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Joint checking account -- good idea or bad?
Old 03-28-2010, 08:52 PM   #1
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Joint checking account -- good idea or bad?

I've got this elderly friend that I help out who isn't the best at managing her money. Also he isn't that well so is fearful that when she goes into the hospital (a likely possibility) she wants to make sure her bills don't lapse. The other day, she suggested that we open up a joint checking account that way if she goes into the hospital I can use that to make sure her bills are paid on time.

I the idea of a joint account a good one or a terrible one.

I know a disadvantage of having a joint account is that either party can drain out the entire account without the other person's knowledge/permission. Additionally, if there are overdrafts, does that go on one's credit, and would that make your credit score lower. Even more, say if one party has creditors, can the creditors go after other accounts owned by a joint account owner or only on that joint account?

On one hand, I surely want to be helpful, yet on the other don't to regret a good plan that turns out bad.

Looking forward to your insight, experiences that I can learn from.

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Old 03-29-2010, 02:30 AM   #2
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Could you be put on the account as a "signer" but not as an "owner"? That may make a difference. I worry about being on my son's account, as he has overdrafted (just once, and I really got on his case about it), for the same reasons. I don't carry debt, except the current month's credit card bill, so I'm not overly worried about credit score, but still, I prefer it to be squeeky clean.

I am also on my parent's account so that we can handle financial issues when it comes to that. I'm not worried about them overdrafting or having moeny issues though. Your situation is a little different though, in that the person seems not to be your relative. I'd also be interested in any insights.


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Old 03-29-2010, 03:26 AM   #3
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Not sure of this person's means. But a couple of considerations:

  • This person's family could will view you with suspicion when the person passes. Does anyone have Power of Attorney? It would be best if this were a trusted family member. If so, perhaps this person should help out.
  • Assuming no one in the family is available and you are not the PA. Also assuming the person has more money in their bank account than is needed to meet a normal months worth of bills... Have them open a 2nd checking account that they own and give you the ability to write checks (if it has to be jointly owned then do it that way). Have this person deposit only enough to meet 1 months average bills. If the account gets low, they can write you a personal check from their regular checking account so you can deposit the funds into the 2nd account. Put no more in the account at any one time than is needed for 1 month of bills. Keep the paper trail and carefully document all inflow and outflow.
  • The 2nd account could be a backup if they are incapacitated for a while. You could pick up their bill and go to the hospital and write their checks for them and have them sign the checks and prep the bill for mailing in their room. The cycle of most monthly bills (and thier due date) would mean you are doing this chore once or twice in a month.
  • If this is more than a temporary concern, you can best serve this person by helping them to identify a family member to be the PA. It would be best if this were a trusted family member that will eventually be an heir to the estate. Better yet, the Executor. The PA is important... otherwise if something happens and the person is incapacitated, someone will need to go to court to get guardianship....
  • Another option is to setup as many bills a practical/safe on automatic payment from the bank.
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Old 03-29-2010, 07:30 AM   #4
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I would be very careful. As old folks enter dementia they often become suspicious of others. My mother acussed my sister of taking things from her apartment. You could find yourself under fire for being a Good Samaritan.
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Old 03-29-2010, 08:02 AM   #5
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Ideally, just it would be nice/should be a family member but unfortunately, her family isn't really that helpful at times of need. For example, a few years back she moved out of an apartment and some of her family lived right next door but when time to move, not one of them even helped in moving boxes. Eventually, I helped and then she had to pay a sister's son to help move boxes.
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Old 03-29-2010, 08:23 AM   #6
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What my sisters did with my Dad was to have him open a dedicated checking account for bill paying, and helped him set up auto bill pay for everything they could. They used to help him with his mail and pay any one-off bills by writing out the checks for him and having him sign.

The bank statements every month clearly showed all the transactions so it was very audit-able.

Personally I wouldn't do a joint account with a friend.
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Old 03-29-2010, 09:11 AM   #7
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Your friend's family sounds so awful that it would be so tempting to not only have the joint checking account with her just to p*ss them off, but also to influence her will so all her estate goes to the charity of her choice instead of any of them.

I also vote for automatic bill payment for her.
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Old 03-29-2010, 09:29 AM   #8
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What about post-hospitalization if she isn't able to act for herself?

I think you being a signer on her account and holding a financial POA to use if needed is a good option. In addition, all her regular bills should be set up for auto-pay as someone else mentioned.

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Old 03-29-2010, 11:28 AM   #9
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I do like the idea of a signer and POA and the idea of keeping a separate account just for bill paying and the autopay. I went ahead and did a little more searching on the topics. Here's a couple of links that I found:

Joint Accounts are Usually Bad

How to Discuss Power of Attorney with Elderly Parents - Associated Content -

Thanks for all the info.
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Old 03-29-2010, 03:30 PM   #10
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It might not be a bad idea for you both to put togther a short and informal SIGNED and WITNESSED statement regarding her request to you without coercion or influence to have you act as bill payer in case of her inability to do so and EXACTLY what your duties will be.
Nothing fancy, but it might come in handy if lovely relatives of hers decide to challenge your helping role here.
I truly commend your kindness , but I also see a lot of alligators in this moat for you. CYA...
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Old 03-31-2010, 12:14 AM   #11
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The question is if you brought the checks all but signed for her could she sign them. If so then no joint account is needed. I did this for my mother when in a nursing home, since I wanted to let her feel she was still in control,(I did have a power of attorney as backup).
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Old 03-31-2010, 04:19 AM   #12
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I'm cautious when it comes to opening bank accounts in joint name. I would not do it for a friend since there are other ways to address this issue. Auto payment froma designated account is definitely a good way. In case your friend needs you to check the payments are correct, she can inform the bank to send the statements to your address and give you a written authority to open such bank statements.

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