When a parent becomes unable to manage his/her affairs due to age or poor health, a responsible adult-age child may opt to handle matters. In order to allow the child to more easily legally act on behalf of the parent, permission in the form of power of attorney helps matters. Unfortunately, other members of the family may try reverse the power of attorney agreement, a process that can be done in family court. One way to argue the power of attorney is invalid would be to claim the child/representative is excessively profiting from the situation. Being careful enough to document that the parent's affairs are not being managed "for profit" could stall any legal attempts in family court to overrule the agreement.
Managing the affairs of a parent might cost time and money. The person bestowed power of attorney is allowed to be compensated, but those allowances are very narrow. Under the law of most states, a person appointed power of attorney must not "profit even incidentally....except for a reasonable fee authorized by the principal." Making sure that there are no dubious questions about compensation closes a door on that particular avenue of contesting.
Devise a Contract with an Attorney
Verbal agreements might be fine between the parent and the child, but there is an inherent lack of proper documentation. Perhaps a better strategy is to devise an actual legal, binding document that details the actual compensation between the parent and child. Through clearly spelling out the details of the compensation, it becomes clear on paper whether or not the fee is reasonable. As long as the child stays within the boundaries of the payments specified in the contract, claims that the parent was taken advantage of will not carry much weight.
Suggested Compensation Approaches
Rather than receive monetary payments, diverting some of the principal's funds to cover certain bills of representative might eliminate the air of profiting excessively. For example, the contract could detail requirements to pay car insurance, internet, and mobile phone fees for the year. These three items often do overlap with helping to manage the affairs of the parent.
Maintain Proper Banking Records
All deposits and withdrawals of the parent's financial accounts should be clearly and accurately documented. Copies should be given to an attorney to keep on files. Claims of improper compensation are easily refuted when accounting records show money has never been appropriated for anything unnecessary or unseemly.
Contact a legal office like Slayton Law to learn more.