How do I balance my responsibilities as caregiver with the long term financial goals of the senior?

Jon Beyrer, CFP

How you manage your relative’s financial affairs can have an impact on your relative as well as on your own family and on you. Your primary responsibility is to make sure your relative’s needs are being met. This includes physical needs, health needs, safety and security, and emotional needs, any of which may involve spending money. At the same time, as a good steward of their assets, you should be making sure they are getting value for dollars spent, not wasting money on unnecessary expenses, and managing their assets in a way that enables their resources to be available for future expenses.

This responsibility goes beyond looking after your relative. If you are managing your relative’s lifetime reserve of capital, you may also be responsible for what may become the inheritance of other family members. This puts on you the burden of acting prudently and of acting in their best interest over yours. In legal terms, you have a fiduciary duty to your relative and to the heirs of any inheritance. Fiduciary duty is often looked at rather strictly by civil courts, such as if an heir sued you for inappropriately managing your relative’s finances. Despite your best intentions, a court could rule that you did not act with enough care and skill and that you are liable for civil action. In other words, ignorance is a poor defense if you are being sued.

Acting with sufficient care and skill starts with knowing your relative’s financial situation well. What obligations do they have, such as paying bills and taxes, and are these obligations being met? Who are your relative’s advisors, and what information can they offer to help you understand their situation? You also need to know what the correct actions are, what the risks are, and what the advantages and disadvantages of different alternatives are. Are you getting adequate and appropriate advice from these advisors, and do you need to employ new or different advisors to help you?

Checklist for looking out for your loved one, your family, yourself:

• Know your relative’s needs and desires. What are their preferences? Are there things they are dissatisfied with or upset about?  
• Know your relative’s financial situation well. What liabilities and obligations do they have, and are they being met? 
• Be involved in any activity they may still be doing, such as paying bills or taxes. Be sure they are meeting their obligations and not making any detrimental decisions or being taken advantage of. 
• Who are the heirs and beneficiaries? How/ to what extent will you balance your relative’s needs and objectives with those of beneficiaries?
• Be sure you understand what alternatives you have, and what the correct course of action should be in certain situations. Determine whether you need to get new or better financial legal advice
• If your relative is still dealing with advisors or working with professionals, be sure they are giving correct information and instructions to them, and that they are being given proper advice and instruction.
• Don’t put too much on yourself (and your family) if you don’t have to. Arrange for help if at all possible, so you can focus on supervising how everything is going and on your other responsibilities.

Jon P. Beyrer, EA, CFP® is the Vice President of Financial Planning at Blankinship & Foster, LLC, a Registered Investment Advisor in Solana Beach, California. Mr. Beyrer earned his Master of Science Degree in Financial and Tax Planning from San Diego State University. He is licensed to use the Certified Financial Planner and CFP® marks by the Certified Financial Planner Board of Standards, and is enrolled to practice before the Internal Revenue Service. Beyrer is a member of the Financial Planning Association and currently serves as the association's Public Relations Director. He is also a member of the La Jolla Estate Planning, Trust and Probate Section and the National Association of Personal Financial Advisors.