I would like to be able to have my friend or family member help with my bill-paying and banking. What are my options?
You have several options when deciding to have someone help with your bill paying and banking. These options include opening specific types of checking accounts or creating specific legal documents that give another person the power to handle your money.
If you are still able to handle your banking and bill-paying but would like some help going through the bills and budget- ing, a friend or family member can review your bills with you and help you figure out which ones to pay and when. Under this arrangement, you still sign your checks and no one else is authorized to make account transactions.
If you have no friends or family members to help you with informal money management, there are organized programs that provide trained staff members or volunteers to help. To locate a money management program in your area, try con- tacting your local Area Agency on Aging.
You may also be able to find a money management program along with other resources for Older Americans by contact- ing the Eldercare Locator or by calling 1-800-677-1116.
If you get help from a money management program, check on whether the program has insurance or bonding so your money is protected in a worst-case scenario involving mismanagement or theft by the person assisting you.
If you would like to enable a friend or family member to write checks and make deposits on your behalf, you may open a joint account. Generally, everyone whose name is on a joint account can write checks, withdraw money, and make trans- actions. Similarly, if one of the account holders owes money, the creditor can try to collect from money in the joint bank account.
If the money in your joint bank account belongs to you, is not meant to be a gift to the joint account holder, and is meant to be folded in with your other assets for distribution according to your will or estate plan, you may be taking some risks by opening a joint bank account because:
• Your friend or family member can withdraw money for his or her own use or mismanage your money
• Creditors of your friend or family member may use legal processes to try to satisfy their debts from your money in the account
• When you die, depending on the terms of the account and state law, money in the joint account may be distributed by the bank to the friend or family member whose name is on your account, without regard to the provisions of your will or other estate planning provisions
A “convenience account” or “agency account” enables you to designate a family member or friend to help you by depos- iting or withdrawing money and writing checks. A convenience account does not change the ownership of the money in the account or give your helper the right to keep the money when you die.
TIP: Ask your bank about opening a convenience account or agency account. Often bank employees don’t mention these options or may not know they exist. You may need to speak with a manager. Explain that you want an account in which the money remains yours but someone else’s name will be on the account to help you with bill paying and other transactions. Be sure to say that you don’t want the other person to have the “right of survivorship” if you don’t intend for your money to become your helper’s money upon your death.
POWER OF ATTORNEY (POA) FOR FINANCES
You can name a friend or family member to act on your behalf by creating and signing a document called a power of attorney (or “durable” power of attorney). In that case, your bank account can remain in your name only, but the person you name in your power of attorney – your “agent” – can help you with banking
Again, give considerable thought before you grant anyone power of attorney, as he or she might withdraw money from your account for reasons that you do not specify.