The Consumer Financial Protection Bureau has established some guidelines for people that have suddenly found themselves in the role of managing another person’s finances. Residents of Massachusetts might not think that this an issue they’ll need to face in the near future; however, the CFPB states that there are around 22 million people over the age of 60 that have already handed over their finances to someone else. With millions of baby boomers reaching and surpassing retirement age, younger people may find themselves taking on a financial caretaker role sooner than they anticipate.

Acting ethically with the money you become responsible for seems like common sense. However, it is indeed the first guideline that the CFPB suggests. A fiduciary should refrain from loaning out another person’s money or giving any money to themselves. The fiduciary should also strive to stay current with bills and protect any unspent funds that the aging person owns. Also, it’s best to keep another person’s finances completely separate from your own. If a parent or other aging family member has trusted you with their assets, you should not combine their money with your own a joint account.

Also, be sure to carefully record all the money spent or deposited into a person’s various accounts. In order to do this, it’s best to keep all receipts and avoid using cash so that tracking deposits and withdrawals will be easier. A fiduciary must also be on the lookout for fraudulent schemes that target older people. Because senior citizens often have significant home equity or retirement savings, they can unfortunately become attractive targets for fraudsters.

Whether you’ve been named as a power of attorney, listed as a trustee in a living trust or have been appointed by a court, managing a loved one’s finances is an incredibly serious responsibility. Families in Massachusetts may want to consider helping an aging family member decide on a fiduciary as part of their long term planning. If this is done ahead of time, it might prevent some tension and confusion that can arise within a family when an older person suddenly becomes incapacitated.

Source: thonline.com, “A guide to managing someone else’s finances” Jason Alderman, Jan. 14, 2014