Adding my name to parents' bank accounts- pros? cons?

[elektra]

Are there any cons to having my name added to my parents' checking accounts?
My dad wants me to be able to write checks on his behalf from his account if needed.

Are there any downsides to this?
I imagine I would be on the hook with creditors if he somehow went on some spending spree?

Outside of that, I think it's mostly positive for all of us, right?
I could pay his bills if he become needs help managing finances, becomes incapacitated or dies?

[scrooks]

There may be some tax implications? But I am not sure....

[StantonHyde]

DH did this with his mother. Didn't change anything tax wise etc.

[AnnieW625]

I would do it, esp. with your circumstances due to your mom's illness, and if something similar were to happen with your dad or he were to get sick. I would also ask your dad that you be made power of attorney.

[arivecchi]

If they are just plain vanilla bank accounts without any credit feature, I don't see how you could be on the hook for any large liabilities (other than potential overdraft amounts and fees) - depends on the type of account. My only hesitation would be that you could then be dragged into legal proceedings as an account holder of that account - which may be unlikely but something to think about. Might not be a bad idea to run it past your accountant.

[Mikey0709]

I think if one person dies - the account gets locked up.... so you wouldn't be able to write check AFTER he dies. Just make sure it's not your money you want to access. You would have to open an ESTATE account to pay bills, etc. There are some implications around that - so i would check with the bank.

ALSO - the values in the account at death would get included in the estate - - for tax purposes. SO technically I guess you could say it was 1/2 yours for estate value?

[KLD313]

I think if one person dies - the account gets locked up.... so you wouldn't be able to write check AFTER he dies. Just make sure it's not your money you want to access. You would have to open an ESTATE account to pay bills, etc. There are some implications around that - so i would check with the bank.

ALSO - the values in the account at death would get included in the estate - - for tax purposes. SO technically I guess you could say it was 1/2 yours for estate value?

Yes, I was thinking it could complicate things Estate tax wise. My mom's atty advised her to give me power of attorney upon her death so that's what we did.

[daisysmom]

We have signing privileges on my FILs checking account. There is no income tax hit (as you aren't an account holder). When someone dies, how it is treated depends on a lot of things but you aren't supposed to write checks from the account then until the estate proceedings have started. We are going through this with my MIL who passed away in Nov (my FIL kept writing checks on their joint account).

[crl]

Does it have any implications for Medicaid eligibility for nursing home care? I don't know, I just have this vague memory that co-mingling funds can cause issues. I might be totally wrong.

Catherine

[MizMojoLaveau]

:yeahthat:
I am foggy on why, I think this,
but I vaguely remember an atty. who spoke at our daycare regarding estates/trusts and child issues said this is what a lot of people end up doing with aging parents, but you should never to do this....
sorry, I know that is not much help
just wanted to throw it out there that it might have some drawbacks...hopefully someone else can add to this.

[minnie-zb]

But you wouldn't be combining the money. It is still the parent's money. She would be able to write checks on their checking account.

My mom had this ability on her mothers account. It worked well. It did not have any tax implications for my mother. It had zero impact on her credit score. My mother was not liable for any of her accounts.

[elektra]

But you wouldn't be combining the money. It is still the parent's money. She would be able to write checks on their checking account.

My mom had this ability on her mothers account. It worked well. It did not have any tax implications for my mother. It had zero impact on her credit score. My mother was not liable for any of her accounts.

I think this is more of what we want to do if possible.
My parents have a living trust set up, that I believe deals with the actual distribution of their funds between my brother and myself, so we wouldn't be actually putting any money in my account.
I think it does make sense to talk to our accountants though.

[MontrealMum]

Does it have any implications for Medicaid eligibility for nursing home care? I don't know, I just have this vague memory that co-mingling funds can cause issues. I might be totally wrong.

Catherine

AFAIK, no. My mom was on my grandma's account and she went into a home and was eventually under Medicaid. I'm a little unclear on the details and when the estate was formed, but it didn't affect my grandma's eligibility. My mom had POA as well.

I am now on my mom's account and it hasn't really affected anything. Since I live in another country it makes it easier, sometimes, to give each other money. The checks she sends me clear instantly, for example, since my name is on them as well. Last year when I went down to take care of her after her accident being on her account made it much easier for me to do things for her as I'd just take one of her checks to buy groceries or whatever. It does not affect my credit score and has no tax implications for me.

[Binkandabee]

It's better to get a Durable Power of Attorney. Cleaner, no risk of attribution to you, no risk of your parents being subjected to your creditors, no fighting with your brother as to whose it is at their death, it's just a much better way.

I have to ask, though, if they have a trust, shouldn't this account be in the name of the trust...and therefore the trustee would be the one to take over when your parents can no longer act?