Don't be left in limbo, plan ahead for financial caregivers

According to the Federal Reserve Board, more than half of Americans over 70 do not have a power of attorney. This document, which is set up to handle a person's financial affairs, is a key to providing protection in the event of incapacity. People of all ages should consider setting up a power of attorney to assign a financial caregiver in case of an emergency. More than 90 million Americans care for a loved one living with a disability, disease or experiencing reduced financial capability as a result of aging, according to the Caregiver Action Network. Financial caregivers, those with a power of attorney, play an important role in ensuring that all finances are managed wisely.

Start with a basic will

Start by having a basic will set up. An updated will revokes any older wills. Sometimes people do not know or remember that they have an outdated will, so it's important to make sure you are periodically revisiting your will, along with all stipulations regarding caregiving and powers of attorney.

Know the various powers of attorneys

Did you know that you can assign multiple caregivers to manage various parts of your financial assets? Your power of attorney gives the authority for someone to act and make decisions on your behalf, including managing and having access to your bank and other financial accounts. This authority continues if you become incapacitated and ends when the power is revoked or upon your death. If you choose to assign certain family members to handle certain aspects of your affairs, then you need to designate those roles.

Be sure to assign a health care power of attorney, which names someone to handle your health care decisions in the event you are incapacitated. That person also has the power to deal with your remains. Property power of attorney is someone who can pay taxes on your holdings and manage your real estate.

Keep current records

If you've ever followed a bank teller's orders to add a name onto your accounts, you've unwittingly allowed him or her to become your estate planner! By dutifully following the direction of the bank teller, you have given another person the right to grab your funds during your lifetime or at your death.

Here's another scenario: Let's say your mother remarries after your father's death, and names her new husband as a joint tenant on her checking account. Your new stepfather now has legal right to all of the monies in your mother's checking account. In the event of her death, your stepfather would be the only authorized holder of funds. Check and update titling and beneficiary designations regularly to ensure that your loved ones receive the funds they are entitled to upon your death.

Recognize danger signs

Seniors are often targets for financial abuse and fraud. Make sure to stay alert to signs of scams or identity theft that may put your loved one's assets in peril.

As a caregiver, you can monitor accounts. Ask for information about questionable charges and do not let the account holder make drastic changes without investigating the situation thoroughly. If another family member is pressuring their loved one for large amounts of money, a caregiver can step in and alert the bank.

Ask your banker about their own processes to safeguard accounts. Banks will often have their own forms which they use to establish powers of attorney. You should consider using their forms and/or establishing a payable on death account.

Get professional help

Many online websites offer estate-planning services. While they may offer shortcuts or convenience, an experienced professional can ensure that your intended wishes are recognized by law in the event of death or illness.

• Dean Hedeker is owner and principal of Hedeker Wealth in Lincolnshire. He can be reached at info@hedekerwealth.com.