Aging parents

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
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Topic Author
koditten
Posts: 18
Joined: Thu Jan 21, 2016 8:44 am

Aging parents

Post by koditten »

My father is getting up there. Still fairly sound physical and mentally.

He asked me to put myself on his bank account at our credit union. I did. I hope it doesn't bite me in the ass.

He has always been a "soft touch". He can not say no to anyone who is short on money and will easily go thru his monthly pension and SS money. Because of this, there have been some rather, how can I say this nicely?, lazy people who have been in his circle for years.

I'm a success. I have over an 825 credit rating.

After looking online at his banking history(now that I'm on the account), I see several overdraft charges on his credit union checking account. Fairly recent, too.

My worry is if there is any chance these over draft charges can bleed over to me and effect my credit rating. I am not the primary owner of the account, so I'm hoping that any of these issues will not reflect on my credit rating.

Anyone have an idea how this works?

Thanks

Kirk
RudyS
Posts: 2819
Joined: Tue Oct 27, 2015 10:11 am

Re: Aging parents

Post by RudyS »

koditten wrote:My father is getting up there. Still fairly sound physical and mentally.

He asked me to put myself on his bank account at our credit union. I did. I hope it doesn't bite me in the ass.

He has always been a "soft touch". He can not say no to anyone who is short on money and will easily go thru his monthly pension and SS money. Because of this, there have been some rather, how can I say this nicely?, lazy people who have been in his circle for years.

I'm a success. I have over an 825 credit rating.

After looking online at his banking history(now that I'm on the account), I see several overdraft charges on his credit union checking account. Fairly recent, too.

My worry is if there is any chance these over draft charges can bleed over to me and effect my credit rating. I am not the primary owner of the account, so I'm hoping that any of these issues will not reflect on my credit rating.

Anyone have an idea how this works?

Thanks

Kirk
Not sure from your statement about "primary owner" what the account is actually registered as. You should not be any kind of owner, just an authorized signatory.
dbr
Posts: 46137
Joined: Sun Mar 04, 2007 8:50 am

Re: Aging parents

Post by dbr »

I am thinking you should engage with your father's financial affairs via a clear Power of Attorney rather than somehow having an ownership (joint account). Maybe going the whole way with a durable POA and healthcare POA would be appropriate at this time.
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dm200
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Location: Washington DC area

Re: Aging parents

Post by dm200 »

Having joint ownership can have "unintended consequences". It is almost always "with survivorship" and overrides anything in the will.

Example: Parent(s) have total assets of $500,000. Will says leave equal shares to two children, Kelly and Chris. BUT, they have bank/credit union accounts joint with Kelly of $250,000. They die. Kelly gets $250,000 PLUS 1/2 of the remaining $250,000.
delamer
Posts: 17348
Joined: Tue Feb 08, 2011 5:13 pm

Re: Aging parents

Post by delamer »

koditten wrote:My father is getting up there. Still fairly sound physical and mentally.

He asked me to put myself on his bank account at our credit union. I did. I hope it doesn't bite me in the ass.

He has always been a "soft touch". He can not say no to anyone who is short on money and will easily go thru his monthly pension and SS money. Because of this, there have been some rather, how can I say this nicely?, lazy people who have been in his circle for years.

I'm a success. I have over an 825 credit rating.

After looking online at his banking history(now that I'm on the account), I see several overdraft charges on his credit union checking account. Fairly recent, too.

My worry is if there is any chance these over draft charges can bleed over to me and effect my credit rating. I am not the primary owner of the account, so I'm hoping that any of these issues will not reflect on my credit rating.

Anyone have an idea how this works?

Thanks

Kirk
I understand your concern about your credit rating, but don't know the answer to your question. I don't know if banks report checking activity to credit bureaus.

But aren't you concerned about you father having overdrafts for his sake? They might be an indication that he is having trouble managing his money or that someone is taking advantage if him.

Maybe it is time for you to take over his bill paying, if he'll allow it.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
dbr
Posts: 46137
Joined: Sun Mar 04, 2007 8:50 am

Re: Aging parents

Post by dbr »

delamer wrote:
But aren't you concerned about you father having overdrafts for his sake? They might be an indication that he is having trouble managing his money or that someone is taking advantage if him.

Maybe it is time for you to take over his bill paying, if he'll allow it.
I agree. At my bank my POA on someone else's account means I see it online along with my own accounts. I can log in daily and see what money is going out to whom. One thing I got stopped is someone who had been sold "overdraft" protection. Basically they loaned him the money and charged a $30 fee every time. At one point about 20% of his income was going to this fee. It wasn't hard to stop, but the backup was going to be a charge of taking fraudulent advantage of a vulnerable adult. I would never have seen any of this without having POA to monitor the account.
Luckywon
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Re: Aging parents

Post by Luckywon »

Are you on the on the account as an "authorized signatory" or as a joint owner?

My understanding from going this process myself is that an authorized signatory has access to the account but there are no liability, credit or tax consequences. For example, interest paid would be on a 1099 to the owners' SSN, not to yours. Your access would end with your father's death (at least after you report it to the bank). A joint owner has full exposure to liability, credit and tax consequences and ownership would continue after your father's death.
dbr
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Joined: Sun Mar 04, 2007 8:50 am

Re: Aging parents

Post by dbr »

Luckywon wrote:Are you on the on the account as an "authorized signatory" or as a joint owner?

My understanding from going this process myself is that an authorized signatory has access to the account but there are no liability, credit or tax consequences. For example, interest paid would be on a 1099 to the owners' SSN, not to yours. Your access would end with your father's death (at least after you report it to the bank). A joint owner has full exposure to liability, credit and tax consequences and ownership would continue after your father's death.
Exactly so. At my bank the procedure they use is to fill out a durable power of attorney for our state but to check off that it applies only to the bank account in question and not to any other financial activities. As mentioned, it might be a full durable power of attorney would be appropriate.
Jack FFR1846
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Re: Aging parents

Post by Jack FFR1846 »

Would your father hand over his finances to you entirely? What I see, if so is that you give him cash when needed and remove all checkbooks. This should eliminate most of the leeches who are taking money from him. When he doesn't have the money to pay for a cup of coffee, he might think twice about the clown looking for $20 here and there. You could set up auto pay for regular bills.

Now, if he won't, then I don't know what you can do. We have an elderly relative who sounds the same. She has some kind of monthly anti-fraud payment on her checking account and gives money to anyone who's able to find her address and send a sob story or plea for money. Save the whales....send them $20. Kill all the communist whales....send them $20. Stop the president cause....send them $20. Keep the president cause....send them $20. We know that she won't be declared incompetent because we've asked her doctors. So we simply don't give her money for the oil bill when she comes crying that "her balance is getting too low". Our answer is to stop giving money to all these causes because they're taking her heating oil. You can't control everything.
Bogle: Smart Beta is stupid
indexonlyplease
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Location: Florida

Re: Aging parents

Post by indexonlyplease »

Before my wife's mom died 5 years ago she was put on all accounts and now manages the money for her dad. Later we found her siblings also had access to the credit card and charged monthly. Her dad is ok and does not care who spends his money since he barely uses any of his monthly income.

You are ok with the bank accounts. It would also be great to help your dad not allowing his money to be abused by family. This is what my wife did. Now siblings must ask it they need money. But she cancelled the credit card with her name on it after one month sibling charged $10,000. She would be responsible for the money if her dad could not pay. So the new car only has her dads name on it.

Also, the Will updated everything with being split equally between siblings. Everyone knows this so there is no concern about my wife managing money.

It is funny how family changes once money gets involved. And how family thinks they are entitled to the money ever when the parent is till alive.
Katietsu
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Joined: Sun Sep 22, 2013 1:48 am

Re: Aging parents

Post by Katietsu »

The first question is can things that happen with a joint checking account affect your financial rating. I don't think it is actually your traditional credit rating that is impacted though. The answer to this is yes. However, it is not clear if there is any negative rating activity going on. It is possible that Dad has overdraft protection that kicks in and not that Dad is bouncing checks. The banks do not consider overdraft protection kicking in a bad thing since everyone gets paid including them.

It would be cleaner though to set up a POA and possibly add a payable on death designation while returning account ownership to Dad's name alone.

As to take control away from Dad, I would tread lightly. It is his money to give away. It could also backfire in that Dad could become less willing to be open about his finances. I think I would get the POA in place first. Then have a conversation with Dad about whether he was comfortable with the money he was handing out.
Topic Author
koditten
Posts: 18
Joined: Thu Jan 21, 2016 8:44 am

Re: Aging parents

Post by koditten »

Thanks for all the replies.

I believe the day is coming where I will be responsible for how his money is spent. It will happen with all of us.

At present, I don't see a change in his habits on giving his money away to whoever he wants. He's been doing it for 30 years.

Once his capacities decline, I will most likely be the one who has control of the money. Not actually looking forward to that, but that is what a good son does.

His pension and SS will be used for his care and the freeloader will have to fend for themselves.

There is no money that will have to be divied up upon his death.

Your replies have only made me more apprehensive. I'll be scheduling an appointment with account services first thing Monday.

I'm hoping, this being a credit union, that they will only do in house credit reporting. They have been bragging for years that your banking history with them is for mostly in house use. We will see.
billfromct
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Joined: Tue Dec 03, 2013 8:05 am

Re: Aging parents

Post by billfromct »

Did you provide your SS number to the credit union to get on his account?

bill
Topic Author
koditten
Posts: 18
Joined: Thu Jan 21, 2016 8:44 am

Re: Aging parents

Post by koditten »

billfromct wrote:Did you provide your SS number to the credit union to get on his account?

bill
Yes I did.
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