Palm Springs Law Blog

As loved ones age, their ability to manage financial and legal affairs may diminish, making them vulnerable to mismanagement or exploitation. For many families, ensuring their aging relatives are cared for physically and financially becomes a pressing concern. This is where fiduciary services and elder law play a crucial role.

Elder law is a specific area of legal practice that addresses the unique challenges aging individuals face, including estate planning, healthcare decisions, and financial management. On the other hand, fiduciary services provide professional oversight of financial and legal matters to protect the interests of those who can no longer manage these responsibilities on their own.

In this blog, Heritage Legal will explore how fiduciary services and elder law can safeguard aging loved ones and help families navigate the complexities of elder care.

What Are Fiduciary Services?

A fiduciary is a person or organization entrusted with managing another person’s finances, property, or affairs. Depending on the individual's specific needs, fiduciary services can include acting as a trustee, executor, financial manager, or power of attorney.

Fiduciaries are held to a high legal and ethical standard, meaning they must always act in the best interest of the person they represent, often referred to as the “beneficiary.” This role is particularly important when it comes to caring for aging individuals who may be vulnerable to financial abuse or incapable of making sound decisions due to cognitive decline or physical limitations.

Common fiduciary roles include:

• Trustees: Manage trust assets and ensure they are distributed according to the terms of the trust.

• Executors: Oversee the administration of a deceased person’s estate, paying debts, and distributing assets as outlined in a will.

• Financial Managers: Handle day-to-day financial responsibilities such as paying bills, managing investments, and overseeing property.

• Powers of Attorney: Represent individuals in financial and legal matters if they become incapacitated.

How Elder Law and Fiduciary Services Work Together

Elder law attorneys work with various legal issues affecting seniors, such as estate planning, long-term care planning, Medicaid, and guardianship. These attorneys work closely with families to ensure that aging loved ones are protected from exploitation and have the necessary legal framework in place to safeguard their assets and health.

Fiduciary services and elder law intersect when an older individual needs someone to manage their affairs but lacks the ability or family support to do so. Elder law attorneys can help establish fiduciary relationships by drafting powers of attorney, creating trusts, and setting up guardianships. In many cases, professional fiduciaries are appointed to step in and take on the responsibilities that would otherwise fall to family members.

When Might You Need Fiduciary Services for an Aging Loved One?

There are several scenarios in which fiduciary services may be needed to protect an aging relative:

Cognitive Decline or Incapacity

If an aging loved one is experiencing cognitive decline, such as Alzheimer’s or dementia, they may lose the ability to make sound financial decisions. In these cases, appointing a fiduciary can help prevent poor financial choices or potential exploitation. A fiduciary can manage their finances, ensuring bills are paid, investments are maintained, and assets are protected.

No Trusted Family Member or Friend to Act as a Fiduciary

Many families may not have a relative who is willing or able to take on the responsibility of managing an aging loved one’s affairs. In this case, hiring a professional fiduciary ensures that someone experienced and impartial is handling financial and legal matters, often alleviating families' stress.

Complex Financial or Estate Planning Needs

A professional fiduciary may be needed to manage these assets effectively if your aging loved one has a complex estate, such as multiple properties, investments, or a family business. Elder law attorneys can work with fiduciaries to create a comprehensive estate plan that addresses these complexities while protecting the senior’s assets.

Guardianship or Conservatorship

When an aging loved one can no longer make personal or financial decisions and no prior legal arrangements, such as a power of attorney, are in place, guardianship or conservatorship may be necessary. A court-appointed guardian or conservator (who may be a fiduciary) is given the legal authority to make decisions on behalf of the incapacitated person.

How to Choose the Right Fiduciary

Trust and competence are key factors when it comes to choosing a fiduciary for an aging loved one. Whether you select a family member, friend, or professional fiduciary, they must be able to handle complex financial decisions, remain impartial, and act in the best interests of the individual.

Here are some considerations when choosing a fiduciary:

• Experience: Does the person or professional fiduciary have experience managing finances and legal matters?

• Trustworthiness: Can you rely on the fiduciary to make decisions that reflect your loved one’s best interests, even in challenging situations?

• Objectivity: A professional fiduciary can offer unbiased management, which may be especially beneficial in complicated family dynamics.

• Proximity: While not always essential, it can be helpful if the fiduciary is geographically close to your loved one, particularly if hands-on care or frequent visits are needed.

Your Trusted Fiduciary Partners

Fiduciary services, combined with elder law, offers a crucial layer of protection for aging loved ones. As cognitive and physical abilities decline, managing finances and legal responsibilities can become overwhelming, and the potential for financial exploitation rises. By appointing a fiduciary, families can rest assured that their loved one’s best interests are safeguarded.