Can a brokerage control Mom's money?

1 answer | Last updated: Sep 14, 2017
A fellow caregiver asked...

My mom has progressive dementia and lives in her own home. My brother lives with her free and clear and arranges caregiving to assist her almost 24/7. Both my brother and I have equal power of attorney. Mom has joint bank accounts with me. However, she also has stocks with a brokerage firm, her name only with children as beneficiaries. We were using the cash reserve to help pay for home care. The firm has now put a block on her account unless a court appointed guardian is executed.

The guardianship would end a lot of sibling conflict, however, it is costly and time consuming. We are in agreement that we feel the money should be spent on mom's care and not on sibling conflict. Can the brokerage firm legally hold up mom's money? What happens when Medicaid is needed?

Expert Answers

Barbara Repa, a senior editor, is an attorney, a journalist specializing in aging issues, and the author of Your Rights in the Workplace (Nolo), now in its 10th edition.

It would be unusual for a brokerage firm to insist on a guardianship on its own volition, particularly if there is a legally effective power of attorney for finances that empowers you and your brother to act as agents on your mother's behalf.

Take another look at that document and be sure to read the fine print. Some powers of attorney, for example, only take effect after a doctor or sometimes two, have certified in writing that a person is no longer able to act on his or her own behalf.

If the power of attorney that you and your brother hold for your mom is in order, take or send a copy to the brokerage firm and make someone there explain what else it requires. Some firms might require you to complete another form or two signifying that you and your brother are actually empowered to deal with the account"”all in the name of protecting against fraud or deception.

Finally, you might want to do a bit more delving into the possibility of a guardianship, especially if you feel that may pave the way to more harmonious dealing between the siblings.

Guardianships or conservatorships are not always expensive and not always time-consuming, particularly if you live in a spot where the court has a good self-help support system or offers expedited guardianships for targeted purposes. To find out, do a search for "probate court" and the local city or county.