What records should a power of attorney keep?

When you handle a parent’s money under a power of attorney, you are acting as their agent, which makes you a fiduciary: someone trusted to act for another person and put their interests first. The records you keep are how you show that care.

What follows is a bookkeeping list, not legal advice for your state. The Consumer Financial Protection Bureau publishes a free guide for agents called Managing Someone Else’s Money, and that guide describes four duties that come up again and again: act in the person’s best interest, manage the money carefully, keep their money separate from yours, and keep good records. Many states that follow the Uniform Power of Attorney Act also expect an agent to keep a record of receipts, disbursements, and transactions. The words in your document, and the words in your state, control, and an elder-law attorney can read both with you.

Start with a picture of the first day

Before you pay a bill, write down what you found: account names, the institution, and the last four digits only, where statements arrive, what income is regular, such as Social Security or a pension, what bills are already on autopay, and where the will, the power of attorney, and the insurance papers live. You do not need passwords in the same notebook as the ledger, but you do need enough that another honest person could see the starting point without calling you.

Keep a register

A register is a running list, and each line needs a date, a payee, an amount in or an amount out, and a short reason in ordinary words. “Pharmacy” is enough, and “stuff” is not. If you moved money between the person’s own accounts, say so, and name both accounts. A transfer is not income, and calling it income makes the month look richer than it was, which makes the next question worse.

Keep the person’s money separate

The CFPB guide is direct about this. Their money stays in their accounts, and yours stays in yours. Mixing the two, even for a weekend, is how a clear record turns into an argument. If you buy groceries with your own card because you are standing in the store, treat that purchase as a reimbursement, not as a casual favor you will remember later.

Write the date, the amount, and where the receipt is, and pay yourself back from their account with a note that points at that receipt. Do not round it up, and do not pay yourself back in cash with nothing on paper. Cash without a receipt is the line that families fight about, because nobody can see it.

Save the paper, or a clear copy of it

Receipts, invoices, and statements are the proof behind the line. A receipt index can be simple: a number, a date, a vendor, and the place the file lives. Save bank and card statements in the same set, month by month.

Write gifts and transfers in their own place

A gift is not a grocery bill. A transfer to a child, a new name on an account, or a large check to a caregiver is the kind of line an elder-law attorney should see before it happens, not after a sibling finds it, so your ledger should have a page for these items that says, in plain words, stop and ask an attorney first.

If a transfer already happened, record what it was, who received it, and why, and do not rename it as something softer after the fact. Honest labels are the whole point of the book, and a birthday gift labeled as “care” helps no one when the question comes.

Keep a log of questions

When a brother asks what the dentist cost, write down the question, the answer, and the date. You are not building a case against him. You are saving both of you from having the same conversation from memory six months later, and fair questions get shorter when the answer is already on a page.

A companion note on tone is here: how to answer a sibling who asks where the money went.

Track hours only if you need to

Some families log caregiver hours, but that log is not a bill, and it is not permission to pay yourself. Whether a parent should pay a child for care is a legal question and often a tax question, so an attorney, and often a CPA, should shape any agreement before money moves.

Close the month

Once a month, match the register to the bank statement. Starting balance, plus money in, minus money out, should equal the ending balance, and if it does not, find the line before you send a report. Then write a short summary of what came in, what went out, what you paid yourself back, and anything unusual. The same month, filed the same way, becomes the record you can hand to a lawyer.

Keep more years than you think you will need

A common reason families wish they had kept statements is the Medicaid look-back. When someone applies for long-term care Medicaid, states can review transfers during a look-back period that federal law sets at 60 months for many of these cases, and the Centers for Medicare & Medicaid Services described that five-year review in a backgrounder on the Deficit Reduction Act. This article is not about how to qualify. It is about why a five-year file of statements, receipts, and notes is easier to live with than a scramble. How long you must keep records, and what your state asks for, is a question for an elder-law attorney, but a careful agent keeps the monthly file anyway, because the family may ask long before any agency does.

There is a separate explainer if you want the look-back in one place: what the five-year look-back is, and why records matter.

What you can skip

You do not need a color-coded binder that takes every Sunday, you do not need to send your brothers and sisters a bank login as your first answer, and you do not need to memorize the Uniform Power of Attorney Act. You need lines that add up, receipts you can find, their money kept apart from yours, and a short note in the month the money moved.

A simple set, kept every month:

1. A starting list of accounts, income, and bills.
2. A register of money in and money out, with the reason.
3. Statements, saved month by month.
4. Receipts, numbered, including anything you paid yourself back for.
5. A separate note for gifts, transfers, and any payment to yourself.
6. A short log of questions from family and how you answered.
7. A monthly reconciliation and a one-page summary.

The free Family Update Kit is one way to make that one-page summary for the family, and the POA Ledger is the fuller record. Its Five-Year Summary holds sixty months, as a filing tool rather than a Medicaid plan. A notebook with the same fields works too. Another person should be able to follow the money without taking your word for it.