Financial caregivers play a major role in ensuring that their loved ones maintain the best quality of life possible and that all financial matters, from routine to complex, are managed wisely. In recognition of Older Americans Month in May, we’re sharing some tips for financial caregivers to help you better understand and execute your role.

1. Learn the rights and restrictions that apply to your role.
Financial caregivers, such as those with power of attorney, trustees and federal benefits fiduciaries, are fiduciaries with a duty to act and make decisions on their loved one’s behalf. (A fiduciary is responsible for managing financial assets wisely for a beneficiary.) Learn the legal responsibilities of your assigned authority in order to better execute your role.

2. Manage money and other assets wisely.
Financial caregivers may be in charge of daily, unexpected and future expenses their loved one incurs. Especially if the beneficiary has a fixed income or limited finances, it is extremely important that caregivers minimize unnecessary costs and budget to ensure that all money is properly allocated.

3. Recognize danger signs.
Seniors have become major targets for financial abuse and fraud. Stay alert to signs of scams or identity theft that may put your loved one’s assets in peril.

4. Keep careful records.
When acting as a financial agent, proper documentation is not only encouraged but required. Make sure you keep well-organized financial records, including up-to-date lists of assets and debts and a detailed record of all financial transactions.

5. Stay informed.
Monitor changes in the financial status of the beneficiary and take appropriate action as needed. Also, be sure to stay up to date on changes in the laws affecting seniors.

6. Seek professional advice.
Consult a banker or other professional advisors when you’re not sure what to do.

Roles and responsibilities of financial caregivers are outlined below.

Power of Attorney (POA)
POA is designated by your loved one and gives you the authority to act and make decisions on his or her behalf, including managing and having access to bank and other financial accounts. Authority continues if the loved one becomes incapacitated and ends when power is revoked or the loved one dies.

Trustee
As a trustee your authority applies only to the property noted in the trust, authorizing you to protect, manage and distribute the trust’s assets as directed in the trust document. Authority continues after the death of the trust creator or grantor.

Federal Benefits Fiduciary
As we mentioned previously, a fiduciary is responsible for managing financial assets wisely for a beneficiary. A federal benefits fiduciary is appointed to accept and delegate federal government benefit payments, such as Social Security and Veterans Affairs (VA) benefits, in the beneficiary’s best interest. Funds for the beneficiary are received through an account set up solely for this purpose. As a representative payee for Social Security benefits or a VA fiduciary for VA benefits, you are required to keep detailed records of all transactions related to the beneficiary and file annual reports detailing how benefits were used.

To learn more about your role as a financial caregiver, visit caregiveraction.org. For tips and additional resources on Older Americans Month and safe banking practices for seniors, visit aba.com/seniors.