Tips for Managing Money for an Incapacitated Loved One

Choosing a decision-maker before anything happens is crucial. So is getting legal documents and financial planning in order.

A father puts his hand on his son's shoulder as they talk while drinking coffee on the sofa.
(Image credit: Getty Images)

As we grow older, there is a chance that we might be put in a fiduciary role for our loved ones. Just like caregiving, this role comes from a place of deep love for and trust from the incapacitated loved one and comes with great responsibility. Family dynamics can make playing this role extremely challenging, so to set yourself up for success, it’s important to have financial conversations sooner rather than later. If you find yourself and your family in this position with changing healthcare needs, everyone must know who the decision-maker is.

I often ask my senior clients, “Who do you think is responsible for financial decisions if you can’t make them?” This approach regularly gives me insights into a family’s ability to transition decision-making to a successor smoothly. And it usually gives me a better answer than asking, “Who is named on your power of attorney or trust?” because my clients often reflect on the family dynamics associated with these changes. People don’t necessarily associate the legal role with the moral decisions and time-consuming tasks that are also being asked.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Thomas C. West, CLU®, ChFC®, AIF®
Senior Partner, Signature Estate & Investment Advisors

Financial adviser Tom West, CLU®, ChFC®, AIF®, founded Lifecare Affordability Plan (LCAP) to address a critical need for actionable planning that integrates finances, healthcare and senior housing. Tom has nearly 30 years of experience guiding families through financial and healthcare decisions. By bridging the gap between finance and healthcare, LCAP’s experienced team works with individuals and financial advisers to provide families with a financial strategy that meets changing healthcare needs while preserving the caregiver’s quality of life.