Co-Signer on Wealthy Parent account affect aid ?

<p>We have a crucial problem looming ahead with my Mother-in-law having mini - strokes. She has a very good pension and stock account where her checking account is linked. Because she is 88 and becoming more frail, her lawyer recommended that her S ( the one in town ) , my H , signs a paper where he is added to the account . </p>

<p>Our income is low - we live on my H's income from his job - and therefore , our D gets a good financial aid package , a lot based on needs. </p>

<p>There is no way my Mother-in-law can pay her tuition as her income goes to paying her own supplemental health insurance policy, her mortgage and she also has many other children ( she hopes to leave a little when she passes away ) .</p>

<p>Does anyone know if my H is added to her checking account - will the capital gains ( if any ) , her SS check , and pension , be reported as OUR income ?? This would be very disasterous if it did .</p>

<p>Make sure the attorney reviews the account card with the bank. This contract establishes the legal rights and responsibilities of the account holder. Account relationship agreements will vary state to state , bank to bank. As such, I am not giving legal advice that you should rely on (other than to see a lawyer familiar with the laws of your state).</p>

<p>From an FA standpoint, your H does not want an ownership interest in the account. No joint account, not a joint tenancy with rights of survivorship account . Maybe not a rights of survivorship account at all since she is 88 and in failing health (which is what the bank will suggest most likely to avoid probate issues). He simply wants to be a co-signor on the account. No ownership. </p>

<p>Take the card to the lawyer before signing and explain the circumstances, if you have ANY questions about the nature of the relationship being established. Remember that the new accounts person at the bank is usually (sometimes) not that experienced an employee. An ounce of prevention (in this case, half an hour of attorney time), may save you plenty of pounds.</p>

<p>edit: I have re-read your post and started thinking about granny's health. Get to a lawyer now, one versed in estate planning. Granny may soon lose the ability to contract at all with her mini-strokes, or her competence to contract may be challenged. A trust as iderochi said may be the proper vehicle to employ , or in Texas we have a Durable Power of Attorney that can withstand later incompetency. Both need to be addressed immediately. Not for FA. For your MIL.</p>

<p>Curmudgeon, you are right on point. Easydoesit, you also might want to investigate the possibilty of setting up a formal formal trust, with your husband as trustee and MIL as beneficiary. A good estate planning attorney (not your MIL's lawyer) should be able to guide you through this process without too much difficulty.</p>

<p>easydoesit - altho I can't speak to the legal-beagle details as curmudge has done for you, I just want you to know that we have a parallel situation. DH is the trustee for a family trust (as lderochi suggests) and the assets there, which benefit his mother, are not a part of ours at all; different SSN (or tax ID) for example. He is also the "second signator" (I don't know the correct term) on an account which is not part of the trust; but again this is in her SSN. Your H should surely consult an elder lawyer/estate attorney. If the current accounts are not of the right type, it can be changed.</p>

<p>You can save money by going through the bank. Having a co-signator on an elderly person's account is fairly common. They'll be able to talk over the various options with you and set it all up, usually at no charge.</p>

<p>Banks also have people who can help with estate planning, although you may also want to consult your own attorney for any extensive planning.</p>

<p>My mother had a checking account. She and I held it jointly but she was the one who declared it on her income taxes (she was elderly and subsequently died). We also had a situation before he death where we had conservatorship and all of her assets were governed by ME...but for HER use only. Even though my name was on her accounts, the assets were hers. Now...after she died we had a different situation because we did inherit her assets (what was left of them after her care). But in our case, we would not have qualified for need based aid anyway.</p>