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My LO added me to all of her financial accounts when she was getting everything in order, including POA, her will and other documents together. I have financial and medical POA. I manage all of her bills, but she does have a checkbook. She has started a new habit (in the past two years) of writing a check without an amount, but with her signature and a date. Sometimes it includes the name of the intended recipient. Other times not. With ‘check washing’ scams that might not even matter. She’ll write these checks in advance of a service being provided, such as lawn maintenance or her haircut, etc. I find the signed blank, checks in various places, including her wallet, the side pocket of her purse, the glove compartment of the vehicle, and on the countertop at home. When I find them, I’ll show them to her and tell her that is not a safe practice and she (at the moment) tells me to shred them. I cannot curb this new behavior, and I am very afraid someone will find a check, fill in the amount and wipe out a good portion of her checking account. My solution is to open up a new checking account with a low balance. She can continue to write checks, but her entire primary account funds won’t be in jeopardy of this risky behavior.


I do not want to take away her ability to write a check. I’m trying to maintain whatever semblance of independence I can keep for her for as long as I can.


I guess my question is two-fold.


One. Is that a feasible possibility with the paperwork in order? Will I be able to set up an account with a lower balance with its own set of checks?


Two. I read somewhere in passing, and it may only be in the UK, but could the bank actually freeze the account if they find out a joint account holder has dementia? I have POA. I’m a joint account holder. The account is in both of our names. Is that something I need to worry about? She set things up this way so that I could handle the finances as if I were her in the event, whatever might happen, including, but not limited to possible dementia.

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UPDATE: The bank understood my dilemma. We determined the best option would be to open a money market savings account and set it up the way the joint checking account is set up with right of survivorship. In order for that to happen, I had to take my LO to the bank. Of course, she looked to me for guidance, but the banker understood the situation and had looked at the checking account, and said it was obvious there was not abuse or anything going on. I simply wanted to protect my LO’s finances from fraud. I keep the checking account balance low (under $500)and her exposure has greatly diminished. There are no checks or debit cards associated with the money market savings. It is simply attached to checking so that I can transfer funds, as needed, into checking. If LO had not gone and to make the request, all funds would have gone to probate upon their death. I know that’s not the way they wanted the funds to be set up, but I was ready to put it in the F it bucket, as long as the funds are protected for her use until the end of life, I don’t care if the bank account is empty at the end of her life as long as the funds were used to take care of her and not stolen by someone taking advantage of her. Thank you all for your input and suggestions.
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AlvaDeer Oct 2023
PennyBob, thanks for your update to let us know how you handled this. People can often get very good guidance by talking to bank officers.
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We use a credit union, not a bank. How would they ever find out? He rarely wrote checks anyway, since I paid all the bills and usually put things on autopay (utilities, credit card). Once he stopped working (early retirement), he never needed to write a check. After his death, our elderlaw attorney told me not to remove him from the checking account for two years. That was the because if he were to inherit money from someone (unlikely) or was the beneficiary on someone's life insurance there would be a place to deposit the money.
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Hello!

Why wouldn’t you just take your Mother off any Financial Accounts like yesterday, today, or tomorrow?

If your Mother has been diagnosed with Dementia, then she’s deemed to be incompetent- Obviously.

The only person that should be on her & your Bank Account is- YOU!

All of your mother’s money can go directly into your bank account & you can do whatever you want with it.

You’re your Mother’s he POA & she’s incompetent,
This is the Dementia Law in Michigan.

I wish the money for people with Dementia would go into a Trust instead, not an individual’s Bank Acct,

However if the Bank doesn’t ask, then they don’t know.

Your greatest concern- should be that your Mom could possibly take money out of her account, write a check, use her Debit or Credit Card with the assistance of someone else.

Do you have an Attorney?
You can always ask someone at your Bank or go to another bank.
Just ask them about your Mom having Dementia & being a joint Account Holder, right?

My Mother has Dementia too, but my Father is still alive & competent.

Always interesting to find out other laws in different countries.

Let us know.

I hope some of this helped you,
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AlvaDeer Sep 2023
Wow, this is, IMHO terrible advice. I hope our OP will get legal advice before attempting what you have suggested, Farah.

You cannot take someone's name off of their accounts. You can only act as POA, Guardian or conservator of someone's money but it remains their money in their name EVEN WHEN you control it. I served as Trustee and POA for my brother. He had NO CONTROL over his accounts as he GAVE that control to me. However the accounts remained ALL in his name, with me either as Trustee or POA, with me paying all bills and handling all things legally with a well written Trustee document and POA documents. HIS NAME remained on HIS MONEY until HIS DEATH when it was distributed by HIS trust and will to HIS beneficiary/ies.
The reason that Banks are so hard-bottomed about POAs is that people have the idea that when one is going to become incompetent a family member will swoop in and TAKE THEIR MONEY, which seems to be what you just advised.
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My Mom placed me on her account before POA was assigned. When I started writing checks for her, I put my name with POA after it. The bank had a copy of the POA which was on file and immediate. I never had any problem with the bank or people I wrote checks with. The whole purpose of DPOA is to be able to represent someone when they no longer can do for themselves. The only time I have heard a bank freezing an acct is when the person passes. At that time POA is invalid and the Executor needs to get a short certificate from Probate to carry on the financial duties.
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- Account freezes prevent transactions from going through in a bank or brokerage account. Essentially, money can be deposited into the account but no money can leave the account.

- Account freezes can be put in place by an account holder (in the event of a lost or stolen debit card), or the bank or regulatory authority.

- Freezes can occur for many reasons, including suspicious activity, suspected criminal activity, civil actions, or garnishments.

Read more here:

https://www.investopedia.com/terms/a/account-freeze.asp#:~:text=Account%20freezes%20can%20be%20put,%2C%20civil%20actions%2C%20or%20garnishments.
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When you take on the duties of POA one of the first stops is at the desk of a GOOD bank officer in the bank where your parent has their accounts. This person can help you set up POA accounts and tell you how to manage them and sign the checks correctly. Many people assume that the easiest and best thing to do is "put your name on it". This is called co-mingling, and it's a no no in the case of any substantial funds.

I would see an elder law attorney because merely adding your name to an account is NOT the way to do POA> You should be added as the POA with the documentation recorded and all checks should be paid out of the account signing as "my mother" by "her baby as POA". There are right ways and wrong ways to do this and MANY co-mingle accounts as you have done. This isn't the right way to go as the IRS can swoop in and empty think the account is yours, you can be accused of enriching yourself, your parent can be accused of gifting. You can't know WHAT in the world can happen if you do it wrong.

Go for a general hour of info with an elder law attorney on how to handle billing and how to handle accounts as a POA. Handle all issues with meticulous records of every penny into and every penny out of your parent's accounts on a monthly basis. Have a folder for each entity for which you pay bills with proper receipts and etc.
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PennyBob Oct 2023
The joint account was originally suggested by her attorney in preparation for any issues ahead. I keep everything separate and straight. I’m sometimes spending my money on her without reimbursement. LOL I NEVER SPEND HER MONEY ON ME.
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