Financial Power of Attorney
In this capacity we become your legal agent with powers and authorities that you delegate to us. The power of attorney (POA) document is drafted by your attorney for approval by both parties. Generally, poa's typically authorize their agents to buy and sell property, manage investments, manage bank accounts, pay bills, collect monies owed, manage legal affairs, file income tax returns, etc. The POA can become effective immediately, or upon the incapacity of the person (principal) delegating the authority. Most POA's are "durable", meaning they remain in effect while the principal is incapacitated. The Power of Attorney is revocable at any time by the principal, and automatically terminates upon the death of the principal.
In practice, a power of attorney is much less restrictive than, for example, a conservatorship. The principal is not giving up any rights, and may be easily revoked. They are typically used to provide the agent with the authority needed to manage day-to-day finances, or for special projects, such as selling real or personal property.
Conservatorships
Conservators are appointed when someone (the "protected person") is ruled by a court to be incapable of managing some or all of his/her financial affairs. Conservators are engaged when the protected person and/or family petition a court for the appointment of a conservator. When we are appointed as conservator we take immediate control of all financial assets of the protected person to safeguard them from loss or exploitation.
As conservator, I “walk in the shoes” of the protected person and manage his/her financial affairs strictly for his/her benefit. Conservators are responsible for day-to-day management of the protected person’s finances. This includes bill paying, insurance claims, bank account reconciliation, selling personal property, filing tax returns, etc.
If the protected person has assets greater than those needed short term, the conservator may invest surplus funds in safe investments. We are governed by the “Prudent Investor Rule” which means we must consider all investments within the context of the protected person’s total investment portfolio, associated risk, expected return, age of protected person, tax consequences, liquidity, and other factors. In this practice, we typically work closely with out client’s existing financial advisors (where available), as well as numerous other financial advisors we know that have a strong background in working in similar situations and have unquestionable ethics.
In some cases, where financial exploitation of the protected person is suspected, we will work diligently to recover funds and other assets that may have been stolen or taken under false pretenses. As conservators we have the authority to petition probate courts to require the perpetrators of this exploitation to explain their actions in court. If this doesn’t solve the problem, we can resort to civil action and/or report what we know to Adult Protective Services and law enforcement for possible criminal charges.
Conservators have several reporting requirements imposed upon them by the courts when they are appointed. This is to assure that the protected person’s assets and income are protected and used for their benefit. Within 90 days of appointment, we must file an inventory of assets and liabilities with the court that appointed us. We must also file a financial plan, which provides budgets of anticipated expenditures and income. Finally, we must also file periodic (at least annually) progress reports in which we compare actual expenditures and income to projections, and explain any deviations thereof.
I believe the best way to assure family members and friends that I am working in the best interests of their loved ones is to openly report upon my activities with those authorized to know. On a monthly basis I provide accounting reports that show the income and expenditures of all accounts that I manage, as well as detailed time sheets for my own billings. I’m always available to discuss any issues you may have regarding any family member that I am conservator for.
Personal Representative
We serve as personal representative to settle the estates when someone dies and there is no other family member or friend available to perform this task. (In some states the term for personal representative is “executor”, but it means the same thing). Regardless if there are family members available or not, it may be advantageous to consider hiring a professional to settle an estate. This can be a lot of work, often coming at a time of great personal sorrow and stress. A professional can handle the details and allow you to grieve for your loved one without worrying about the hassles involved in paying final medical bills, selling the family home, etc. Further, if you are named personal representative in someone’s will, and you are a beneficiary of the estate, you may find yourself in an uncomfortable situation, particularly when there is disagreement among family members. If you have been named personal representative in someone’s will, and have any doubts about your ability to serve in this capacity, contact an elder law or estate planning attorney before filing the will for probate. You can renounce your appointment and recommend another person to serve.
There are many duties associated with this position. First and foremost you must gain control of the deceased person’s estate and financial affairs as soon as possible. This means taking control over bank and investment accounts that aren’t owned in joint tenancy with someone else, changing locks on homes, canceling credit cards, etc. You must send notice of your appointment to all know beneficiaries and creditors, as well as publish a legal notice of the person’s death and your appointment. You must “open” the estate with the probate court (your attorney will help you with this). You must set up an estate accounting system that doesn’t commingle your personal funds with that of the deceased person’s. You must prepare an inventory of assets and liabilities to be filed with court. You must pay valid debts of the estate, according to priority as set by Colorado law.You must file the deceased person’s final tax return and pay income and estate taxes where applicable. You must sell real and personal property, unless otherwise specified in the will. Finally you must distribute any remaining assets to named beneficiaries or according to state law, and close the estate with the courts. Ask yourself, is this something you really want to do? Are you capable of doing these tasks? How will other family members judge you for your actions? If you have any doubts, we can help you!