How Adult Children Can Legally Help Aging Parents With Finances in Virginia
With age, many adult children begin participating in their parents’ day-to-day money management tasks. In cases where the elderly person has mobility concerns, forgetfulness, or health issues, bill payment, bank account management, insurance documents handling, and fraud prevention can become necessary tasks. However, not all people are aware that, without having appropriate legal authorization, participation in financial activities can lead to significant problems.
There are different legal ways in which an adult child can participate in money-related matters in Virginia.
Why legal authority matters
It’s not unusual for an elderly individual to rely on their children to manage finances informally. However, there is a possibility that banks, financial organizations, and governmental authorities will not allow communication with people who have no authority whatsoever.
Even with verbal approval from a parent for any kind of financial assistance, adult children can face difficulties in their efforts to handle matters in their relatives’ best interests.
Without adequate legal support, arguments might arise among family members about how things are done.
Financial powers of attorney
A financial power of attorney is one of the essential estate planning documents for the elderly. The document authorizes an individual, referred to as an agent, to handle financial affairs on behalf of another person.
Powers of attorney can be either general or special, depending on the senior’s requirements. Some of the activities the agent is authorized to perform include the following:
- Payment of bills
- Withdrawal from bank accounts
- Management of investments
- Real estate dealings
- Interactions with insurance firms
- Application for government assistance
Power of attorney is widely used in Virginia because it prevents the family from needing to involve the court if a parent becomes incapacitated in the future.
Risks of joint bank accounts
Families will try to make life easier by putting their kids in the same bank account as their parents. However, while this arrangement makes it easy to access the money, it also has some serious drawbacks.
Putting your children on your bank accounts can expose you to all sorts of lawsuits or even the debts of the child, while at the same time making things difficult for other brothers and sisters who might be claiming their rights in the future.
When conservatorship may be necessary
If an elderly individual lacks the ability to make sound financial decisions and has not designated a power of attorney, the family might have to file for a conservatorship through the Virginia court system.
Conservatorship is a court-appointed position that oversees the financial matters of an incapacitated person. Even though it offers significant benefits, it tends to be lengthy, public, and costly compared to planning ahead.
This is why it is advisable to plan legally in advance to avoid unnecessary issues down the road.
Talk to a Virginia Beach, VA, Estate Planning Lawyer Today
The Law Office of Angela N. Manz represents the interests of Virginia Beach residents who need to draft or revise an estate plan. Call our Virginia Beach estate planning lawyer today to schedule an appointment, and we can begin discussing your interests right away.