Get permission to handle financial transactions for your parents

Jeremy Nachtigall • February 10, 2021

You might want to start discussing having your parents name you their power of attorney (POA) so you can legally make financial transactions and decisions for them. This can be a difficult conversation because Mom and Dad might feel as if they are giving up control. So approach the conversation very gently. 


The POA could be limited, meaning that the language in the power will be very specific, limiting it to specific items. This may be a good way to break your parents into the idea of letting you handle some of their financial transactions.

Then, as you build trust, talk to your parents about the benefits of having a general power of attorney that would allow you to handle all financial transactions in case they no longer were able to on their own. Some families prefer not to share financial information with each other. In these situations, some DMM’s will act as agents for your parents, should they still want to maintain their privacy, which can also be beneficial to them in maintaining their dignity.


You're also going to want this authority to go into effect immediately rather than down the road. In legal terms, this means to look for a "durable" rather than a “springing” POA. If there is an emergency that requires a signature, you're going to need that POA to be immediately executable so you can act on behalf of your loved one. In fact, on new years eve, my client, in an emergency involving her husband, needed a POA and fortunately it was durable! The moral of the story is to be prepared because you never know.


Most, if not all, elder care attorneys will agree that the POA is the most important document to have. I work with elder care attorneys who are open for business and practicing appropriate social and physical distancing by offering drive-by document signing because of the importance of getting these documents signed and filed expeditiously. 


Without power of attorney, your hands might be tied when it comes to helping your parents with their finances or in the case of their health, a healthcare POA otherwise known as an Advance directive. I worked with a client who was incapacitated and needed to apply for Medicaid. The application requires a five-year history of bank statements, but the bank account couldn’t be accessed because there was no financial power of attorney. So no one could apply for Medicaid on behalf of my client.


It may be helpful to speak with a trusted professional who can help you navigate the process in a practical manner. It is very important to be proactive rather than reactive. The longer you wait, the fewer options you will have. Don’t allow yourself to be forced into a less than desirable situation. 


Next article: Protect parents from scams

First article: Financial Caregiving in the age of Coronavirus

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