Adding Child’s Name to Parent’s Account – Part 1

In this week’s blog post, I address a question we encounter often in our elder law practice.  Should an elderly parent add a child’s name to their account and if so, how can or should it be done?  Mom is having difficulty handling her finances, paying her bills etc. or maybe she just would rather not do it any longer and is happy to have her son take over the responsibility.

In order for me to write checks on her behalf or move money from one account to another, I need to be authorized to do that.  I need the financial institution to allow me access by “adding” me to the account.  But, what does that actually mean?

Legally, there are two ways to provide such access.  One option is that Mom can designate me as a co-owner on any accounts she chooses.  A second option is to execute a power of attorney allowing me to access the account(s) as her agent.  She can do this by way of a power of attorney in which she can specifically choose the account(s) or she can execute a power of attorney that allows me to access any and all accounts that she has.  The written document – a power of attorney – must, however, be specific enough.  For example, if she allows me to act as her agent with respect to her bank accounts, that doesn’t cover her brokerage accounts – unless her document specifically provides for that as well.

There are differences between these two options.  Each has its pros and cons.  Many people, bank employees included, do not understand the difference.  “Adding my name” to an account carries with it other ramifications.

Next week I’ll tell you what I mean.