and needs, and report changes to the agency.
Keeping records
Social Security asks every payee to keep records of all payments received and how they were spent or saved. Some payees file a yearly report, and all records can be requested.
A separate account makes this easier. Statements and cancelled checks show where the money went.
- Write down each amount received and each amount spent or saved.
- Keep receipts, including for small out-of-pocket costs you pay back to yourself.
- Keep bank statements for the person's account.
- Be ready to share records when the agency asks for them.
Spotting financial exploitation
Financial abuse comes from someone the person knows, such as a relative or an agent, while fraud usually comes from a stranger. The Justice Department lists the warning signs below.
A new friend who slowly takes control of the person's money
- An agent using a power of attorney to take money or property for themselves
- Money meant for care bills being spent on something else
- Forged signatures on checks, deeds or loans
- Someone pressuring the person into loans or purchases
- A new friend who slowly takes control of the person's money
Frequently asked questions
Not on its own. Social Security says a power of attorney or a joint bank account does not give authority over its payments. Social Security has to appoint you as payee.
No. A VA fiduciary handles VA benefits only. The person keeps the right to manage other money, to vote and to sign legal documents.
Social Security lets a payee pay back reasonable out-of-pocket costs spent for the person, such as cab fare to a doctor. Keep records of each one. Other roles have their own rules, so ask the agency, court or a lawyer.
Sources
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