Often times when we get calls from other professionals looking for money management services for their client, they are usually calling about one particular type of service. In some cases after discussing their clients situation, we often determine there maybe a better fit or solution available than the one they were originally inquiring about.
Different types of services that may be addressed are:
Daily Money Management
Durable Power of Attorney
Conservatorship
Representative Payee
Household Management
In order to best determine what solution maybe most appropriate, there are 6 fundamental areas to address. These areas are not in any specific order and are most often used in combination with each other when trying to assess what services will work best.
1. Does the client have capacity to make decisions for themselves?
If your client has very limited or no capacity at all then it is likely that daily money management or power of attorney services will not be options for them. In most cases, both services would require that the person be able to make decisions.
Of course there maybe exceptions in some situations where adult children can hire a daily money manager to work with their parent or if a current agent is given the authority in a POA document to choose a successor agent of their choice.
Capacity usually plays a part in most services.
2. What types of assets are involved and what is their value?
For example: Do they have real or personal property? Bank accounts? Investments? Vehicles? Are they on government programs such as Medicaid? Is the person’s estate worth $10,000 or $10,000,000?
Sometimes the type and value of someone’s estate can warrant the decision of a particular service plan such as a Conservatorship versus Representative Payee.
3. What type of monthly income do they receive?
This becomes important if the only form of income is Social Security; this also includes SSI and SSDI benefits. If this is the case and we have determined that they have little to no capacity and limited assets then they probably only need Representative Payee instead of a Conservatorship.
If they have multiple forms of income in addition to Social Security then you will need to add another service on top of Representative Payee in order to have the authority to manage the other income.
4. What are the family dynamics?
If we need to protect the person’s assets from the family then daily money management is usually not the best fit. Again, depending on whether or not your client has capacity, I would suggest a more supervised or controlled arrangement such as a Trust, POA or Conservatorship.
5. What control or participation level does the client want to maintain?
Depending on a person’s level of capacity, they may want to have as much or as little involvement in the overall day to day management of their affairs. This information is important to know as it may change the level or type of service provided.
6. What estate planning, if any, has already been done?
Does the client already have a power of attorney, a will or trust document in place? Sometimes a family member who is currently acting as an Agent under a trust or power of attorney no longer wants to assume that role and it is often necessary to determine what type of flexibility those documents may have.
Determining what type of service a person may need is not a one size fits all approach. Every person’s personal circumstance is different and it’s important that all possible solutions be evaluated prior to making a decision.
If you have a client that is in need of money management services but aren’t quite sure what would be the best route for them please call me and I will be happy to discuss some options with you.