If I want to legally take over my Mom's finances is there a way to do this without saying she is incompetent?

I hope that she has made you POA. It's so hard to prove incompetence (emotionally, financially and legally). It sounds like she's got a mess, including the reverse mortgage. They are not always a bad idea but can be done by "shady" institutions as you mentioned. Good luck with this.
Carol

POA is not about mental incapacity - it is not incompetence at all. A POA allows one person to act for another (or indeed several people to act for another depending on the POA). If for example you booked a holiday in 2014r to go on a cruise this coming Christmas (2015) and you suddenly find that your house sale hasn't gone through and the exchange of contracts is going to occur while you are on the ship then you could designate a POA for a period of time (Ie the duration of the cruise) In your mothers case this would be enduring - i.e. for the rest of her life and all that needs to happen is for her to complete and sign the forms and have them registered with whoever that is in the USA (sorry I am a Brit) IF however she is mentally incapacitated then she may need to be seen by a specialist in Dementia (or similar) because she has to be able to make a decision - not a choice- a decision.

A choice is what colour socks do you want to wear the red or the black

A decision is being able to explain the choice and the reason for it and the outcomes (where applicable) of it So I want to wear the red ones because they contrast nicely with my outfit and are thinner and the shoes I want to wear are on the small side and if wear the black ones my toes will feel squashed.

Once you have POA you need to register it with all institutions and that will be a royal pain in the arse let me tell you - Banks are not terribly helpful

My mom was more than happy to give up the hassle of worrying about her budget and bill payments long before she became incompetent.

Since you already have access to her accounts it should be simple to set up automatic bill payments or do them with online banking, if she finds the actual bills confusing you could have them sent to your house or just go paperless.
Restricting her ability to overspend can be more of a problem, but you could make sure her credit cards have a low limit and place the bulk of her funds in less liquid investments. Have you had a frank chat with her about her finances? Some people haven't a clue how to live within their means, and they don't have to be elderly either!

A Durable Power of Attorney would be completed by an Attorney. I would recommend a Certified Elder Lawyer they can help you manage her miney and spend down to be eligible for public programs. Your mom has to agree but this will legally make you the the person responsible for her finances without her being incapacitated. You will also want the attorney to make you medical POA an probably executor of her estate and complete her Will.

When my mother moved in with me in another state, I went to social security to have her address changed. I explain to the lady at the desk my mother had dementia. Social Security made me the payee. I then went to the bank to have her check transfer to the new bank. They put my name on it and beside my name was written payee. Which meant it was mamas money but I could write all her checks. Along with this you have to keep all receipts and the money can only be used for her and her bills. I later got DPA. That was for her medical and financial needs. Again its very important to keep receipts and write down all expenses. Once she went into a nursing home, everything is written over to the NH. POA and DPOA either one make sure you keep records and receipts You will be audit by Social Security.

You can get all the documents you need for a POA from Legalzoom. Much cheaper than a lawyer and very easy to understand. You will need a notary to witness the signing and 2 other witnesses. A POA is not about incompetence.

Tad, the Guardianship hearing is very sensitive to your mother's dignity. Nobody is going to point to her and call her incompetent. The court evaluator will interview her and ask her if she trusts you. The MD will submit a medical opinion. Your mom will have her own lawyer called a Guardian ad Litem for the hearing. She doesn't even need to go to court if she does not want to. Our mom did not go, she was perfectly happy to let someone else handle all the decision making.

The guardianship process (called conservator ship in CA) is a very expensive and cumbersome legal process and should only be undertaken if there is a dispute in
about who should be in charge of the money. I worked for 3 years as a court investigator for such cases.

If your mom is able to understand questions and terms of a medical, durable, and mental health POA than you can have a competant Notary sign the papers for your mom. In AZ you do not even need to be present however it is a good idea. The notary is witnessing that your mom is aware of the content of the documents and agrees to them. She is her notary - not yours. People can make this very complex if they want to or keep it more simply done. Once deemed incompetant things can get very sticky. Too many people wait to long and then there is no going back. You can find the appropriate paperwork online and yes, once signed and notorized they are legal documents. Most banks have forms they want used for financials but the process is the same. Do this as soon as possible before your mom shows significant signs of incompetance -some forgetfullness is not the same as incompetance. A good notary should say that you mom is not able to understand what she is signing and won't go any further if that is the case. Make sure when your mom is w/ the notary that she has not taken any altering meds ie: pain meds, sleep aids, etc. as that can alter her mind set and can make her appear less capable than she really is.
Good luck and don't wait. A mental POA has nothing to do with current incompetance . It is designed to address needs in the event of.......

I got the run around from the banks too, even with valid poa's.
Not like it used to be. Having a local lawyer who can later get involved is helpful since these "bank rules" are often not written..they just don't want to go through the expense and potential exposure of validating the poa. One regional small bank I dealt with had their legal depth review it. No problem . Great. The other was a global commercial bank that wouldn't budge until the lawyer called the manager.