If your parent hasn't executed a durable financial power of attorney and doesn't have a living trust, and they become incapacitated and unable to manage their finances, the only way you can get legal authority to act on their behalf is a conservatorship.
The easiest way officially to make decisions on behalf of someone else is to execute a durable power of attorney, which is a legal document that appoints someone to act on someone else's behalf. The forms are generally available on the web for free or a nominal fee. They require witnesses or notarization to be valid.
If you need full authority, you can become a fiduciary through a power of attorney, guardianship, conservatorship or revocable living trust. As a fiduciary, you have four main legal duties: Act in the person's best interest, manage the money with care, keep their money separate and maintain accurate records.
California Family Code Section 4400-4405 establishes that adult children have a legal duty to support their parents if the parents cannot support themselves financially. This includes providing for basic needs like food, shelter, clothing, and medical care.
California is one of 30 states with a filial responsibility law on the books. California Family Code section 4400 (“FC 4400”) states that, “Except as otherwise provided by law, an adult child shall, to the extent of the adult child's ability, support a parent who is in need and unable to self-maintain by work.”
The Family Code makes it clear both parents have an equal responsibility to support a child “of whatever age who is incapacitated from earning a living and without sufficient means.” The California Legislature has not limited the application of the state child support guidelines to minor children.
According to the IRS, adult children can use the signature authority to access an elderly parent's bank account. You can use this method to pay bills and other financial requirements for your aging parents. Your local bank can help you access the bank account with your and your parent's signatures.
Money guilt is, "I made a mistake with my money," whereas money shame is internal, "I am bad with money." This perception of money shame causes a similar shame spiral that can make it hard for us to come back from real or perceived money mistakes and further isolate us from engaging with our money in a meaningful way.
Power of attorney
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.
One major drawback of joint bank accounts is the automatic transfer of ownership upon the death of one account holder. This can bypass the deceased's will and complicate estate planning. A POA does not grant ownership; it merely allows the agent to act on behalf of the principal.
In the United States, there is generally no legal requirement for adult children to provide care for their aging parents. However, some states have "filial responsibility" laws that may impose financial responsibility on adult children under specific circumstances.
It's Illegal For Your Parents To Do This!
While sharing a joint bank account is a convenient option to assist in your parent's finances, it does present some risks, such as: Financial risks with joint accounts: With any joint account, each account holder could be impacted by the financial decisions of the other.
Visit Banks in Their Area
You will need to provide documentation to prove both that the account holder died and you have the legal authority (as a designated beneficiary, joint account holder or executor/administrator) to access the account.
Consider a power of attorney
A power of attorney is a document, signed by a competent adult, that grants another person the power to make decisions on their behalf.
Key Takeaways
There are often signs that it may be time to take control of your parent's finances, such as unusual purchases or unattended mail. To legally manage a parent's money, you'll need a power of attorney. Some parents may be secretive or resistant to the idea of their children managing their finances.
Requesting a home safety evaluation by an occupational therapist through your parent's primary care provider is a great place to start. Lastly, a medical alert system can give you peace of mind, especially if you don't live near your aging parents.
The 30 states that have filial responsibility laws are as follows: Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South ...
Yes, you read that correctly. An adult child can have a legal obligation under the Family Law Act to pay support to their parents.