Is a loved one having trouble managing their money because of health problems or memory issues? Or are you planning ahead in case you need help in the future? Knowing your options will help you choose what works best for your situation. An informal caregiver helps on an as-needed basis. If you need more than occasional help, it might be time to name a formal caregiver.
Types of Informal Financial Caregivers
||What is this?
||How does this work?
||This allows you to give a trusted relative, friend, or professional an overview of your finances (even if you don’t want to share all the details).
||Ask your credit union to send a copy of your statements to your daughter or accountant.
Ask a trusted friend or relative to join when you visit your credit union.
|Trusted contact person
||You may be able to add a “trusted contact person” to your credit union accounts, bank accounts, or brokerage accounts. It allows your financial institution to contact the trusted person in certain circumstances, like if they believe you’re experiencing fraud, a health crisis, or another emergency that affects your financial affairs.
||Trusted contacts don’t have access to your money—they get notified if the financial institution sees signs of financial exploitation.
||A “convenience account” or “agency account” lets you name someone to help you deposit or withdraw money and write checks.
A convenience account is not the same as a joint account, where money is jointly owned, and the joint account holder automatically gets the money when you die.
|A convenience account does not change the ownership of the money in the account or give your helper the right to keep the money when you die. The money belongs only to you.
Speak to your credit union, broker, or banker to see what informal caregiving options are available.
Types of Formal Financial Caregivers
||What is this?
|Power of attorney
||This is a legal document that gives someone else legal authority to make decisions about your money or property. People often make power of attorney agreements so that someone else can handle their money if they can no longer manage their own finances. There are different types:
- A durable power of attorney becomes effective upon signing.
- A springing power of attorney allows you to manage your own finances as long as you have the ability to make sound decisions.
- A health care power of attorney gives authority to make health care decisions.
||A court can name a guardian or conservator to manage your money and property if the court decides that you can’t manage your money by yourself— and you don’t have a power of attorney in place. A court can name different people to make financial decisions and health care decisions or give both roles to the same guardian.
||A trustee makes decisions about money or property in a trust. The trustee can manage only money or property in the trust, not any of your other assets.
A legal document called a revocable living trust gives the trustee authority to make decisions about money or property in the trust if you can’t make decisions yourself. The trust also specifies who gets the money or property in the trust after you die.
|VA fiduciary or SSA representative payee
||The Department of Veterans Affairs (VA) or the Social Security Administration (SSA) may appoint someone to manage VA or SSA benefits for someone who cannot manage their own benefits. That person is allowed to manage only benefits from the agency that names them. To manage other property or benefits, they’ll need one of the other formal financial caregiving arrangements.
Choosing a Financial Caregiver
- If you don’t have someone you feel comfortable asking to help you, there are money management programs that can help. To find help in your area, contact the Eldercare Locator eldercare.acl.gov (opens new window)
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- Once you find the right person, consider choosing a back-up financial caregiver or “successor fiduciary.” This is someone who can manage your finances if your first choice is no longer able to do so. For example, you might list your spouse as primary financial caregiver and a child as a back-up. This is different from co-agents who manage the money together and consult on decisions.
- Review who you chose every so often. Sometimes relationships change. If someone is not doing a good job as a financial caregiver and you no longer trust them, you may need to update your legal agreement to choose someone else instead.
For Credit Unions