Making Financial Decisions

The following material was adapted from a piece by Brigitta Sharpe, former attorney at Guzman Kallheim Sharpe, PA, specializing in legal services to persons with disabilities, older adults and their families.

Planning Ahead

Most of us will need help at some point with making personal decisions, including managing finances and property. Some plan ahead for a possible incapacity by creating power of attorney documents, health care directives and funding trusts. Many, however, do not have any mechanisms in place, leaving family members to scramble for ways to meet their needs. Certainly, it is easier, more complete and more empowering to plan ahead. But where do you start?

Informally, you can begin by talking to your loved one about assets and income. To help parents or others manage assets, secure property and pay bills, you need to know what assets they own, where they are held and whether there are outstanding debts. Discuss the types of insurance loved ones have, including what services are covered and what benefits are provided. Obtain a list of contacts with phone numbers of banks, insurance companies, physicians and other financial consultants.

You may want to consult an attorney about formal planning, such as executing a power of attorney, preparing a will or creating a health care directive. Regardless of the mechanisms you employ, some planning is better than none.

Below are some factors you may be faced with and should take into consideration. Going through these topics together can promote closeness and ensure that a loved one’s wishes are understood.

Financial Status

What is the individual’s overall financial status? What assets does he or she have, such as a home, a car, CDs, stocks, annuities or IRAs? Are the accounts in joint tenancy or “authorized signature” accounts or are they titled in the individual’s name alone? What income does this person receive? Are there pension, Social Security, veteran’s benefits or annuity payments? Check all beneficiary designations to make sure they are up to date.


What types of insurance does the individual have? Make sure you have names and phone numbers of insurance carriers and policy numbers of the actual coverage. If the individual has health insurance, what types of services does it cover? Most health insurance, including Medicare, does not cover long-term or skilled nursing care. Does the person have long-term care insurance? If so, what benefits are provided and for how long?

Health Care Directive

In Minnesota, the Minnesota Health Care Directive allows individuals to appoint another person (or multiple people) to make health care decisions for them if they are no longer able to make their own decisions. The person appointed is called a health care agent. The health care directive enables individuals to state their wishes for the kind of medical treatment they want or do not want, including life-support treatment, and provides an opportunity for individuals to share their concerns with the persons they appoint as agents.

Attorneys are not needed to complete this document. Most hospitals and physician’s offices can provide a health care directive and someone there can help you complete it. A health care directive requires the signatures of two witnesses or a notary public.

Estate Planning

Many topics involving estate planning should be discussed with an attorney. Here are just a few.

Power of Attorney

A power of attorney is a written document that allows an individual to appoint another person to act on his or her behalf regarding financial decisions. In Minnesota, there are two common documents. The Minnesota Statutory Short Form Power of Attorney is a document that provides several options from which an individual can select to shift power to someone else. The Common Law Power of Attorney document is drafted by an attorney to cover particular powers or provisions not included in the short form document.

Last Will and Testament

Wills are legal documents that help ease the transition of ownership of an estate after death, assuring assets are distributed according to the wishes of the individual. A will does not change property ownership while an individual is still alive, unlike a living trust, which actually transfers the assets to a trust. A will, however, does not guarantee the avoidance of probate.


A trust is a legal arrangement whereby a person or financial institution (the trustee) holds legal title to and manages assets for the benefit of an individual, called the beneficiary. The person who creates and funds the trust is the grantor. A “living trust” or “inter vivos trust” is frequently used as a tool in planning for incapacity, as it is created by a trust agreement during the grantor’s lifetime. This individual transfers ownership and control of his or her assets to the trust while still living, and the property transferred is used for the grantor’s benefit during his or her life. When the grantor no longer has capacity to serve as trustee, a successor trustee named in the trust agreement takes over as trustee.

Guardianship and Conservatorship

Guardianship and conservatorship are forms of substitute decision making established through a legal action or proceeding. In the proceeding, a court orders the appointment of a person (a guardian or conservator) to act as a substitute decision maker for another person (the ward or protected person). Generally, a guardian is appointed to make decisions regarding an individual’s personal care, such as deciding on an appropriate residence, medical provider or medication. A conservator is appointed to make decisions involving an individual’s financial care, including property management, investment of assets and bill paying.

For more information on financial matters for older adults.