Legal Question in Securities Law in California

Re: Mother's almost Incompetency

Advice of this kind is best given by an attorney in direct communication with the principals, as that allows evaluation of the subject's apparent competence. However, here are a few observations that might be useful:

1) You could consider applying to be appointed her conservator, which would give you exclusive powers whereas an attorney in fact under a POA generally shares power with the principal. However, the office of conservator is very demanding in terms of carrying out the responsibilities and making reports and accountings, and can involve a fair amount of legal fees.

2) If your POA allows, you could simply transfer the assets to a trust under the management of a suitable trustee. You'd have to verify with a trust attorney beforehand that this exercise of the POA was permissible and appropriate, and make sure that the trust was properly drawn and the selection of trustee was sound.

3) If your mother's prime source of entertainment is the hobby of investing, you could discuss the issues with her broker to see if they have any ways within their firm to limit her exposure and risk without denying her her fun. It might be that they can set up the account so trades require two signatures, for example.

Please understand that an attorney in fact, conservator or trustee is a fiduciary and bears a lot of personal responsibility to act wisely and appropriately. For your own peace of mind and to prevent possible personal liability, you need to seek advice (but don't delegate actual authority) from an elder law (or estate-planning) attorney in your community, since the personal contact and evaluation aspects are so crucial here.

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