I have a durable power of attorney, and my father has Parkinson's and Dementia. He is currently in an Assisted Living Facility, but is going to need more advanced care. His social security checks and pensions currently pay for his care now, but this won't cover his more advanced care of a private nurse and memory care. I am getting his finances together, and found he has an investment account with a lot of money in it. Can I start to take some money out to pay for his care and his bills, or is there a huge tax penalty with this?
To understand each account you will need to speak to the bank, the entity holding the investment account, and etc. and to Dad's accountant or other tax person re financial repercussions, as you are also responsible for his yearly taxes and the records involved.
Being POA is a tough job. Once all entities understand who you are, have gone over your documents, and added you as POA the actual getting money in and out of accounts is easy, but that's only the beginnings, as you surmise with your question.
Begin to get books on acting as POA and see an elder law attorney with any questions you have on the list as a result of reading. And good luck. I served as POA for my brother, and as Trustee of his Trust; it was a huge learning experience I wish I didn't have to do. And his was a well oiled machine, very organized and simple. So my heart goes out to you.
It was a few years ago and I believe they requested my POA documents and set up the account with my name to be able to write checks out etc. They advised me on what mom has set up on tax hold outs - what accounts to use or cash in over another. So I would reach out to his advisor for those accounts.
If he needs the money for care, you have to take it out, regardless of the taxes that will be due. He needs the added care.