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How Can I Stop My Loved One From Writing Checks?

We frequently receive questions regarding children trying to help when their parents going starting with dementia or Alzheimer's.  The question is frequently something like:

I have durable power of attorney for my mother, but she keeps writing checks and making poor financial decisions when I’m not around. What do I do?

We have seen situations like this many times - Mom or Dad is getting forfetful, some type of dementia, and is not spending her money well. He or she may be writing checks to charities, scammers, needy family members, etc.

So, while durable powers of attorney are an important part of a well-rounded estate planning, they do have one major shortcoming: A durable power of attorney appoints an agent to act on behalf of the Principal (e.g., Mom or Dad), but it does NOT stop the Principal from still conducting business on his or her own. We frequently say that a durable power of attorney is a delegation of your rights, but it does not actually take away your rights.

The big picture is that a durable power of attorney is not really enough to stop someone with dementia from being taken advantage of. The power of attorney cannot stop mom/dad from writing checks/paying bills.  There are some things that can help in these difficult situations:

Set Up a Revocable Living Trust

If Mom or Dad does not already have a revocable living trust, then the durable power of attorney may allow the child to set up and fund a revocable living trust in order to help Mom or Dad. Florida law says that a durable power of attorney executed after October 1, 2011, must specifically be initialled to allow the power of attorney to execute a living trust on mom/dad's behalf.  Assuming this power is available, as power of attorney, the child may be able to transfer the parent’s assets into the trust and then manage the trust as trustee. Only a trustee can conduct business on behalf of a trust, therefore, the parent would not be able to write checks or conduct financial transactions for any assets that are in the trust.

Of course, we strongly recommend that you consult with an attorney regarding this option and whether the child is legally authorized to establish a trust on your parent’s behalf.

Guardianship Proceedings

The next step may be to consider an adult guardianship proceeding. A guardianship proceeding will include an incompetency hearing. If the court finds your parent to be incompetent, the clerk of court will issue an order of such finding and will appoint a guardian to manage your parent’s affairs.  You can then give copies of the court order to all banks and financial institutions where your parent holds accounts to notify the bank or financial institution that your parent has been declared incompetent by the court and no longer has legal authority to conduct transactions on his or her own behalf. 

We typically recommend guardianships as a last resort only - if Mom/Dad is highly functioning (i.e., can go to the bank themselves and refuse to give up the car keys/check book), is not recognizing their own dementia, for instance, or if they are subject to elder exploitation.  Florida also has an elder exploitation injunction that can help people when they are being exploited.

We Can Help!

You may be struggling to help your loved one make the right decisions, hitting roadblocks, looking for Medicaid, waitlists in trying to get your loved one placed in an appropriate facility, or constantly fighting with doctors, hospitals (or even other family members) because you don’t have the necessary legal or financial authority to oversee your loved one’s affairs and/or care.

Solid legal and financial planning is your answer and can help you put an end to all of the confusion and overwhelm that you currently face.

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D. Rep DeLoach III
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Estate Planning and Board Certified Elder Law Attorney