Committeeships

Committeeships (pronounced commit-táy-ships) are a little-known but very useful financial planning tool. Applying to the courts to set up a committeeship enables you to act freely on behalf of a relative who has become incapacitated and has not established a Power of Attorney.

For example, if your Mother owns a house and has suffered a sudden stroke or head injury, her house may need to be sold so she can afford a nursing home. You can apply for a committeeship, which means you have been approved and appointed by the court to sell your Mother’s house on her behalf. The terms of the committeeship require you to report annually to the court on how you have spent your Mother’s money.

Being named in a committeeship requires caution on your part due to the strict legalities and fiduciary responsibility they carry with them. As your Mother’s fiduciary, you must keep a careful paper trail to prove that you have acted ethically and protect yourself from liability.

Used judiciously, the committeeship is the ideal solution for people who have elderly parents as it can give them the license to act effectively in their family’s best interest when a Power of Attorney has not been appointed.