Adult children of elderly parents often tell me they are worried that mom or dad will become unable to manage their finances, or handle other common day to day transactions, but the parent refuses sign a durable power of attorney. Many times the parent sees this as “giving up control”. Other times it’s an irrational fear that the child will “take over” their lives. As frustrating as it can be for the child, the parent has the right to decide if and when they sign a legal document.
When this issue arises, I offer the following suggestions that can help:
Have a conversation with your parent and explain why you are worried. Tell them that just like when they had a responsibility to care for you when you were a child, that you have a responsibility to take care of them when, and if, they can’t take care of themselves and that you want to be able to do what is necessary.
Explain that “preparing for the worst” is the best way of being prepared. A durable power of attorney is a document that requires the grantor (the person naming the agent) have the ability to understand what he or she is signing, and have the ability to sign or direct someone to sign for them. Waiting until the agent (person acting for the grantor) needs to use the document is many times too late.
Waiting until it’s too late is far more expensive. If a power of attorney can’t be executed, and the parent needs someone to act on their behalf, in some cases, the only option is guardianship. Guardianships are not only expensive, but take time and can create family issues that could be avoided.
Tell you parent that this is their opportunity to have the final say about who will act for them. If a guardianship is the only option, there is no guarantee that a family guardian will be appointed, and no guarantee that the one appointed will be the one the parent would have chosen. If a professional guardian is chosen, ongoing fees will be charged, diminishing the funds available for the parent’s long term care.
Lastly, the parent can restrict the powers of the agent so they can feel assured that certain things won’t happen. For example, the parent can restrict the agent from gifting funds, changing beneficiaries on accounts, or life insurance policies, or amending a trust. With restrictions in place, the parent can feel confident that decisions they made regarding the disposition of assets will not be changed. In some case, parents don’t provide the document, but instead tell the child that it is in the hands of the attorney, or let them know the location of the document at home in the event its needed.