We have seen our clients and friends need to assist older family members with their financial affairs. If you have not been asked yet, you are likely to be asked to assist in the future. To help someone in this “financial caregiver” role, the federal Consumer Financial Protection Bureau has published four guides titled “Managing Someone Else’s Money” to help guide those in this role.
Each guide is tailored to individuals in a specific role and will be a valuable resource for anyone who is in this role now or will be in the future.
The four guides cover the following:
- people named agents under a power of attorney
- those appointed by a court as a guardian or conservator
- trustees in charge of living trusts, and
- those appointed by a government agency to manage Social Security or veteran’s benefits.
Each of the guides has three purposes:
1. to walk caregivers through their duties,
2. to tell them how to watch for scams and financial exploitation (and what to do if a family member becomes a victim); and
3. to let caregivers know where they can turn for additional help.
We have been discussing each guide in separate posts over the past several weeks.
The third guide is “Help for Trustees Under a Revocable Living Trust”.
Like many people, you may never have been a trustee under a revocable living trust before. That’s why these series of pamphlets were created. This guide will help you understand what you can and cannot do in your role as a trustee. In that role, you are a fiduciary.
Here is an example of when you may find yourself in this situation:
Your family member or friend is worried that she will get sick and will not be able to pay her bills or make other decisions about her savings and her house. For the example in the pamphlet , they call her Rose. Rose has signed a legal document called a living trust.
In it, she names you as her trustee. When she set up the trust, she should have transferred ownership of some or all her money and property from her name to the name of the trust. This is an important step that is often overlooked. As her trustee, you now have the power to make decisions for Rose’s benefit about the money and property in the trust.
The law gives you a lot of responsibility. You are now a fiduciary with fiduciary duties. For this guide, a fiduciary is anyone named to manage money or property for someone else. You’ll find brief tips to help you avoid problems and also resources for finding more information. This guide is for family and friends serving as a trustee, not for professionals or organizations. The guide does not give you legal advice. State laws vary, so you may have additional or different duties. Talk to a competent Trust & Estate lawyer if you have questions about your duties.
If you want to learn about how to become a trustee, this guide is not designed for you. Talk to a lawyer or read other guides from your state bar association or others.
The first two guides which dealt with powers of attorney and court-appointed guardians of property and conservators can be found here: Power of Attorney andHelping Someone Manage Property
To download the guide, click on the green button below:
Help for Trustees Under a Revocable Living Trust
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