Is it too late for a power of attorney?

This is general information, not legal advice. Each state has its own rules and forms, and a lawyer who knows your state can tell you how they apply to your parent.

Most families put this off because it feels like admitting something. Then a bank won’t talk to them, or a hospital asks who’s in charge, and they find out that a piece of paper would have settled it. If your parent can still take part, this is the time.

Two documents, two jobs

• Durable power of attorney for finances. This names someone to make financial decisions when your parent can’t. “Durable” means it keeps working after they lose the ability to decide.
• Durable power of attorney for health care. This names a health care proxy, someone to make medical decisions if your parent can’t communicate. It’s often done along with a living will.

They can name different people. Your sister may be the right person for the doctors, and your brother the right person for the bills.

Is it too late?

The legal test is capacity. These documents must be created while the person still has the legal capacity to make decisions. State law sets the test, so a lawyer in your parent’s state is the person to ask.

What you can do is move quickly:

1. See how they are today. Can they tell you who they’d want to help and why? Do they understand what the paper does? Good days matter.
2. Call an elder law attorney this week. Say what’s going on, including any diagnosis. Ask how soon they can meet, and whether they need a doctor’s letter.
3. Let your parent make the choice. The person they name should be their pick, not the family’s. Don’t push. If they’re being pressured, or don’t understand what they’re signing, that’s a warning sign, not a shortcut.

Your parent can also change or cancel the power of attorney as long as they’re still able to make decisions. Signing one doesn’t lessen their rights.

What a power of attorney won’t do

• It doesn’t cover Social Security. The Treasury doesn’t recognize a power of attorney for federal payments. If your parent can’t manage their benefits, you must apply to Social Security to be their representative payee. Having a joint account doesn’t count either.
• It ends at death. You can’t keep paying bills from their accounts after that, even easy ones.
• It may not be accepted right away. A bank may refuse it and want your parent to sign its own form, which is a problem if they no longer can. So take a copy to the bank early, while your parent can still help. Never give away the original. State law may require the business to accept it, and a lawyer can help if it won’t.

If it really is too late

For medical decisions. Without an advance directive, state law decides who can decide. That’s typically a spouse, parents or adult children. Talk to the hospital’s social worker, and to each other.

For Social Security and VA money. You can apply to Social Security to be a representative payee. The VA has its own fiduciary program. These don’t need a court, but they only cover those benefits.

For everything else. A court can name a guardian or conservator to manage money and property, or to make personal decisions. The Justice Department says guardianship should be a last resort, because it removes the person’s legal rights. Before going to court, ask a lawyer about less restrictive options, such as supported decision-making or a court order for one specific action.

If you’re the one named

The Consumer Financial Protection Bureau publishes a free guide, Managing Someone Else’s Money. Its core duties are short:

• Act in your parent’s best interest.
• Manage their money carefully.
• Keep their money separate from yours.
• Keep good records.

Don’t borrow from their money or give it to yourself or others. Even if the document allows gifts, be very careful. Don’t pay yourself for your time unless the document or state law allows it. If your brother or sister is named with you, find out whether you can act alone or must agree.

What about a joint account?

It’s tempting, because it’s easy. But the money in a joint account may pass to the other person when your parent dies, which may not be what the will says. Ask the bank about a convenience account, which lets someone help without owning the money. It still lets that person withdraw, so choose someone you trust.

What it costs, and free help

A lawyer can draw these up, and it’s worth doing if your parent has a house, a complicated family, or a diagnosis. You can find one through a local bar association or the National Academy of Elder Law Attorneys. If money is tight, the National Institute on Aging suggests your Area Agency on Aging, state legal aid offices and state bar associations. The Eldercare Locator can find your Area Agency: 800-677-1116.

Rules differ by state, so check that any form you download meets the rules where your parent lives.

What to do this week

1. Ask your parent, gently: “If you were sick, who would you want to talk to the doctors? Who would you want to handle the bills?”
2. Find out what already exists. Ask where any will, power of attorney or advance directive is kept. Our important papers list can help.
3. Call an elder law attorney or your Area Agency on Aging.
4. Once it’s signed, make copies for the doctor, the bank and the person named, and keep the original somewhere you can find it.