Guide to Managing Someone Else’s Money

This column first appeared in the San Antonio Express News and in other Hearst Newspapers on August 26, 2019.




Dear Mr. Premack: I have appointed my oldest son as agent using a Durable Power of Attorney form I got on the internet. I want to be sure he understands his responsibilities if he has to manage my money and pay my bills when I become ill. Are there any guidelines that an agent should follow? – FH


First and foremost, the actual Durable Power of Attorney document must follow the statutory requirements, must delegate proper authority, must consider the timing of when the agent may act, and a host of other issues must be addressed. These documents are too important and so far-reaching that you should never rely on a form you download from the internet. You should always work with an experienced Elder Law Attorney to give you proper advice and to draft for you a legally and situationaly appropriate document.


Once you do have a proper Durable Power of Attorney, you should share with your selected agent (and with the selected successor agents) a variety of information. For instance:


A) When does the agent’s power commence? Depending on the terms of the document, it can commence immediately or be postponed until you become disabled at a future date.


B) If it is postponed, how does the agent prove that you have become disabled? Again, the document should address the issue and provide an answer.


C) What is the extent of the agent’s authority? The document should be clear. Can the agent handle your taxes with the IRS? Can the agent give gifts on your behalf, and to what extent? Can the agent set up a trust for your benefit? Can the agent change your beneficiary designations? Can the agent care for your pets? Can the agent talk with your lawyer or accountant? Can the agent pay your bills? Can the agent move your accounts to a different bank? Etc.


D) When does the agent’s authority end? Unless the document sets an earlier date, it ends when you revoke it, when you die, when a guardian is appointed for you, or when you divorce (if your agent is your spouse). Your agent should know these limits.


E) How must the agent report to you, and what do you expect the agent to do for you? Do you want immediate assistance from the agent, or are you signing everything for yourself? If your agent handles a transaction for you, when and how must the agent report the details to you?


F) Does the agent know how to avoid personal exposure? If the agent signs a contract for you by signing his/her own name, the contract may be performable by the agent personally. Legally, this means that the cost of the services being provided can be collected out of the agent’s pocket. The agent does not want that to happen. Does the agent know how to properly sign a contract to avoid liability?


Your agent should become educated about the law and fiduciary duties. There are good guidelines out there. Your attorney should provide some guidance in writing at the time the Durable Power of Attorney is written. The agent can also follow the guides provided by the federal Consumer Financial Protection Bureau at --


https://www.consumerfinance.gov/consumer-tools/managing-someone-elses-money/power-attorney-guides/.


Texas Appleseed (a nonprofit public interest justice center in Austin) has put a Texas law focus on that guide, and made it available for free at --


http://www.protecttheirmoneytx.org/guide/help-agents-under-power-attorney.



Paul Premack is a San Antonio Certified Elder Law Attorney, handling wills and trusts, probate, and business entity issues. View past legal columns or submit free questions on legal issues via www.Premack.com.

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Paul Premack, 2019-2020 President of the Texas Chapter of the National Academy of Elder Law Attorneys (NAELA) is *Certified as an Elder Law Attorney ( CELA ) by the National Elder Law Foundation as accredited by the Texas Board of Legal Specialization and the ABA. He is licensed to practice law in Texas and in Washington State, and handles San Antonio Probate and Bexar County Probate, Wills, Living Trusts, Estate Planning, and writes the legal column for the San Antonio Express News.

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