A time can come in anyone's life when the ability to control finances slips away. Physical and mental incapacity can happen suddenly following the diagnosis of a major illness or a debilitating accident. In many circumstances, financial incompetence comes about slowly with advanced age or a progressively disabling disease.
Estate plans help Oklahoma City residents make arrangements so that finances are not neglected if they are unable to manage them. You, or in some cases, a court, can establish who will take care of all or a portion of assets and liabilities in your place.
Collectively, these appointed or designated individuals or parties are called fiduciaries. Their job is to make decisions on your behalf. Often, a fiduciary is a loved one rather than a professional financial or legal advisor. Mistakes or abuse of power are possible, depending upon a relative's trustworthiness and knowledge of laws and finances.
The Consumer Financial Protection Bureau recently published a series of free, online guides for "financial caregivers," intended for people that are not familiar with the responsibilities and boundaries of the fiduciary role. The obligations and rules vary, according to fiduciary designations.
Guides are available for agents assigned to care for someone else's financial duties through a durable power of attorney, as well as trustees empowered through revocable trusts. Separate information is provided for court-appointed financial guardians and representative payees, limited to managing another person's Social Security benefits.
The bureau designed the guides for instructional purposes, in light of the rapidly increasing population of older Americans from the baby boom generation. Approximately 26 million U.S. residents have already transferred financial powers to others through powers of attorney or a Social Security payee arrangement. Family members make up 85 percent of these fiduciaries.
The responsibilities of a fiduciary extend far beyond balancing an incapacitated loved one's bank statement. An estate planning attorney can help define the duties and laws that affect a financial caregiver's work.
nytimes.com, "New Guidelines Aim to Help Financial Caregivers" Ann Carrns, Oct. 30, 2013