“Please, please do not get you name on your parents account, you need to be a DPOA or trustee to write check or make investment decision for them. In addition to the complication mentioned, God forbid if you die before them, your siblings or family will face a total mess and it might take years to clear it out.”
I was joint owner on my mother’s checking account, and am wondering what it is that I should be concerned about. She died six months ago, but having access to that account allowed me to sign checks under my name. I used the proceeds to pay funeral expenses and ongoing house bills. Have I exposed myself to some liability?
The total balance at her death was $40K, which has been spent down on funeral, property taxes, utilities, legal, etc.
@CT1417
Not of your concern, that is before your parents die, after the passing of both parents, their assets/account is reverted to their ESTATE and if no proper arrangements you cannot put your name on it.
What I was describing was before the parents had passed away and with their consent, you may put your name on the account, but it is not advisable. Had you been the joint owner all along, the money in the account is YOURs to begin with, so it does not matter.
This stuff is so confusing. When H and I visit with the lawyer we think we understand. In fact, for a brief moment in time we DO understand. But once we step away and time passes, things are not completely clear and we have to ask, yet again, for an explanation.
I want to make sure I’m not misleading anyone. My parents have had a revokable living trust since 1990. My sister and I have been successor trustees on their original trust, all it’s restatements, for my mother’s survivor trust and her most recently reformed survivors trust. We are listed as dietz TTE and sibblingdietz TTE. Since this has been the norm for so long I was using ‘my signature’ while meaning ‘my signature as TTE’. Thank you @artloversplus for clarifying. It is so easy to make a mistake.
My name has been on the savings account for almost 10 years. My sister has been on checking for a couple. Like I said, SIL had no problems handling MIL’s accounts this same way. I hope we don’t either.
Maybe it has to do with amount of money and complexity of estate? They only have a house that will sell for less than $100k, a piece of land that we are going to try to keep and about $200k in various accounts. Right now, we three siblings are doing well with this stuff.
@artloversplus, I have been on their account since either 2012 or 2014 when mom started struggling with the checkbook and dad has had very poor vision for a long time. I have also been listed as their DPOA (and MPOA) and I am the executrix on the will as well. Don’t know if this matters or not but I certainly don’t want to do anything that would cause issues after the fact.
I don’t quite understand what art lover is saying, either.
My mom is 90 and has no health issues at all. I am a joint owner on all her accounts, along with having a DPOA. I am also the beneficiary of her trust.
If she should become incapacitated, I need to be able to handle all her affairs. A DPOA was not good enough to be able to do that. I have to be on the accounts and had to sign several documents and get them notarized to be able to do that.
I definitely do not understand why artlover is saying not to be a joint owner (and will not be taking his advice.) I will stick with what my mom’s attorney advised.
I had no trouble with Fidelity or Wells Fargo when I was an estate executor. But I had the proper testamentary letters when I contacted them. Stuff didn’t all happen instantaneously and without paperwork, but I didn’t expect it to. That, of course, is a true estate situation, and not the POA questions that were being asked above.
Regarding joint checking accounts, when the other person dies, that money legally becomes yours. It isn’t really part of the estate any more. Not that you can’t pay bills with it related to the estate if you want to, but the money isn’t coming out of estate funds, it is coming out of your own pocket. It isn’t part of what is considered when splitting up the assets among any heirs named in the will. There is room there for accounting fudging or misunderstandings with the other heirs, for sure.
If you are co-signer of your parent’s account, you do not need a POA to access their account whether they are alive or not. Basically, it is YOUR money and you can see how to use it as you see fit. The problems of this arrangement are:
If you die before your parent(s).
If you get devoiced.
What I was pleading is that DONOT add your name to the account if it is not done before.
or
If you are afraid of the above repercussion, remove your name from the account and replace it with POA. YES, you can sign checks if you are POA of your parents account, you do not need your name on the account. You sign the check like “artloverson, POA”
BTW, gift tax does not kick in until the total amount in all accounts is over 150K.
I had a challenge with Wells Fargo not wanting to issue a medallion signature guarantee for me, but one of the bank financial advisors knew me so took care of it for me when we needed this to transfer the stocks into a different account (I was executors and had all the letters of testamentary and was trustee of the trust). I had my name on my dad’s bank accounts so was able to continue to pay all bills. as needed (funeral expenses, utilities, home repairs, oil tank replacement, etc) as described above. Even though my name was on two checking accounts with my dad and was a reasonable amount of money, I gave my idiot brother his share (as directed in the trust) even though legally I didn’t have to. I did it because I felt it was the right thing to do. He was still awful and ungrateful, but I digress…
As for the letter @snowball’s dad wrote, snowball knows her mother better than we do, and snowball has a lot on her plate to deal with right now. I think its her call how she chooses to deal with it, and critical comments here about her thoughts on the different ways of handling it are unhelpful, and a tad insensitive at this difficult time.
Yes, Joint Account is subject to inheritance tax, however, the estate or inheritance tax does not kick in until the account reaches $11 Million and some change for 2019.
Federal- yes. Don’t forget about state estate or inheritance tax. The thresholds can be much lower. (Think art is in CA - no issues there with estate tax. Everyone wants to work in WA, shop in OR, and die in CA ).
“I’m blessed. All the above assumes a high level of trust, respect and fiduciary responsibility exists between and among those with vested interest. I have one sister, we work relatively well together.”
Yes, that certainly helps. Also why it is probably best not to give advice to others who may not have that kind of family situation.
I think fudging stuff and impersonating parents can open one up to some real headaches - and worse, legal issues. Family & money can cause huge problems even in families who have had good dynamics in the past. Please be careful about what you do, follow the letter of the law, and consult attorneys who are experts in estate planning. Additionally, as we see here, best practices can differ from state to state. A good attorney specializing in estates will know what is best for your situation.
Also, in terms of financial institutions locking accounts, requesting docs, etc. they do so for a reason. They have fiduciary responsibilities as well. Things like locking accounts and voice recognition software is intended to protect clients’ assets. Those should be seen as strengths not weaknesses even though they might result in temporary inconveniences. If you are having trouble with financial institutions, those estate lawyers can help with that, too.
“I wish we had hired an attorney, though, instead of trying to figure it out ourselves. It would have been worth it.”
Yep. Best to consult with lawyers on this kind of stuff than take free advice off the internet.
@ My condolences, @snowball. Take care of yourself first. This stuff can wait a little if needed.
Re: Being joint owner of my mother’s checking account.
The bank manager explained to me that the money would become mine upon the death of my mother, but my mother trusted me to the do the right thing. And I have, so far, at least!
I was POA on her brokerage account, which allowed me to log in with my SSN/my voice recognition, and process many transactions. I cannot recall if I could transfer money out, but I know I transferred it in. I handled her IRA RMD and tax withholding and could buy & sell on her behalf. POA ended upon her death, and I then started the process to have the money distributed to myself and my siblings. (We each had to open accounts, fill out some forms…I have already forgotten, but it was fairly effortless.)
I am guessing that if I had been POA on her checking account that my access would have terminated upon her death.
It took a few weeks to obtain the EIN that allowed me to open an estate account, and I would have missed the year end property tax payment if forced to wait for the estate account to be opened and funded. Since the brokerage accounts were TOD, and it took months to clean out and sell the house, my siblings and I ended up having to fund the joint checking account to pay ongoing obligations, as there was no other source of funds.
I am fortunate that we all got along, and I guess my siblings are fortunate that I didn’t run off with the money in the joint checking account!
I am on my Dad’s bank account which is also the Trust Account. I have already made a small disbursement to the beneficiaries of the Trust but I’m planning to deplete that account with all of the final bills. There is also a separate bank account with more money in it where I am solely on the account with the deceased. I will be held responsible for any tax owed on the measly interest on the account going forward and I can live with that for now.
I would like to ask what may be a really basic question.
What is the purpose of a trust? That question probably isn’t fair b/c there appear to be many different types of trusts.
I asked a lawyer if my mother should establish a trust a couple of years before her death, and the response was that the cost to establish the trust would be the same as the cost to go through probate. Only the house had to pass through probate, and it has been fairly hassle-free and relatively inexpensive. ($1200 to NYS for probate filing fees and maybe another $800 or so to the lawyer. I think we need to close out the probate now, so probably more legal fees, but they have not been onerous.)
Do people establish trusts simply to shield assets from Medicaid? I have heard that probate is very expensive in California, but other than states where probate costs are high, what are the benefits of having a trust?
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