Elders with dementia or other cognitive issues often cannot manage their finances.  Scams, or even family members, can defraud such vulnerable people.  Missed payments of taxes, insurance or other critical bills can be expensive errors.

It’s axiomatic that a competent adult manages their own finances. However, if a person is disabled due to mental disease or is a spend-thrift, we can request that the court appoint a conservator to manage the disabled person’s finances. The conservator may be a trusted family member, friend or a professional conservator. Their duties range from paying everyday bills to selling real estate or stock.  They can even do Medicaid planning and tax planning for asset protection.

If the elder issues a Power of Attorney, conservatorship may not be necessary. Making a Power of Attorney is a simpler process and does not require going into court.  An elder can use a Power of Attorney to give someone else authority to manage some or all of their financial affairs; but whether a Power of Attorney is sufficient instead of a conservatorship depends on the complexity and nature of the elder’s incapacity. A person with mental capacity can designate a Power of Attorney. If they’re incompetent, a conservatorship is necessary.

Power of Attorney documents can be one page or multiple pages depending on the particular estate to be managed. Be certain to have a qualified lawyer make the Power of Attorney. It must contain all the legal formalities and look like the important financial document it is.

Problems can occur when the person with the Power of Attorney goes to a bank to inquire about, or take over, an account.  If the document looks inadequate in any way, the bank will not accept it and you’re back to square one. Remember: a power of Attorney is only as good as the bank thinks it is.

Conservators can protect elders from new types of crime enabled by the internet age.  Persons with dementia or those living alone are most vulnerable. Elders often have a nest egg; and the scammers will keep asking for more and more money as long as the victim will give it. These scams take many forms and are very creative.

For example, a scammer will call an elder living alone and convince them that they are someone they know and that they need money for their child who has cancer and requires expensive, specialize surgery.  They will ask for a certain amount of money and instruct the elder how to wire the money, usually to a foreign bank account. Wire instructions are simple: the elder is given only a bank routing number and account number. After the money is wired, it’s quickly picked up on the other end, often in cash, and the trail ends there. The scammer can be anywhere in the world. Currently Nigeria and the Ukraine show a lot of this activity, but they can come from anywhere. Anyone with a laptop in a basement can conduct such a scam.

A person whose thinking is impaired can believe stories the rest of us would laugh at. I was involved in a case in which an elder was convinced to FedEx their credit card overnight to someone in Europe. The scammer on the other end quickly ran to several different banks, withdrawing the maximum from each ATM. The fraud was discovered the next day, but by that time they had withdrawn $12,000. in cash advances.

An unscrupulous or desperate family member can also defraud a vulnerable person.  This can take the form of asking for gifts, for money for a fictitious need or for bank account access; or they may be pressured into signing a deed or a will.

As previously stated, Conservators can be a trusted family member, friend or a professional conservator. The advantage of a professional conservator is they are usually required to be bonded, which is extra protection for the elder. A professional conservator who is an attorney will likely have professional liability insurance in case of any problems. In Massachusetts, attorneys are not required to carry professional liability insurance, so one should check with the Massachusetts Board of Bar Overseers or contact this office and I will check for you.

Conservatorship is distinct from Guardianship. Conservatorship alone means one person to manage the finances of another—that’s all.  If a person is of such diminished capacity that they cannot make medical or other personal decisions then a Guardian should be appointed. See Guardianships on another page on this website.

Massachusetts Courts under Chapter 190B Section 5-101 can also appoint Conservators for a Single Transaction and Temporary Conservators.