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What to do when managing someone else’s money

Things can change as we get older. Someone who could easily manage their finances may require help from a trusted friend or family member.

It's estimated that 22 million Americans 60 and older have named a power of attorney to make financial decisions for them. Millions of others have court-appointed guardians to handle money matters.

Often, these are nonprofessional money managers or "lay fiduciaries" who try to do the best they can without any sort of formal training.

(Read more: 401(k) savers falling behind schedule)

"Many older Americans have lived frugally and planned carefully for their later years," said Nora Eisenhower, assistant director for the Office of Older Americans in the Consumer Financial Protection Bureau. "It is critically important that they and their resources are supported by a financially savvy loved one who understands the importance of maintaining good records, investing prudently and avoiding conflicts of interest."

The CFPB just released guide booklets to help people deal with a situation that can feel overwhelming. They spell out in plain English the main duties and the four main responsibilities of a fiduciary:

  1. Act in the other person's best interest: A fiduciary should not loan or give the person's money to themselves or others. They also should avoid any conflicts of interest.
  2. Manage their money and property carefully: This includes paying bills on time, protecting unspent funds, investing carefully and having a list of all money, properties and debts.
  3. Keep their money and property separate from yours: That means no joint accounts, and paying the person's expenses with their own funds and not from the fiduciary's money.
  4. Maintain good records: The fiduciary should keep a detailed list of the money received or spent on the person's behalf. Avoid paying in cash in order to have a record of purchases and keep all receipts.

There are four guides, one for each of the four different types of fiduciaries: people named in a power of attorney, those appointed by a court to be guardians or conservators of property, trustees under revocable living trusts and those appointed by a government agency to manage income benefits, such as Social Security or veteran's assistance.

(Read more: Should you use a financial advisor for health care?)

Svetlkd | E+ | Getty Images

People with diminished decision-making capacity are especially vulnerable to scams and financial exploitation, so all four guides explain the warning signs of fraud.

The guides are not specifically designed for informal caregivers, those who help a friend or family members with their day-to-day living and financial matters without a court order or legal power of attorney. But, much of this information also applies to them.

More help will be needed in the years ahead

The U.S. population is aging. About 10,000 Americans turn 65 every day. As a result, more people will live long enough to deal with dementia and Alzheimer's disease, so the need for these money management skills will continue to grow.

(Read more: Why Social Security recipients may feel the pinch)

The Alzheimer's Association applauds the CFPB's work to provide this educational material.

"When a person gets Alzheimer's, family members are often unprepared to deal with the financial planning or involvement that may be needed," said Ruth Drew, the association's director of family and information services.

"If the person with Alzheimer's handled personal finances, a spouse or adult child may not know what steps to take. It's easy to put off doing things that are unfamiliar and uncomfortable. Good financial education and preparation can save so much heartache."

The CFPB guides can be found here. Paper copies may be ordered online.

—By CNBC contributor Herb Weisbaum. Follow him on Facebook and Twitter @TheConsumerman or visit The ConsumerMan website.

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