On November 28, 2012

Are you in control of your own finances? If you’re relatively young and in good health, the answer is probably yes. But unless you have the power to predict the future, just having a handle on your present financial life isn’t good enough. If you suddenly become incapacitated, you’ll be reliant on someone else to handle your affairs, and you may not have the ability to choose who that person is.

When people grow old to the point that they can no longer take care of themselves, their children or another family member will often step in to handle their finances. Most people assume that the new caretaker will follow the intentions of the person who needs that care, but this assumption poses some problems. First, how can the caretaker be sure of what the incapacitated person wants, especially if he or she is suffering from dementia or is unable to communicate? Second, what if the caretaker is unwilling or unable to carry out the person’s wishes?

These uncertainties can be avoided with a few simple precautions, and you don’t have to wait until you’re elderly or seriously ill to take action. Adults of any age should take the time to protect themselves and their estates from abuse or simple uncertainty, even if they don’t think they have much to protect.

A good first step is establishing a durable power of attorney. Choose a trusted family member or perhaps even a professional who you’re confident will responsibly manage your affairs for you in the event that you suddenly can’t. The person you pick should be adept at handling their own finances, not to mention honest and trustworthy; in other words, the person closest to you may not be the best person for the job.

You can, however, choose two people if their qualifications complement each other. This helps protect you from fraud, and allows one person to take responsibility if the other isn’t available. And speaking of doubling up, you might also ask your bank or other financial institution to send duplicate copies of bank statements or other documents to someone besides your power of attorney. Doing so could raise red flags sooner if there is any fraud going on in the handling of your estate.

The bottom line: To maintain control of your financial life, take steps now to protect yourself long into the future.

Source: The New York Times, “Old, Infirm and at the Center of a Legal Struggle,” Walecia Konrad, Nov. 13, 2012

• Our firm may be able to help you with your will, trust or other estate planning needs. To learn more about our practice, please visit our Colorado estate and trust administration page.

Categories: Estate Administration

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