This is one of those things I've always just asked my dad about.

July 8, 2009 6:54 PM

Should I open a joint checking account with my ailing dad and his wife?

My dad remarried after being widowed when my mom died. He has a prenuptial agreement and a will that makes a dividing line between how his assets will be handled when he passes away: what he made during his first marriage will go to me, what he made during his second marriage will go to his current wife. He has kept his bank accounts and other financial assets from his 1st marriage in his name only while his wife has kept her own bank accounts under her own name only. He covers all the maintenance/insurance costs for their house (which is willed to me as it was purchased/paid off during his 1st marriage), she contributes by buying groceries and paying for various bills such as phone and cable. All good so far.

Now he's in failing health (after a series of strokes) and he would like to set up a new joint bank account with his wife in order to ensure bills get paid as he's concerned that he might soon get to a state where he is physically unable to write checks by himself. He and his wife plan to fund this joint account with deposits from their individual bank accounts. The joint account would be used to pay for regular household expenses (homeowners insurance, power, water, phone, cable, and petty cash) but not a mortgage.

My question: will the creation of this joint account cause a problem with the assets (savings, other checking, house, stock, bonds etc) they have so carefully tried to keep separate all these years? Does it matter what kind of bills are paid from it? Would it be better for the joint account to be set up so only his individual accounts fund it?

He and his wife also want my name on this joint checking account. I'm not expected to contribute anything to this account, his wife wants my name on there "in case something happens to both of us" (meaning her and my dad), my dad wants my name on there just because he wants my name on there. Will that faff anything up in regards to taxes?

We all live in California. We all like each other a lot and are falling over ourselves to make sure the other person doesn't get screwed. I believe he's consulted the attny who wrote his will but he's also suffering from a lot of confusion post-stroke and thus it's difficult to get a reliable answer or feel confident that he clearly understood what was said. His wife is awesome but has zero interest in financial details. I understand you're neither my accountant nor my lawyer but I'd like to get a read on this while I'm waiting for those two to call me back; your input will help me ask more intelligent questions from my hired pros.

posted by anonymous to work & money (9 answers total)

Get a lawyer. No advice you receive from here is worth taking because of the potential risks you take by taking non-attorney advice.

Spend a few hundred dollars, consult a lawyer, save a few thousand dollars.
posted by hal_c_on at 7:00 PM on July 8, 2009 [2 favorites]

Years ago when my grandmother was dying my mom was added on her parents' checking account to be able to help my grandfather out, pay bills, etc. When my dad's great uncle had a massive debilitating stroke, my dad (later the executor of his estate) was put on the checking account for the same reason. No one got screwed, it just meant that if need be, one of my parents can sign a check to take care of business. This is a really common thing for families to do once parents start aging.

Really, it's not much different than getting my first checking account at 16 with my mom on the account. Nothing came in her name, her name wasn't on anything, but just in case, she could step in.
posted by moojoose at 7:03 PM on July 8, 2009

I should have also added, maybe if you're dad is concerned about someone being able to take care of things that he should just add you and not his wife?
posted by moojoose at 7:05 PM on July 8, 2009

Talk to the bank. My mother was added basically as an authorized signer on my grandmother's checking account when her health started to decline. This made a lot of things MUCH easier in the last days and after she died.
posted by Lyn Never at 7:11 PM on July 8, 2009

Members of my extended family have always been on each other's accounts. The name is not always on the printed check but they and their signature are on record at the bank. There has never been any kind of issue or problem and it has been useful in the case of emergencies or incapacitation.

This is very common, I see it in my professional life as well, and not just with older people.
posted by readery at 8:41 PM on July 8, 2009

If your father's main concern is bill payments etc. if he gets sicker, perhaps a power of attorney would be a better solution? This is a legal document giving another person authority to make financial decisions on his behalf should he become unable to do so himself. (In Canada, at least, this is different from a POA for personal care, which specifies who should make decisions about your *health care* should you become incapable.) Either way, you'll need to consult a lawyer, but this may be another possibility to look into.
posted by TheLittlestRobot at 2:50 AM on July 9, 2009

Is there an overdraft availble on the account? It seems that if your name is on the account and you woudl be personally liable for any overdraft or fees related to say over-drawing. btu otherwise there wouldnt' be much of an issue.
posted by mary8nne at 3:42 AM on July 9, 2009

Talk to a lawyer. Commingling ones finances (even in name only) *can* mean that you can be responsible for their debts upon their untimely demise.

In this case, I would expect that being an authorized signor would be no big deal, but being a co owner of the account might be.

(But I like the power of attorney thing, as well as setting up a living revocable trust and other more precise legal tools, for dealing with these types of problems.)
posted by gjc at 5:10 AM on July 9, 2009

Yes, it's not that rare that being a joint owner can cause more hassle than it's worth. If you have the option, just be an authorized signer.

This is a good time to point out that your parents really really need to get their financial powers of attorney in order, and their Advanced Directives, (California-speak for living will plus medical power of attorney.) Everyone needs these things, including you, but your parents especially.
posted by small_ruminant at 4:46 PM on July 9, 2009