Trusting Others With Your Money
There may come a time when you have to allow someone else to handle your finances. Military personnel sometimes have to entrust someone else with their bills and other financial concerns when they go on a remote deployment. People who are hospitalized for long periods of time may have to allow someone else to handle their finances until they are well enough to deal with it themselves. Some people allow their adult children to take over their finances when it becomes obvious that they can no longer actively manage their own money.
Whatever the situation, allowing someone else to take over your finances – whether temporarily or permanently – is not a decision that you should make lightly. In fact, it can be easily argued that the biggest decision isn’t allowing someone else access to your personal finances, but instead is who you allow access to your personal finances. Granting full access to your personal finances to someone who does not have your best interests in mind can be devastating.
A prime example of this is a situation when you give someone else a Power of Attorney in order to manage your money for you. A Power of Attorney essentially lets someone else act on your behalf. There are different kinds of POAs, but if you grant someone a general POA this person can then turn around and access your bank accounts, open new credit lines in your name, and generally do whatever you can do on your own with regards to your money. While some financial institutions may require additional documentation beyond a simple POA, in many instances all a person needs is a valid Power of Attorney in order to cause some real mischief.
This is certainly not to say that giving someone a Power of Attorney will always wind up causing a financial disaster. A POA is a necessary step to take when you need to allow someone else the power to manage your finances for you. The important thing is to remember that you should be incredibly picky with who you give access to. While it is a good idea to give your spouse a POA before leaving for an extended trip or going into the hospital, it is not a good idea to give your buddy a POA when you don’t even know how he manages his own finances.
If you need to have someone else handle your finances for a period of time, but you don’t have anyone around you who you can truly trust to take care of your money, consider hiring someone from a professional agency to manage your money for you until you can deal with it yourself.
February 23rd, 2009 at 5:59 pm
[…] Constant Conservative wrote an interesting post today onHere’s a quick excerptThere may come a time when you have to allow someone else to handle your finances. Military personnel sometimes have to entrust someone else with their bills and other financial concerns when they go on a remote deployment. People who are hospitalized for long periods of time may have to allow someone else to handle […] […]
February 23rd, 2009 at 6:05 pm
[…] Personal Finance Advice placed an interesting blog post on Trusting Others With Your MoneyHere’s a brief overviewThere may come a time when you have to allow someone else to handle your finances. Military personnel sometimes have to entrust someone else with their bills and other financial concerns when they go on a remote deployment. People who are hospitalized for long periods of time may have to allow someone else to handle […] […]