Having someone manage your money, usually via a power of attorney (POA) document, is a big responsibility. The undertaking is loaded with opportunities to stumble and create legal, financial, and relationship problems.

When you select your fiduciary, they must follow four key rules:

1. Always act in your best interests—ahead of their own interests, says Naomi Karp, project manager for the CFPB's guides to managing someone else's money.

Translated to real life: That means that they don't use your money to buy a car to take you to the doctor and then use the car more often for their own errands.

2. They can manage money and property carefully. Avoid a conflict of interest or even the appearance of a conflict, says Jan McCurdy, co-owner of Senior Care Management in Ewing, N.J.

Translated to real life: They shouldn't be hiring their son to mow your yard for $75 without getting an estimate first from a lawn care company. Then if someone—a jealous family member or judge—questions them, they can show the $200 estimate from the lawn care company.

3. Keep your money separate.

Translated to real life: That means separate financial accounts, McCurdy says. "People put money into their [own] account just for ease of access and then they go to apply for Medicaid and realize this is a big mess trying to figure out whose money is whose."

4. Maintain good records. Make sure they keep a paper trail to do a full and fair accounting.

Translated to real life: If you helped pay for your grandson's college books, write it down so no one will be surprised when you pay for another grandchild's books.

Make sure their POA document is complete and covers asset protection authority with the ability to make unlimited gifts, create trusts, take money out of trusts, and terminate trusts.

Consult an attorney, preferably a certified eldercare lawyer. A qualified eldercare attorney can help you legally protect assets to qualify for Medicaid to pay for nursing home care if needed.

Talk to us at Hawaii Central Federal Credit Union. We can help you streamline the management of parents' funds to comply with your fiduciary duties and keep things running smoothly at the same time.

Copyright 2014 Credit Union National Association. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.