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Benefits And Risks Of Being Put On Your Parents’ Checking Account

Sunday, March 16, 2014 - 3:59 PM
In this Sonoma Valley Sun Q&A with two California elder law attorneys, a reader asks about the risks of being put on his parents' checking account so he can write checks and take care of their account if anything should happen to them. The attorneys provide some useful general information about power of attorney forms, joint tenancy accounts and trust accounts.
7
Ken TuminKen Tumin5,471 posts since
Nov 29, 2009
Rep Points: 125,611
1. Sunday, March 16, 2014 - 5:14 PM
"You’ll have an easier time taking care of your parents when they need help if they put you on their checking accounts now."

Excellent advice.
4
ShorebreakShorebreak2,671 posts since
Apr 6, 2010
Rep Points: 14,501
2. Sunday, March 16, 2014 - 6:17 PM
This is an interesting alternative to what I have always prefered to do.  If both parents are both alive and in good shape mentally, why can't the one who is well take care of financial matters and after one passes, then put the adult child on the checking account to take care of any financial needs for the parent who is left.  I don't see any reason to do it while both parents are still alive and able to still handle things themselves.
2
paoli2paoli21,398 posts since
Aug 10, 2011
Rep Points: 6,129
3. Sunday, March 16, 2014 - 6:47 PM
In Michigan-
Never put your children on any of your banking accounts. Only put them on as beneficiaries. Get a Power of Attorney. If they are on your account and are in an accident, the parents funds can be taken in a lawsuit, if there is a bill your child owes, the account can be attached, if there is a divorce those funds are put in as the childs assets. 
You can get a POA for less than $100. In Michigan if the child uses the funds for anything but the parents there is up to 10 times repayment and up to 10 years in prison. They have to agree to be POA and sign a paper that they will only spend money on the parent or parents under penalty of the law. Unusual circumstances can be added like monthly copies of payments and bills be sent to other sons or daughters, a ledger of payments etc. You can pay them a monthly  amount if you want. Everything can be written into that POA. 

A copy of the POA is scanned into the computer under comments under your the account or accounts that they have POA over and the parent can change it at any time. You can have it start only when the doctor says you need it, you can have it start immediately, or just when you are out of town for the winter so the child can pay monthly bills. 
5
Ally6770Ally6770930 posts since
Jan 16, 2010
Rep Points: 2,706
4. Sunday, March 16, 2014 - 7:35 PM
After my father passed away my mother put me on all her accounts and safe deposit box access. I also had a springing power of attorney written up by our lawyer of which a notarized copy was provided to each of her banks. When she became very ill I was able to write checks for her care until the end. Len Tillem's advice was right on the mark. This all occurred in California..."Under California law, money in a joint tenancy account belongs to the person who put the money into the account, and is not actually owned equally among the joint tenants, although each of them have legal access to the money."
3
ShorebreakShorebreak2,671 posts since
Apr 6, 2010
Rep Points: 14,501
5. Monday, March 17, 2014 - 9:40 AM
Again as many of us are a society of the move it is too bad that all states do not have the same laws for things as important as this. 
2
Ally6770Ally6770930 posts since
Jan 16, 2010
Rep Points: 2,706
6. Monday, March 17, 2014 - 10:05 AM
This may be a good idea for a parent to put their child on your checking account for the reasons stated but what protection does the parent have? I have heard stories of parents appointing their child a POA only to have the child take advantage and drain the account, sell their home or worse.  Their child’s circumstance may change over time and they may become desperate for cash either through a divorce, bad debts etc...The intention may be well meaning but a parent has to be very aware and trusting of allowing someone else to handle their finances. I also agree with Ally that this is something that should not vary state to state. Protecting the elderly should be fall under federal guidlines.
2
FARFAR108 posts since
Feb 26, 2013
Rep Points: 386
7. Monday, March 17, 2014 - 10:43 AM
Wouldn't one think that by the time a parent becomes a senior, they would know which one of their children they could trust with this responsibility?  If they are so senile they cannot recognize this then they should probably be in a facility with others caring for them.
2
paoli2paoli21,398 posts since
Aug 10, 2011
Rep Points: 6,129
8. Monday, March 17, 2014 - 1:17 PM
The problem is not what we know, the problem is what we think we know and what we don't know that we don't know. 
3
Ally6770Ally6770930 posts since
Jan 16, 2010
Rep Points: 2,706
9. Monday, March 17, 2014 - 1:57 PM
You posting in "code" again, Ally or do I need to get my DD to translate for me?  :)
2
paoli2paoli21,398 posts since
Aug 10, 2011
Rep Points: 6,129
10. Monday, March 17, 2014 - 2:44 PM
Circumstances may change in a year and the availability of cash may be more tempting than the responsibilty one was given when their name was put on an account or assigned as a POA.
If a parent were to find themselves in a situation wanting to remove a person they selected is this something they could do or is assigning someone as a POA a one and done.
2
FARFAR108 posts since
Feb 26, 2013
Rep Points: 386
11. Monday, March 17, 2014 - 4:33 PM
Your post concerned me about my own POAs and I did some research on it.  It seems we should put a "date" on the POA or it will go on indefinitely until the grantor dies and the person named will be able to use it indefinitely unless a "Revocation" of the first POA is done by a lawyer.  I am not concerned about this for my own since I want the people to stay on indefinitely but our choice should not be made willy nilly for this person.  So the name can be changed but one must revoke the first POA in order to do so from the information I read.
2
paoli2paoli21,398 posts since
Aug 10, 2011
Rep Points: 6,129
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