Question: I am a financial planner with a small practice. I do not manage money. I do not sell any investment or insurance products. I charge hourly and flat fees for my services. I serve my clients by offering unbiased and unconflicted advice in their best interest. I conduct my practice as a fiduciary and maintain high ethical standards.
My wife has an aunt who is single and 91 years old. Several years ago, she moved from her long-time home several hundred miles away so she could be near her relatives. We helped her move into a residence for independent seniors that would provide assisted living services when needed. I agreed to help her manage her affairs. She designated me as her attorney-in-fact so I could pay her bills, navigate Medicare and generally make things easier for her. Financial statements and explanations of claims often left her frustrated and confused. At the time she was still driving and I helped her find an agent and register her car in our state. When the time came to sell the car, I found a buyer, executed the sale and deposited the proceeds into the aunt's account. I do not charge her for any of my services.
All proceeded smoothly for several years. The aunt was welcomed to all of our family gatherings and life was good. Unfortunately, she started to experience some cognitive decline. She would not be able to find things in her apartment and accuse neighbors and friends of stealing them. After some necessary dental work she accused her dentist of trying to cheat her and refused to pay. I helped her find a new dentist but with similar results. It soon became obvious that the cognitive decline was manifesting itself as a certain amount of paranoia. Sometimes she would become agitated and abusive to people around her, especially if their version of an event differed from hers. We involved several elder care specialists and consulted her doctors. She now takes several medications intended to reduce her anxiety that have produced modest improvement. After several kitchen "accidents" she moved from the independent side of the facility to the assisted living side.
Over the last year, the paranoia increased and the aunt has turned her suspicions toward my wife and me. When she couldn't find some papers, she called me to ask why I had used my key to go into her apartment and take them. She told me that she saw my car leaving the parking lot. I told her that would be impossible because I do not have a key to her apartment and I was on the other side of the country when the alleged theft occurred. She refused to believe me. She took her bank statements to the bank manager and to others to ask them to help her find where I am stealing her money. They assured her that all of the transactions were legitimate expenses. She refuses to use her phone because she thinks that I listen to her conversations. She tells people that I am stealing from her and that she wants someone else to have the power of attorney.
I would gladly turn the duties over to someone else but there is no one willing to take on the role. She has alienated everyone around her — both friends and family. She has almost exhausted her savings and now lives on just her
Social Security check.
What should I do?
(More: Ask the Ethicist: Should a financial adviser accept an inheritance from a client?)
Answer: This falls under the pessimistic axiom, "No good deed goes unpunished." Without someone willing to succeed you as attorney-in-fact, your only recourse is to stay involved despite the wishes of the aunt since it is clear that she can no longer manage things on her own. To abandon your role without someone to assume the duties would create greater chaos and could result in her failing to pay bills and losing services. That is not in her interest, as hard as it is on you. You could petition the family or probate court in your state to get involved. They could start proceedings to declare her incompetent and appoint a guardian and conservator to act on her behalf. Since she has so few assets, it will be hard to find anyone to assume the duties and the court may charge you with the task anyway. This step is involved and she would have a right to fight it. This can be expensive, not to mention divisive and painful for all involved. You might end up free of the responsibility eventually — or not. In the meantime, you will probably have some amount of mud thrown in your direction before the dispute is resolved.
Your well-intentioned efforts to help an elderly relative have now placed you between the proverbial rock and a hard place with little chance to escape the squeeze. Continue to pay the bills while trying not to take offense at the unwarranted criticism you are likely to receive. Since you have done nothing wrong, hold your head up with the knowledge that you are doing the right thing even though it won't be easy.
(More: Adviser compensation involves a conflict that can be managed — but not avoided)
Dan Candura is founder of the education and consulting firm Candura Group. Write to him to submit a question. All submissions will be treated confidentially.
