Managing an Elderly Parent’s Bank Accounts

More and more children are managing their parents’ finances without a trust, power of attorney, or guardianship in place. Usually, one of the parents has added one of their children to their bank account to allow them to pay their bills. Although this arrangement is convenient, it is often only a temporary solution and is usually inadequate to address all of the financial matters that arise. Moreover, many people do not understand the legal consequences of the account agreement; specifically the difference between the “power of withdrawal” and “ownership” of an account. Once the parent’s mental capacity to execute a power of attorney or trust becomes an issue, then a guardianship will mostly likely have to be created to adequately address all of the parent’s financial matters.

Upon applying for a guardianship, the court will closely examine the child’s prior management of his parent’s funds to determine whether or not the child is qualified to serve as guardian. Specifically, the court will examine how the child has managed his or her parent’s funds before the guardianship is established. It is critical, therefore, for the child to have taken all appropriate steps in managing his or her parent’s funds while accessing the account. For example, the child should never co-mingle his or her own funds with those of his parents. In addition, the child should make sure that the parent’s funds are used only for the parent’s benefit; not the child’s. Many guardianship disputes arise over “gifts” the child has made from the parent’s funds, loans, or other transfers. Keeping the other siblings informed on a regular basis about the management of the parent’s funds can often deter negative accusations that might derail the child’s guardianship application.

Category : Estate Planning &Guardianship Law &Probate Law

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