Top tips to take care of elderly finances
There could be a multitude of reasons why someone wants you to step in and help with their finances.It could be anything from help with budgeting for everyday expenses such as bills and shopping and other paperwork, to more serious matters like arranging for a permanent power of attorney.
Your elderly relative could have a disability, which prevents them from getting out and about. Or you might be called on to manage someone else’s financial affairs because they no longer have the mental capacity to do it themselves.
Your help can provide peace of mind for someone for whom management of money is becoming a burden.
Helping provide informal support
If you are helping out with someone who has long-term care needs, you will need to have a plan in place to help look after their money and how it is spent.
This might mean helping them with their care plan, and making sure they have money to spend on the hobbies and activities they enjoy.
In some cases, a local authority may award money directly to a person who needs care. They might manage this themselves, or they may ask others to manage their care budget for them.
Paying for a person’s care and support services with money received directly from the local council can mean independence, choice and control, but there are also downsides to managing a care budget.
It may mean managing various people employed to do particular tasks, and it can also mean a lot of paperwork and other associated administration.
See our advice on Direct Payments explained
Providing more formal help
If you are stepping in and officially taking over the management of someone’s money, it is a big step for both of you.
Managing someone’s financial future is a big responsibility, and it is also a significant change for someone to entrust you with their financial affairs.
Power of attorney is a legal arrangement that gives someone else the power to make decisions for you.
Some powers of attorney are designed to last indefinitely. But you can set up an arrangement called an ‘ordinary power of attorney’.
This is designed to be used – often for a specific, short period or for a specific task – when you’re able to make your own decisions but it’s more convenient to ask someone else to take over.
Read our guide: Setting up a power of attorney
Thinking about longer-term financial plans
If a person or a relative you know is likely to become less capable of managing their affairs, for example because of a progressive medical condition – or they may simply want to plan ahead – it may be worth them considering a permanent power of attorney.
Either way, a legal arrangement can be set up that gives someone else the right to make decisions about finances on their behalf.
Setting up the power of attorney doesn’t take control away from an individual.
It can’t be used until it’s been formally registered. It doesn’t have to be registered straight away – you can set up the power of attorney now and only register it when it’s going to be needed.
If you have power of attorney over a person’s financial affairs, you must act in their best interests after it is set up.
All information accurate as of 23/05/2014
This article is provided by the Money Advice Service.
