advertisement
Forums

The Forum is sponsored by 
 

AAPL stock: Click Here

You are currently viewing the Tips and Deals forum
Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: clay
Date: September 20, 2023 10:46AM
I'm aware of a situation where a parent would like to add an adult child as something--authorized signer? other term?--to their bank account because, in their words: "It would give you the authority to access my funds if I pass away, or am ill, and unable to pay bills." I don't know if this is the layman's description for a financial power of attorney or some other legal arrangement, or whether it's less of a legal arrangement and more of an administrative arrangement with this particular bank.

Can banks setup financial powers of attorney easily? If so, are those only in effect with that particular bank, or does that carry over to other institutions that the person uses? Does the above sound like something else altogether? Just wanting to make sure I pass along good advice to the child in this situation. The child would like to help.
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: DeusxMac
Date: September 20, 2023 10:51AM
You could simply make it a “joint” account. That can all be handled at the bank branch office.
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: NewtonMP2100
Date: September 20, 2023 10:52AM
….for me, just added child as joint….parent can also register account as TOD, Transfer on Death, listing the child as beneficiary….the 2nd way, the child only gets when parent passes away….the 1st allows the child to make transactions on the parents behalf…..



_____________________________________

I reject your reality and substitute my own!



Edited 2 time(s). Last edit at 09/20/2023 10:54AM by NewtonMP2100.
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Fritz
Date: September 20, 2023 10:55AM
joint is what I did with my mum.



!#$@@$#!

What if the hokey pokey really is what it’s all about?

Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Robert M
Date: September 20, 2023 10:56AM
Clay,

A joint owner of a financial account isn't the same thing as a Power of Attorney. Far from.

This site explains what it means to have a joint owner on a financial account:

[www.jelkslaw.com]

A Power of Attorney is far far more than joint ownership of a financial account. This site explains the differences:

<[www.sharpeplanning.com];

All of this stuff is covered during estate planning. It sounds to me like you and whoever wants to do these things needs to speak with a reputable experienced estate attorney. I'd definitely speak to one ASAP.

Robert
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Ombligo
Date: September 20, 2023 10:57AM
as others said, just make it a joint account. No other legalities are involved.

However - do NOT make any credit card accounts joint. If you do, you are then responsible for paying them off. Have them make you an authorized user, then you can use the card to buy what they need without incurring the debt.



“No persons are more frequently wrong, than those who will not admit they are wrong.” -- François de La Rochefoucauld

"Those who cannot accept the past are condemned to revise it." -- Geo. Mathias

The German word for contraceptive is “Schwangerschaftsverhütungsmittel”. By the time you finished saying that, it’s too late
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: mattkime
Date: September 20, 2023 11:06AM
What Robert said.



Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: NewtonMP2100
Date: September 20, 2023 11:13AM
….power of attorney requires a lawyer…..joint is free…..as is TOD registration….



_____________________________________

I reject your reality and substitute my own!
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Diana
Date: September 20, 2023 11:36AM
Depends on what is needed. A power of attorney (PoA) allows one to step in financially if the person is incapacitated, either physically or mentally. However, it is only one step of several steps. For instance, I have PoA for my mom, but it doesn’t allow me to monitor her accounts without her express permission (in other words she gave me the passwords to let me check it online). I could not walk into the bank with the document and do anything without her there, or a lot of work (and would probably be denied access anyways). By putting me on the account, I now can deal with whatever comes up, and sign checks for her.

A PoA only would give me some rights, but often it might just take a death certificate as well to get anything done or something that legally shows incapacitation for mom. When bills need to be paid, I would have to pay it out of my pocket until the funds became available and that can take quite some time. If something happens I can now pay it out of her account.

I don’t need nor want to be on her credit card; that gets paid straight from her checking account. When we went to the bank to set things up, I specifically asked for checking only.

I may have some of my terminology incorrect; if that is the case, apologies. And of course, things can change depending on the state you live in.
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: clay
Date: September 20, 2023 11:40AM
It seems like joint ownership, while likely the easiest to setup, also brings with it a slew of potential downsides/liabilities for both the adult and child. Thanks for posting those links, Robert. The first one really paints a worst-case picture of joint ownership, which I think is good to keep in mind for sure. Power of attorney seems to be better situated for situations where day-to-day help isn't needed until and unless the adult becomes incapacitated. To me, on a surface level, that feels more appropriate in this situation. Joint ownership feels like the child that is signing on could be on the hook for more than they bargained for. And the adult could stand to lose everything, if things went south.

I agree that estate planning is likely the better way to take care of this situation. Due to some dynamics that are too complicated to get into here, it seems unlikely to me (as an outsider) that estate planning would be undertaken (unfortunately).
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Robert M
Date: September 20, 2023 11:50AM
Hi everyone,

And, just as another reminder, get your documents in order. Don't care how old you are, married or single, male/female/both/other. GET YOUR PAPERWORK IN ORDER! If nothing else, just the basics:

A. Will
B. Health Care Proxy
C. Power of Attorney

[www.aminovlaw.com]

I don't know a thing about that particular attorney but I do agree that those three are the most critical documents.

And, trust me, I can vouch for the importance of having a will. Like I said in a different thread, in my opinion, lack of cooperation in getting those docs in order is the equivalent of that individual kicking you in the cajones and giving you the finger.

Robert

P.S. Clay, glad I can help!



Edited 1 time(s). Last edit at 09/20/2023 12:10PM by Robert M.
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: hal
Date: September 20, 2023 12:03PM
We had my name and my sister's added to Mom's account when she was unable to take care of things herself. Didn't even realize the favor we did ourselves.

As a random note kinda in reply to Robert M's last post, the brother of a friend of mine died while on vacation in Chicago. He left no will. It was a two year nightmare for my friend. Make sure you have a will and don't die out of town!
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: NewtonMP2100
Date: September 20, 2023 12:08PM
….TOD…..bypasses will….the property goes directly to beneficiary…..



_____________________________________

I reject your reality and substitute my own!
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Acer
Date: September 20, 2023 12:51PM
Quick scan of the replies and not sure this is clear, but:

Power of Attorney CAN be used to act on the subjects behalf at any time, as long as the subject is of sound mind, etc. However, it ceases when the subject is incapacitated.

A Durable Power of Attorney does not come into effect until the subject is incapacitated.

Both powers must be exercised in good faith for the benefit of the subject, so you could be personally sued by creditors or family members if you defraud the subject.

Both powers cease when the subject dies, and then the estate executor takes over those functions. The executor will need death certificates to close accounts, etc.

As for bank accounts, you could use PoA to access the account. Joint account is much, much easier.

Reference focusing on POA: [www.investopedia.com]



Edited 1 time(s). Last edit at 09/20/2023 12:54PM by Acer.
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Diana
Date: September 20, 2023 12:59PM
Thanks for the clarification.
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Speedy
Date: September 20, 2023 02:23PM
Not about what works best at death but rather to quickly and easily transfer money while alive. I have a joint account with my 31 y.o. son. It has $100 in it. It is linked to our main account and also to his main account. Online we each can see our main accounts and the joint account but not each others main account. When I want to transfer money to him I go online and transfer it to our joint account. He then can go online and transfer that money in the joint account to his main account. This makes gift giving easy.



Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Robert M
Date: September 20, 2023 03:14PM
Acer,

Significant clarification. Someone who dies without a will aka dies intestate doesn't automatically have an executor or adminstratoryto handle his/her estate. The probate court must appoint someone to do it. That person will follow instructions provided to him/her by the court per the law(s) of the state about paying outstanding bills, finding heirs and distributing assets and property and managing other aspects of the estate. It can be a complicated, lengthy and difficult process. Even a simple estate can be problematic. It's one of the reasons a will is so important.

Robert
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: NewtonMP2100
Date: September 20, 2023 03:22PM
…if account registered asTOD….skips probate and goes directly to beneficiary…..



_____________________________________

I reject your reality and substitute my own!
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Smote
Date: September 20, 2023 04:21PM
Quote
Speedy
Not about what works best at death but rather to quickly and easily transfer money while alive. I have a joint account with my 31 y.o. son. It has $100 in it. It is linked to our main account and also to his main account. Online we each can see our main accounts and the joint account but not each others main account. When I want to transfer money to him I go online and transfer it to our joint account. He then can go online and transfer that money in the joint account to his main account. This makes gift giving easy.

My wife did that with the kids and it works very well when there is an emergency. They do the transfer through the phone banking app.



"Defending your own life when in immediate danger to me is a basic right of each person. " Lemon Drop 11/17/2023 03:10 pm

Heller, 554 U.S. 570 (2008) Private citizens have the right under the Second Amendment to possess an ordinary type of weapon and use it for lawful, historically established situations such as self-defense in a home, even when there is no relationship to a local militia.

"The conclusion is thus inescapable that the history, concept, and wording of the second amendment to the Constitution of the United States, as well as its interpretation by every major commentator and court in the first half-century after its ratification, indicates that what is protected is an individual right of a private citizen to own and carry firearms in a peaceful manner." Right to Keep and Bear Arms: Report of the Subcommittee on the Constitution of the Committee on the Judiciary, United States Senate, Ninety-seventh Congress, Second Session. U.S. Government Printing Office. 1982. Digitized September 30, 2008.

From the NYSRPA v Bruen "Today, we decline to adopt that two-part approach. . . . Despite the popularity of this two-step approach, it is one step too many. Step one of the predominant framework is broadly consistent with Heller, which demands a test rooted in the Second Amendment's text, as informed by history."
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: A-Polly
Date: September 20, 2023 04:45PM
One of the best things my late father did was add my brother and me as joint owners of his bank (actually credit union) accounts. We never accessed the money or even looked at any of the accounts until he became incapacitated and needed help paying his bills. It made everything so much easier later to have the money right there in our names and available when he died. We also had a POA which was useful at first but of course ended upon his death.
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: RAMd®d
Date: September 20, 2023 06:22PM
Can someone do a Clift Notes version of will vs living trust.

Someone mentioned to me that in CA, a will isn't sufficient for whatever purpose, and that a living trust is needed for what people think a will does.

I have no clue, and should get one soon.






I am that Masked Man.

All you can do, is all you can do.

There’s trouble — it's time to play the sound of my people.

Your boos mean nothing to me, I've seen what you cheer for.

Insisting on your rights without acknowledging your responsibilities isn’t freedom, it’s adolescence.

I've been to the edge of the map, and there be monsters.

We are a government of laws, not men.

Everybody counts or nobody counts.

When a good man is hurt,
all who would be called good
must suffer with him.

You and I have memories longer than the road that stretches out ahead.

There is no safety for honest men except
by believing all possible evil of evil men.

We don’t do focus groups. They just ensure that you don’t offend anyone, and produce bland inoffensive products. —Sir Jonathan Ive

An armed society is a polite society.
And hope is a lousy defense.

You make me pull, I'll put you down.

I *love* SIGs. It's Glocks I hate.
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Bernie
Date: September 21, 2023 05:06AM
WARNING

I was tied to my Mom and she bought (financed) a walk in tub and my credit took a hit.

Who would have thought.

old fogey smiley




Staunton, Virginia
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Robert M
Date: September 21, 2023 06:27AM
Bernie,

Details. Tied to your mom in what way? She would have had to affiliated you with the purchase in some manner for it to affect your credit, i.e. co-signed the financing for the purchase. Otherwise, it should not have impacted your credit (or you as a whole) in any manner.

Robert
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Robert M
Date: September 21, 2023 06:31AM
RAM,

No. A will and a living trust aren't the same and they usually serve different purposes. Nerdwallet covers the basics:

<[www.nerdwallet.com];

Questions like this are best answered by a reputable and knowledgable estate planning attorney working in conjunction with a CPA and certified financial planner.

Robert
Options:  Reply • Quote
Re: Financial question - Being added to a parent's bank account "just in case" - legal arrangements needed?
Posted by: Tiangou
Date: September 21, 2023 06:38AM
Durable power of attorney helped us to pay my mom's bills for her when she was hospitalized for a bypass.

...Upon receipt of the paperwork, one of the banks tied her investment account to mine so I have to take care when looking at my account statements because the balances are the combined balances with my mom's. (Accounts and tax documents are still separate. It's just their method for showing the accounts online and their monthly statements combine all of "my" account data.)



Options:  Reply • Quote
Sorry, only registered users may post in this forum.

Click here to login

Online Users

Guests: 299
Record Number of Users: 186 on February 20, 2020
Record Number of Guests: 5122 on October 03, 2020