Older people continue to be concerned about management of their assets and property. However, they may be unable to participate because of illness, confusion or loss of memory. It is important to involve them whenever possible.

Compiling an Inventory:

Develop an inventory which lists all assets and liabilities of the older person. The following items should be included: bank accounts, pass books, certificates of deposit, money market funds, stocks, bonds, precious metals, jewelry, real estate deeds, promissory notes, contracts, insurance policies, safety deposit boxes (including location of the key), and retirement or pension benefits. Location of the records for each asset and liability also should be included. Other important documents, such as birth and marriage certificates, social security numbers, divorce decrees and property settlements, income tax returns (state and federal), death certificate of spouse (if any), and wills (including the attorney's name and executor) or trust agreements, should be listed and the locations designated. If able, the older person should compile the list. If unable, a family member, attorney, banker, accountant or certified financial planner can help compile the inventory which should be copied and kept in a safe, obvious place, possibly with a relative or friend. It is important that the document be updated every year.

Managing a Will and Financial Affairs:

An objective of financial and estate planning for older people is to plan for the orderly distribution of the estate upon their death, according to their desires. Consequently, it is important for people to have a will drafted, which incorporates the above inventory and states how property is to be disposed of upon death. Everyone over the age of 18 should have a will or a similar legal document.

If a person does not have a will, an attorney should be consulted immediately. Proper planning is essential and powers of attorney or trust agreements should be executed while a person is still competent. Otherwise, transfer of responsibility for management of the person's financial affairs to someone else must be completed through a court action, and costs spent in clearing up Probate problems come directly out of the person's assets, diluting whatever estate is left after death.

Remember, as caregivers concerned about the financial affairs of a care-receiver, you should not get directly involved without legal authority. Acting without clear legal authority, even with the best intentions, can cause serious problems.

The legal mechanisms available for surrogate decision making are: durable power of attorney (DPA), probate conservatorship, durable power of attorney for health care (DPAHC), and (California only -- check to determine if your State has comparable laws.)

Durable Power of Attorney is a written legal document giving someone other that the Principal the authority to handle the Principal's financial decisions. It must be signed by the Principal while the Principal is still legally competent. The DPA is valid without time limit until the Principal either revokes the DPA or dies, or the court revokes the DPA due to mismanagement. The preferences of the Principal regarding the management of assets can be specified. This power to manage assets can be transferred immediately or can be designated to go into effect when it is determined that the Principal has become mentally incapacitated. Financial decisions made by an individual given DPA by the Principal are binding on the Principal and his/her successors, so caregiver and care-receiver are urged to seek the advice of an attorney.

Probate Conservatorship or Conservatorship of Estate allows for the management of the Principal's money and other property when the Principal presently lacks the capacity to either decide or appoint another to decide financial decisions in his/her behalf. Court proceedings to designate a conservator are required. This is a difficult and extreme procedure but may be necessary if the care-receiver is already incapacitated to the extent that he/she is unable to manage personal financial affairs.

Durable Power of Attorney for Health Care (DPAHC):

is a written document which must be signed by the Principal while he/she still has the capacity to make decisions. The DPAHC gives someone other than the Principal authority to make medical treatment and health care decisions on behalf of the Principal for up to the maximum of seven years after the document is signed. It allows one to specify ahead of time how he/she wishes these decisions to be made. Wishes regarding extraordinary supportive care, including breathing machines and tube feeding, can be addressed in the Durable Power of Attorney. All adults should have a Durable Power of Attorney for Health Care.

Selecting an Attorney:

It is important to select an attorney who is knowledgeable in the areas needed (estate planning, will drafting, probate or conservatorship). Ask friends or other professionals for recommendations, or contact a Lawyer Referral Service, County Bar Association, or Senior Citizens Legal Services. Before agreeing upon a particular attorney, ask if he/she has previously done what you require.