Put my name on parent's bank account or power of attorney?
February 10, 2013 7:22 PM   Subscribe

My father would like to add my name to his bank account in case of his medical emergency or death. I'd prefer to just take power of attorney as he has a lot of debt. Thoughts?
posted by jander03 to Work & Money (14 answers total) 2 users marked this as a favorite
Seems like a bad idea. There are plenty of legal processes to deal with emergency and death.
posted by sycophant at 7:49 PM on February 10, 2013

In Australia (former bank teller talking) POA ceases if death occurs. So being a joint holder would be more beneficial. That way you could still access the account.

However as sycophant points out, people die all the time, so banks have procedures in place to deal with the funds accordingly.

If it was a partner, I would say always go joint, but for a parent or other relative, POA is probably safer.
posted by Youremyworld at 7:51 PM on February 10, 2013

Having your name on the bank account as a joint owner will not affect you with regard to any of his OTHER debts. If, somehow, he has an obligation to the bank on THAT account you may be liable. That would only occur if the bank will honor overdrafts. You can check on that and specify that they not extend that credit.

Many jurisdictions and banking systems have a "payable on death" arrangement which is not in effect during the owner's lifetime, i.e. you can't withdraw funds while he's alive. This is even safer in terms of potential liability for overdrafts.

Banks do have procedures in place to deal with funds after the death of the owner, but unless you are in some way named on the account it is generally a longer, more complicated process, usually a probate. Quite often the funds are needed almost immediately for funeral/burial costs or the like. If there are not other arrangements made then having immediate access to his bank account is probably a good solution. As stated, powers of attorney cease at the death of the grantor of the power, making them useless in solving post-death problems.
posted by uncaken at 8:05 PM on February 10, 2013 [1 favorite]

I would like to diplomatically point out that although the others who have replied above are using the correct words (POA, POD, estate, probate, etc.) I believe you would be well served to contact a lawyer about a question like this. IANAL, nor a relative or friend of one, I'm just saying it might be wise.
posted by forthright at 8:13 PM on February 10, 2013 [2 favorites]

Another thing to consider (US-centric): a friend who receives social security payments due to a permanent disability recently faced losing those payments because she was a joint account holder on her mother's account (for pretty much similar reasons to the one you mentioned), because those counted as her assets under whatever rules social security uses.

If you think you might want to use any needs-based services (anything from foodstamps to student loans to FHA loans; I don't know where you are in your own life), you probably do not want to be a joint account holder on these accounts so that they are not your assets.

happily, my friend was able to work things out and did not lose her benefits even temporarily
posted by jepler at 8:16 PM on February 10, 2013 [2 favorites]

In the US and Canada, power of attorney ceases on death. Uncaken's comment reflects my experiences with both my (divorced, living in different countries) parents and it would have made my life easier if my name had been on their accounts, even as "payable on death" because I had to front money and get reimbursed (and I was the Administrator so I made sure I was reimbursed, but I was also lucky enough that in both cases there was enough in the accounts and other assets to pay all the creditors and still disburse additional funds to beneficiaries. It doesn't sound like that's guaranteed here.)
posted by gingerest at 11:06 PM on February 10, 2013

I would agree your father should probably have a consultation with an attorney experienced in estate planning and elder law issues. [NAELA lookup] This can be a complicated area and if there are assets that your father can protect he should be doing that, anticipating claims against the estate. Doing it wrong can be as useless as doing nothing.
posted by dhartung at 11:14 PM on February 10, 2013

I'd just like to add that in addition to all the possible legal and financial ramifications that others have pointed out here, your father did ask you to do this. Even if you think his judgement is failing, it's very important to take his wishes seriously. As we get older, it becomes more and more important that we feel that the people around us not only love and care for us, but respect us. If you don't want to do it his way, please be very clear to him why, and emphasize that it has to do with how you feel, not simply that his idea is wrong.
posted by kestralwing at 2:58 AM on February 11, 2013

Yes do it. It will make bill paying much easier if he becomes incapable. Also ( US Centric) as a joint account the assets are yours upon his death and do not have to go through probate.
posted by Gungho at 7:48 AM on February 11, 2013

One thing that might be important:

If your father dies, you will have to prove to the bank that he is dead, death certificate, etc. They may not release the money immediately.

You will need to usually pay for the funeral up front.

This is the reason a lot of elderly people do this.
posted by corb at 8:24 AM on February 11, 2013

Having your name on the bank account as a joint owner will not affect you with regard to any of his OTHER debts. If, somehow, he has an obligation to the bank on THAT account you may be liable.

While this is true, my unfortunate experience has been that banks, etc. sometimes mistakenly link names past just the one account you may have (I had to dispute an account on my credit report that I never had anything to do with, just because the bank linked my name with my ex's on a credit card he opened after we broke up). For a while I was getting collections calls at my home number (where he never lived) because they assumed we were still linked.
posted by Pax at 11:23 AM on February 11, 2013

I was talking to a friend (in the US) a few days ago who recently lost her mother. One of the things my friend told me was that her mother added her to the checking account before she died and this made everything a whole lot easier. My friend can now pay for the funeral, pay all the bills on her mom's house, pay the lovely caregivers who helped her mother, etc. until the estate gets figured out.
posted by mareli at 11:44 AM on February 11, 2013

You can look into payable upon death. Meaning you get access to his bank account upon death. For emergency, yea, you need POA or your name has to go on it. I am trustee to my dad's estate and he put me as joint on his bank accounts, IRAs, etc. now in case he gets incapacitated and I have to pay his bills.

Get a trust w/ specifics laid out stating his debts will be paid from HIS account upon death.
posted by stormpooper at 12:10 PM on February 11, 2013 [1 favorite]

My Mother did this for me with her checking account. However, the account needs to be Joint Tennancy With Right of Survivorship. Otherwise if your Father passes they can freeze the account until probate is over. I really appreciated my Mother doing this for me. I could write checks when she became disabled and then I could still settle her accounts after she passed. I've encouraged all my friends to do this with their parents if they don't have Power of Attorney.
posted by PJMoore at 12:12 PM on February 11, 2013

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