Is Mom's power of attorney responsible for the credit card debt she racked up?

Mad as hell asked...

My mom is in assisted living and is 90 years old. My sister who is power of attorney has taken out credit cards in her name and uses them regularly with her Social Security check. My mom sold her home two years ago and that money is used to pay for her assisted living---but soon she will run out of money and have to go to Medicaid. How do we find out her debt? And would my sister be responsible for the debt she has run up??

Expert Answer

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.

An agent empowered under a power of attorney has a very specific duty and responsibility: to manage and spend the principal's money in the principal's best interests. The agent has no right to take those funds"”and, say, buy herself a new pair of shoes"”as you're implying your sister is doing.

You are right to do a bit of advance planning for Medicaid"”and that may also mean getting a handle on your sister's spending habits that may have overreached into your mom's accounts.

Your first step may be a rather difficult one: sitting down with your sister and discussing your concerns for your mom's future, emphasizing that you both have your mom's well-being at heart. This talk will necessarily include the fact that Medicaid will require an accounting of your mom's accounts"”something that your sister as her agent will be in the best position to provide. And this discussion will necessarily include an emphasis of that fact that your mother's money at this point must be spent on your mother.

If the talking approach won't work to keep your sister in line, you may be forced to play hardball and ask her for an accounting. Many states and the specific wording of many powers of attorney make periodic accountings mandatory. But in your case, since it seems that you'd really like some evidence of how and where the money is going, it may be worth your while to at least ask for an accounting. It may be very revealing is your sister refuses to give one. And there's a chance you may learn that the money is not being as mismanaged as you fear.

If your sister is uncooperative and you remain concerned that your mom's money is being frittered away, you may need to resort to even harder ball: going to court and complaining about how the power of attorney is being administered. You should be able to find out how to institute this locally by contacting the probate court. Find it by doing an Internet search of the city or county in which your mother lives, along with the words "probate court."

A judge investigating the matter may then demand an accounting"”or remove your sister from her position as your mother's agent. While this may create additional tension between you and sister"”at least for a while"”it may be the only way to get to the bottom of the situation.