Managing Someone Else’s Money Under a POA

POAOne of the ways to avoid having a guardianship imposed is to have an effectively working “lesser restrictive alternative” in place.   A power of attorney is an example of a lesser restrictive alternative.  Although, it is important to note, that the power of attorney does NOT automatically mean that a guardianship will be avoided.  It can be misused or not used at all.  It can be revoked.

If there is a power of attorney in place, it is important that the person acting under the authority given by it, follow some basic rules/guidelines.  The  Consumer Financial Protection Bureau has released a guide called “Managing Someone Else’s Money: Help For Agents Under a Power of Attorney”.  It is a great resource.  It sets forth, in very basic, understandable language, what a power of attorney is, what a person’s duties are under the power of attorney, how to recognize financial exploitation, and contact information for varioius agencies that deal with exploitation.

The 4 basic duties of an agent acting under a power of attorney for a principal (the person granting the power):

  1. Act only in the Principal’s best interest.
  2. Manage the Principal’s money carefully
  3. Keep the Principal’s money and property separate from your own
  4. Keep good records

Check out this great resource for more details!

Less Restrictive Alternatives to Guardianship

The guardianship and conservatorship statutes require that the court only impose a guardianship or conservatorship if less restrictive alternatives are not available and working.  See Minn. Stat. 524.5-409(a) and  524.5-102, subdivision 6.  The rationale behind this requirement is that a guardianship takes away very basic rights of the respondent and should, therefore, only be imposed as a last resort.  If there are other options that will preserve the autonomy of the proposed ward, while still ensuring his/her safety, then those options must first be used.

So what are less restrictive alternatives that should be explored first?

  • Power of Attorney
  • Health Care Directive
  • Joint bank accounts
  • Representative payee for certain government benefitss
  • Establishing a trust
  • Involving the family in care conferences and care teams

The less restrictive alternatives that may work for one individual may not work for another.  And, of course, by the time a guardianship is being considered, it may be too late for the respondent to put some of these items in place (because for the POA or HCD or creating a trust, a certain level of capacity is required in the first instance).

If you have questions about less restrictive alternatives to guardianship or conservatorship, contact experienced Minnesota Guardianship Attorney Cindi Spence Matt of Matt Legal Services.