The life and health circumstances with aging adults can change suddenly. They can find themselves hospitalized or debilitated in the blink of an eye. With some, dementia can set in and it becomes difficult to manage their finances. During such times… life goes on! Their bills need paid, they need groceries, the rent is due, etc.
As their caregiver, you need the ability to LEGALLY and IMMEDIATELY take over those payments to avoid a host of problems. Becoming a “signatory” on your parent’s banking accounts can save the day!
What is a signatory?
To make sure we’re all on the same page, lets clarify some banking jargon.
- Signatory or “Authorized Signer”:
This is someone who is authorized to sign documents on behalf of a particular account. With a banking account, they can write checks, make deposits and access basic info regarding the account. They CANNOT make changes to the account or close the account.
It’s important to note that if both owners of the account are deceased, your access is halted. The only way you can continue with access and maintenance is to be listed as the BENEFICIARY.
- Beneficiary:
Most people are familiar with a beneficiary. When the accounts are first set up the account holders are asked to choose the beneficiary, which is usually an individual or a trust. In the event of death, the assets in the designated account(s) are passed on to the beneficiary.
If you are listed as the beneficiary, you can continue to access and maintain the account after your parents passing.
- Joint Owner:
Being a joint owner or co-owner means that both owners have the same access to the account. As an owner of the account, either co-owner can deposit, withdraw, or close the account. You could have full access to every aspect of the account today, unlike a beneficiary, who can only do so after the death of the account owner.
One word of caution! Being a joint owner also opens you up to the legal liability as well. No matter who started the account or puts in more money, in the eyes of the law, you’re equal holders. You could be responsible for:
- Overdraft charges
- Debt collection
- Liens
- Judgments or garnishes
- Divorces
Because of this, most people choose to simply become a signatory.
Don’t forget the safe deposit box!
If your parents have a box at their bank they’re most likely storing documents like wills, trusts, power of attorney, car titles, etc.
You cannot access their box unless you have 2 things:
- YOUR name on the paperwork
- A key
But why do you need those documents? Worse case scenarios!
If your parent is hospitalized and sadly, you’re at a point where end-of-life decisions need to be made, you would need to provide the hospital with the Durable Power of Attorney documents to default care decisions to whoever that parent has chosen.
Hospitals and other institutions often require the ORIGINAL documents not photocopies!
Consider a situation where your parent is in a care facility and you need to start selling their assets to pay for their care. You can’t sell a car, motor home or trailer without a title! You need access to those titles to begin selling assets and providing the funds you require.
Two words: Probate Court
If you don’t have access to your parent’s banking accounts and safe deposit box you can bet this is where you’re headed. Each banking institution has different rules on Power of Attorney and what it will take to get your name on that account.
You’ll have to hire an attorney, go to court and establish that your parent is incapacitated, and you need access to their box and accounts. This takes time and can get costly. All the while, bills are piling up and your stress is mounting!
Good News! Becoming a signatory is a piece of cake!
I know this because I did it with my parents.
Over a lunch hour, my dad, brother, and I met at their bank. Dad explained that he wanted to add my brother and I as “signatories” on his accounts and safe deposit box. They quickly drafted the paperwork, we signed it and our “adulting” for the day was complete.
It took about 30-45 minutes but was worth it.
I encourage you to call your bank to get details on the process, but I can tell you it did not require an act of congress to make this happen!
I realize that everyone’s circumstances are different.
When it comes to money, emotions can run high and stubbornness, resistance, distrust, or old scars can rear their ugly head.
Becoming a signatory on your parent’s accounts, however, is a wise decision on behalf of all parties involved. This might be an easy request for some adult children, but a nerve-wracking hot button for others.
As someone who is in your corner, cheering for you, I challenge you to make this happen. Have the conversation with your loved ones and ask to take this next step. Ultimately, it’s up to you to get on board and prepare yourselves to navigate the journey!
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