CFPB releases New Guides Providing Financial Advice for Parents/Caregivers of Individuals with Disability

Thursday, September 3rd, 2015

Hello everyone, and welcome back to the blog this week! Thank you all for taking the time to drop by.

Today, we would like to talk about finances – specifically, financial management and financial planning. If you are a parent or a caregiver of an individual with disability, you may find yourself responsible for managing the financial resources of that individual. This includes making decisions that could have a huge impact on his or her future financial health. As financial planners by trade, we know that parents and caregivers find this responsibility to be very stressful. We also know that the most important part of any successful decision is the information on which it is based, which is why we ensure that our clients have access to reliable, relevant information on the latest strategies necessary for future financial success.

Over the last couple of years, the federal government has taken steps to acknowledge how important it is to make informed decisions when managing the finances of other individuals. In 2013, the Consumer Financial Protection Bureau (CFPB) released a document titled Managing Someone Else’s Money, a series of guides intended to help caregivers and parents make successful financial decisions and avoid scams and frauds. This past week, the CFPB took this one step further by amending these guides to reflect state-specific guidelines of Virginia, with plans to amend the guide to reflect an additional 5 states.

Interested? Please read on to learn more.

Managing Someone Else’s Money: Financial Advice from the CFPB

Managing Someone Else’s Money is a series of four guidebooks that were released in October of 2013. Written and published by the CFPB, these guidebooks are intended to help financial caregivers – fiduciaries – understand what they can and cannot do when managing someone else’s money. These guidebooks each contain general information on the fiduciary’s responsibilities, but each of the four guides is intended for a specific audience. As is written on the CFPB’s website, “…the Bureau is publishing four guides in order to tailor them to the needs of people in four different fiduciary capacities” – powers of attorney, court-appointed guardians, trustees, and government fiduciaries.

According to the CFPB, the guides highlight the four main responsibilities of a fiduciary: act in the best interests of the person, manage money and property carefully, keep money and property separate from own, and maintain good records. The guides also advise fiduciaries on how to avoid scams and fraudulent financial opportunities, and provide a resource guide for individuals wishing to learn more about this topic.

For more information on these guidebooks, please click here to read the CFPB’s press release from 2013. For .pdf copies of the guidebooks themselves, please click here.

State Specific Guides

Recently, the CFPB took these guidebooks one-step further by launching a second phase of the Managing Someone Else’s Money initiative: state-specific guides. According to the CFPB, these revamped guides came from the recognition that “people’s powers and duties as a fiduciary vary from state to state,” and as such, more was needed than the one-size fits all guidebook that, until recently, was all that was available.

Virginia is the first of six states (Arizona, Florida, Georgia, Illinois, and Oregon) to receive the specially adapted versions of the Managing Someone Else’s Money guides. As is written on the CFPB’s website, “because states have unique laws and practices, our state guides provide specific information about what fiduciaries need to know. For example, the Virginia guide for conservators explains that they must file annual reports with the court-appointed Commissioner of Accounts. The power-of-attorney guide explains when the agent may use the money to make gifts. All four guides have a ‘where to go for help’ section at the back that lists Virginia agencies and service providers that can offer timely assistance for caregivers when they need it.”

Although the CFPB has stated that the guides for the remaining five states will follow shortly, no definite dates have been set as of yet. These six new guides will also act as templates and provide tips for the remaining states to adapt and offer as a resource for their own populations.

To learn more about the release of the Virginia-specific guidebook, or to access these guides please click here.

Would You Like More Information?

M&L owner/found Maedi Tanham Carney is a Certified Financial Planner with more than 20 years of experience with providing financial planning services to corporations and individuals in the Washington, D.C. area. In 2009, Carney shifted her focus to helping individuals with special needs and is proud to offer a number of different services that help families with special needs make those tough financial decisions. If you would like to learn how M&L could help you successfully manage the finances of your child – or any individual – with a disability, please check out our Services page. We also offer a number of workshops throughout the year that may cover topics that are of interest to you. Please contact us if you have any questions, or would like more information.

Thanks again for visiting us – please join us next week for an update on the ABLE accounts, and a comparison of ABLE accounts vs. special needs trusts.

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