If a parent, spouse or friend has named you as their agent under a power of attorney, you just took on a legal job with real penalties attached. The Consumer Financial Protection Bureau (CFPB) publishes a free guide, “Managing someone else’s money: Help for agents under a power of attorney,” written for family members who never expected to do this. This post turns that guide into a practical walkthrough you can follow at the kitchen table.
One note before we start: this is general consumer information, not legal advice. State laws differ, and the CFPB itself says you may have additional duties, so a lawyer should answer any question about your specific document.
What a power of attorney actually makes you
A power of attorney is a legal document. The person who signs it is called the principal, and the person they name is the agent (some states say “attorney-in-fact”). The CFPB’s guide uses a made-up principal named Martina, and we will borrow her here.
The key idea is that the moment you act for Martina, you are a fiduciary: someone named to manage money or property for another person. The guide is blunt about why that matters. It does not matter whether the amount is large or small, or whether you are family. If you fall short, you could be removed, sued or required to repay money, and in serious cases the police could investigate. The guide’s shortest summary is a good one to tape to the fridge: “It’s not your money!”
Some basics the guide confirms:
- Martina can still manage her own money after signing, as long as she is able to make decisions.
- She can revoke your authority at any time while she is able to make decisions. If she does, you must stop acting for her.
- Your authority ends when she dies. Tell her bank and any other business you dealt with promptly, and do not pay her remaining bills on your own authority, even if you can afford to.
- Divorce or legal separation can end an agent’s authority if you are Martina’s spouse, and a court appointing a guardian of property or conservator can end it too. Your document and state law decide.
Which kind of fiduciary are you?
An agent under a power of attorney is only one of four fiduciary roles the CFPB covers. Mixing them up is a common source of trouble, because the rules and the paperwork differ.
| Role | Who names you | What you manage |
|---|---|---|
| Agent under a power of attorney | The person themselves, in a signed document | Money and property, as the document allows |
| Court-appointed guardian or conservator | A court | Money and property of someone who needs help |
| Trustee of a revocable living trust | The person who created the trust | Assets held in the trust |
| Government fiduciary (representative payee, VA fiduciary) | A government agency | Government benefit payments such as Social Security or VA checks |
That last row catches many families off guard. The CFPB states that an agent cannot manage Martina’s Social Security or VA benefits unless the government agency separately appoints you as a representative payee or VA fiduciary. Having a power of attorney is not enough.
The four duties, in plain English
Duty 1: Act only in her best interest
- Read the document and do what it says. Your authority is limited to what the document and state law allow, even if you have good intentions about doing something else.
- Find out when it takes effect. Some take effect right away; others only once Martina can no longer decide for herself.
- Involve her as much as possible. If she cannot tell you what she wants, look at her past decisions and ask people who know her what she would have wanted.
- Avoid conflicts of interest, or even the appearance of one. The guide’s examples: using her money to buy a car you mostly drive for your own errands, or hiring your son for a repair job and paying him from her funds.
- Do not borrow from her, lend her money, or give it away to yourself or others, even if the document seems to allow gifts. Gifts can complicate her taxes or change her plans for what happens to her property after she dies.
- Do not pay yourself for your time unless the document or state law allows it. If it does, the fee must be reasonable and carefully documented.
Duty 2: Manage her money and property carefully
The CFPB says you must be even more careful with her money than you would be with your own. Start by listing everything she owns and owes: checking and savings accounts, cash, pensions and other income, real estate, vehicles, insurance policies, stocks and bonds, valuables, credit card balances and loans. Then protect it. Review statements promptly, make sure her property is insured, pay bills and taxes on time, cancel insurance she does not need, and look for accounts with low or no fees that earn interest where possible. If you make investment decisions, the guide says to talk to a financial professional.
Duty 3: Keep her money separate from yours
- Never deposit her money into your own account or anyone else’s.
- Get legal advice before changing a joint account she already holds with you or someone else.
- Keep titles in her name.
- Sign as her agent. The guide’s example is “Juan Doe, as agent for Martina Roe,” never just “Martina Roe.”
- Pay her expenses from her funds. If you must use your own money, keep receipts and a record of why, what and when you paid yourself back.
Duty 4: Keep good records
Write down everything you receive or spend for her, including dates, amounts, reasons and who was involved. Keep receipts and notes even for small items. The guide suggests writing something like “$50, groceries, ABC Grocery Store, May 2” soon after you spend the money. Avoid paying in cash, ATM withdrawals and checks written to “Cash.” Someone else may be entitled to review your records, and the guide suggests letting another family member or friend see them as a precaution unless the document or state law says otherwise.
A sample month of records
The CFPB does not publish a spreadsheet template, so the table below is our own illustration of the level of detail its recordkeeping advice describes. All names and amounts are invented for the example.
| Date | Item | Paid to or from | Amount | Paid from | Receipt kept |
|---|---|---|---|---|---|
| May 1 | Pension deposit | Received | +$1,850.00 | Martina’s checking | Bank statement |
| May 2 | Groceries | ABC Grocery Store | -$50.00 | Martina’s debit card | Yes |
| May 5 | Electric bill | City Power | -$92.40 | Martina’s checking | Yes |
| May 9 | Pharmacy copay | Main Street Pharmacy | -$18.00 | Martina’s debit card | Yes |
| May 15 | Home insurance premium | Example Insurance Co. | -$140.00 | Martina’s checking | Yes |
| May 20 | Paid out of my own pocket, repaid May 22 | Dr. office | -$35.00 | My card, then reimbursed | Yes, plus a note explaining why |
Simple math on that sample: income of $1,850.00 minus expenses of $335.40 leaves $1,514.60 added to the balance. Everything is traceable in one place, and the one time your own money was used is documented with a reason. That is exactly the habit the CFPB is asking for.
Situations that trip up new agents
- The bank will not accept the document. The guide says to give copies to the banks and businesses she deals with as soon as you need to act, never hand over the original, and ask for certified copies. If someone refuses, talk to a supervisor, then a lawyer. State law may require them to accept it.
- Your siblings disagree with you. Sharing summaries of how you spent her money can head off suspicion, unless Martina said not to. You still make the final call. If you are stuck, the guide points to a family counselor or mediator.
- There is a co-agent. Your document or state law says whether you can act alone or must agree. You must still coordinate and share information, and you cannot let a co-agent do something that harms her.
- You cannot keep serving. Tell a trusted family member or a government agency such as adult protective services. She will need someone else to help.
- Medicaid might come up. The guide calls it complicated and says to get legal advice before any decision that could affect her eligibility.
- You need professionals. You can pay lawyers, accountants and advisors from her money. Check their licenses and complaint history, interview them, and read contracts before signing.
Common mistakes the guide warns against
- Putting her money in your account “for convenience.”
- Signing her name instead of signing as her agent.
- Paying yourself without a clear right to do so or without records.
- Making gifts that change her plans for her property or add to her tax bill.
- Assuming a power of attorney lets you handle her Social Security or VA checks.
- Paying cash with no receipt.
Warning signs of exploitation and scams
The CFPB asks agents to learn the signs of financial exploitation, partly to protect Martina and partly to protect themselves from claims. Watch for missing money or property, large unexplained withdrawals or wire attempts, bills that suddenly go unpaid, unfamiliar names added to accounts, new gifts or beneficiary changes, statements that stop arriving, or a caregiver or friend who suddenly starts handling her money. Also watch for fear of a relative or caregiver, or someone keeping her from visitors and phone calls.
If she is in immediate danger, call 911. Otherwise the guide lists local adult protective services, the police or sheriff, her bank or credit card company, the state attorney general and, for nursing home residents, the long-term care ombudsman. You may be required by law to report. Adult protective services and the ombudsman can be found through the Eldercare Locator at 1-800-677-1116.
For everyday scams, the guide suggests registering her number on the National Do Not Call Registry (donotcall.gov or 1-888-382-1222), never sharing account or Social Security numbers unless you know who is asking and why, and treating any pressure to pay quickly by wire or courier, or any fee required to collect a “prize,” as a red flag. The guide’s table of common scams includes relative-in-need calls, fake charities, lottery and sweepstakes offers, home improvement fraud, free-lunch investment seminars, fake government help and fake Medicare drug plan offers.
Frequently asked questions
Can I use the power of attorney to manage my parent’s Social Security check?
Not by itself. The CFPB says an agent cannot manage Social Security or VA benefits unless the government agency separately appoints you, for example as a representative payee or VA fiduciary. Contact the agency for its process.
Am I allowed to pay myself for the time I spend?
Only if the power of attorney or state law allows it. If it does, the fee has to be reasonable and you need detailed records of the work, the time and the dates.
Should I put my parent’s money into my account to make bill-paying easier?
No. The guide says never to deposit her money into your own or anyone else’s account. Keep her funds in accounts titled in her name and pay her expenses from them.
What happens to my authority when she dies?
It ends. Notify her bank and the other businesses you dealt with promptly, and stop paying her bills under the document. Estate matters after death are a job for a lawyer or the executor, not the agent role.
Where to go next
The full CFPB guide is free, and the agency also offers separate booklets for guardians, trustees and government fiduciaries, plus a guide for people planning ahead and choosing a financial caregiver. The CFPB page linked in the button above has all of them. For benefits you may be able to help your loved one claim, the guide also points to the National Council on Aging’s BenefitsCheckUp.org, and to your local Area Agency on Aging through the Eldercare Locator.