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 Should I Be on My Parent’s Bank Accounts?

It’s a good idea for the Power of Attorney for Property (POA) to be listed on accounts as the POA. This helps when a senior is incapacitated and cannot manage their finances alone or has a short-term disability needing some assistance.

While it is a good idea to provide account access to a trusted family member, the actual titling is extremely important and can have unintended consequences if not coordinated with the estate plan of the parent. Power of Attorney documents are valuable tools to have in place, as they provide access to accounts in the event of sudden incapacitation.

There are pitfalls in joint ownership of a financial account or even more so real estate. Let’s say that you are listed on your mom’s bank accounts and you get sued. The person suing you can take the money from these accounts. More importantly, if something happens to mom, you now own those accounts no matter what the distribution plan under the terms of the Will might be.

Careful consideration must be given to anyone granted Power of Attorney. You are giving someone the ability to do any transaction you could do yourself. We do not recommend adding a professional caregiver to any account.

Co-owners of real estate presents a variety of challenges. Let’s say mom needs to move into a skilled nursing facility for long-term care. She will need to pay privately if funds are available. If her only asset is the house and she is applying for Medicaid, you may have to move out and lose your investment in the house. She is considered the primary owner and CMS (Centers for Medicare and Medicaid) want the asset used to repay Medicaid when the home is finally sold.

We suggest you consult with an attorney to ensure that all accounts or real estate ownership coordinates with the overall estate plan. If you have questions about Medicaid planning, please reach out to Elderwerks.

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