By Jason Alderman

Anyone who’s ever been asked to step in and manage their parents’ or someone else’s personal finances can tell you that it’s an awesome responsibility – and by “awesome,” I don’t mean “totally cool.” It’s more like “inspiring an overwhelming feeling of fear.” (Thank you, Dictionary.com.)

In recognition that millions of Americans act as fiduciaries (i.e., manage money or property) for loved ones, often with no formal training or expertise, the Consumer Financial Protection Bureau (CFPB) has created four, easy-to-understand caregiver guides called “Managing Someone Else’s Money” (at www.consumerfinance.gov.)

CFPB Director Richard Cordray notes that there are 50 million older Americans – and millions of aging baby boomers are rapidly approaching retirement. Some 22 million people over 60 have already given someone power of attorney to make their financial decisions, and millions of others – including younger disabled adults – have court-appointed guardians or other fiduciaries. “In order to protect our seniors, we must educate the caregiver generation,” he explains.

Sometimes that means learning more about the financial products and services available to seniors to help them make informed choices. But often, it’s the caregivers themselves who must make critical decisions – whether they’ve got power of attorney for a parent with Alzheimer’s or have been tapped to manage Social Security benefits for a disabled friend.

The CFPB guides are geared toward people in four different fiduciary capacities:

• Someone has granted you “power of attorney” to make money and property decisions on his or her behalf.
• “Court-appointed guardian,” where a court appoints you guardian over a person’s money and property when they can’t manage it themselves.
• You’re named as “trustee” under someone’s revocable living trust and have decision-making powers over the trust’s assets.
• “Government fiduciary,” where you’ve been appointed by the government to manage someone’s Social Security or Veterans Administration income benefits.

The CFPB cites four main responsibilities for fiduciaries:

• Act in the person’s best interest. For example, a fiduciary shouldn’t loan or give the person’s money to themselves or others and should avoid other conflicts of interest. The guides provide examples of actions that may pose conflicts.
• Manage money and property carefully. This includes paying bills on time, protecting unspent funds, investing carefully, and maintaining a list of all monies, properties and debts.
• Keep your money and property separate. This means paying the person’s expenses from his or her own funds, and avoiding joint accounts.
• Maintain good records. Keep detailed lists of money received or spent on the person’s behalf, avoid paying in cash in order to have a record of purchases, and keep all receipts.

The guides walk caregivers through their fiduciary responsibilities and provide practical money-management ideas, such as what sort of records you should keep, how to interact with banks and other professionals on their behalf, and suggestions for avoiding conflicts with family members and friends who disagree with your actions.

They also provide tips for spotting financial exploitation and avoiding scams. As Cordray notes, seniors “make attractive targets because they often have tangible household wealth – whether it is in retirement savings or home equity – but they may be isolated or lonely or otherwise susceptible to being influenced by a predator in disguise.”

Bottom line: Fiduciaries must be trustworthy, honest and act in good faith. If you don’t meet these standards you could be removed from the position, sued, forced to repay ill-spent money or possibly even jailed. That’s why it’s important to make sure you’re qualified before accepting the responsibility of watching over someone’s finances.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney