Managing someone else’s money
A friend at the office was just asked to serve as the guardian of her aunt’s property and help manage her finances. That started a conversation around the lunch table: It turns out that several of us know people who have signed papers making them responsible for helping a friend or family member manage their money or property — that is, who serve as fiduciaries.
Fiduciary responsibilities depend on the needs and circumstances of the person you’re helping and on state law, but all fiduciaries have basic legal duties. The Consumer Financial Protection Bureau describes the duties in a new series of publications. As a fiduciary:
- you must act only in the best interests of the other person and make decisions that are best for him. You can’t let your needs and interests, or the needs and interests of other people, influence you.
- you must manage the person’s money and property carefully. You’ll be responsible for using the money to pay bills, rent or taxes, invest, and do what’s necessary for the person you’re helping.
- you need to keep the other person’s money and property completely separate from your own. That means you can’t use joint bank accounts that combine your money and the other person’s.
- you must keep good records of what you receive for the other person and what you spend. You may have to file a report with the court or government agency that named you as the fiduciary.
For more information about taking on fiduciary responsibilities, read the guides for fiduciaries.