best way to help MIL manage money

[newtoseattle]

My MIL (age 80's) recently lost her husband who had managed all her accounts. She does not want to do any internet banking/etc and has asked her children for help. She would only need them to help set her up with a higher interest savings account and CD's (and have the ability to help her monitor bill pay, etc).

Would the best way to accomplish this be to have one of the adult kids be a POA? Would that be the official way to allow them to set up bank accounts, make transactions, etc in her name? There is no concern about trust/misuse etc. for either of the adult kids.

I think I have thought of POA as being for when someone is "incompetent" or no longer able to manage things, but was trying to come up with a solution for her just not wanting to do it...

[pacergal]

I am sorry for the loss of your FIL.

My sister was listed as POA on my fathers checking account, all it took was for them to go to the bank together to sign the forms. She was then able to help pay bills every month with him.
I don't know of the process for other financial issues, such as CDs.

Does one of her kids live nearby? Or will they have online access to monitor the accounts? Is there any memory issues or concerns?

[Car-Guy]

Based on your scenario, just establish joint accounts. Both have full access/control but only one actually manages it. But lot's of ways to deal with it.

[njhowie]

Easiest way is to just have online account and give the kid(s) the login. Beyond that there are numerous things that can be done. Having power of attorney in place is always a good thing, though it may not easily allow you to accomplish what you're looking to do depending on the bank or brokerage. At Fidelity, other Fidelity account holders can be given authorization for performing transactions for the account. MIL's acount(s) would simply show up along with theirs, and they can buy and sell just by selecting her account from the list within their own account. There are some limitations with going this route, which is why simply allowing access through MIL's account login would be easiest. If she would go to the extent of giving power of attorney, then having full account access through the login is doing the same more easily.

When doing this, do not forget to set up primary and contingent beneficiaries for everything to facilitate things in the event she passes away.

Quote:

I think I have thought of POA as being for when someone is "incompetent" or no longer able to manage things, but was trying to come up with a solution for her just not wanting to do it...

That is one use, however you don't set it up at the time they become incompetent. You generally do it before they become incompetent so it is in place when they do become incompetent.

[newtoseattle]

I think the problem with joint accounts is that the amount would require filling out a "gift tax" form. Also wouldn't the income from interest then need to be "split" for tax reporting purposes?

Would simply being able to log on and do transactions through my MIL account be considered "legit"?

[njhowie]

Quote:

Originally Posted by newtoseattle Would simply being able to log on and do transactions through my MIL account be considered "legit"?

If it's with her knowledge of it, why not?

As far as taxes on joint account, you can have primary joint account holder which would get tax forms issued to them.

[Mark1]

Quote:

Originally Posted by newtoseattle I think the problem with joint accounts is that the amount would require filling out a "gift tax" form. Also wouldn't the income from interest then need to be "split" for tax reporting purposes? Would simply being able to log on and do transactions through my MIL account be considered "legit"?

DW and her sister are on MIL account signature card such that both can do money moves, although it is still MIL account and her SS # for taxes, etc. I log her onto account from several states away periodically to make sure she has enough money, etc.

I also log into my DM's account routinely to keep an eye on it as well (although I'm not on the signature card). I don't have to worry about her changing the password on me as she doesn't have a computer, nor does she know the password.

[RetMD21]

Quote:

Originally Posted by newtoseattle Would simply being able to log on and do transactions through my MIL account be considered "legit"?

That's what I do. We haven't asked the bank for their input.

[MichaelB]

Quote:

Originally Posted by newtoseattle I think the problem with joint accounts is that the amount would require filling out a "gift tax" form. Also wouldn't the income from interest then need to be "split" for tax reporting purposes? Would simply being able to log on and do transactions through my MIL account be considered "legit"?

Quote:

Originally Posted by njhowie If it's with her knowledge of it, why not? As far as taxes on joint account, you can have primary joint account holder which would get tax forms issued to them.

I have managed my mum’s accounts for many years, with a POA and then as trustee. I also set up her online access and handled all the transactions. Both the bank and her investment company asked me to not access her account through her userid. Instead they preferred to open an account in my name and link it to her accounts, so they could identify who was carrying out transactions.

[Car-Guy]

My DW and I have multiple accounts at our local BM bank. Her's, mine and ours. I have them all linked so I can see them all from one log-on screen and transfer money as needed between them. The DW NEVER has logged on and doesn't even have the password(s) or even care. But I also have POA for all financial affairs if ever needed. I never asked the bank. Don't ask, don't tell applies here, I guess.

[njhowie]

Quote:

Originally Posted by MichaelB I have managed my mum’s accounts for many years, with a POA and then as trustee. I also set up her online access and handled all the transactions. Both the bank and her investment company asked me to not access her account through her userid. Instead they preferred to open an account in my name and link it to her accounts, so they could identify who was carrying out transactions.

Of course that's what they would like. However, they cannot force it. Additionally, as I mentioned, at least with Fidelity, even when you are authorized and they link the accounts, you don't get full capability. For example, with Fidelity, through the linked account, I was not able to transfer cash from mom's Fidelity account into mom's linked checking account. Had to be logged in to mom's account to do that. There are also other things you can't see/do without being logged in to the owners account. I was able to call and ask them to do the transfer and they would, but why go through the hassle?

With Wells Fargo, even as a joint account owner, there were things I could not access or do because I was not the primary joint account owner.

Maybe it's different with other banks/brokerages, but the above was my experience.

[Midpack]

Quote:

Originally Posted by njhowie Of course that's what they would like. However, they cannot force it. Additionally, as I mentioned, at least with Fidelity, even when you are authorized and they link the accounts, you don't get full capability. For example, with Fidelity, through the linked account, I was not able to transfer cash from mom's Fidelity account into mom's linked checking account. Had to be logged in to mom's account to do that. There are also other things you can't see/do without being logged in to the owners account. With Wells Fargo, even as a joint account owner, there were things I could not access or do because I was not the primary joint account owner. Maybe it's different with other banks/brokerages, but the above was my experience.

+1. Exactly what my Dad did, it was a simple process at the bank. My sister had POA on parents bank accounts for the last 4 years of my Dads life. We were also co-trustees for over 20 years before parents both passed. Made things easy while they were alive, and after.

And once Mom passed away, Dad put my sister on the books as the owner of his home, also helpful in advance.

None of this has to mess up ownership or tax impacts IME.

[OldShooter]

Quote:

Originally Posted by Midpack ... And once Mom passed away, Dad put my sister on the books as the owner of his home, also helpful in advance. ...

Thereby losing the basis step-up. Helpful to Uncle, at least.

[easysurfer]

Sounds like she no longer can manage money so the POA idea sounds about right.

[MarieIG]

One of the kids can be added to the account. It is also a good idea to get a durable power of attorney, sooner rather than later.

[pb4uski]

Quote:

Originally Posted by MichaelB I have managed my mum’s accounts for many years, with a POA and then as trustee. I also set up her online access and handled all the transactions. Both the bank and her investment company asked me to not access her account through her userid. Instead they preferred to open an account in my name and link it to her accounts, so they could identify who was carrying out transactions.

+1. I have trading authorization for DMs tIRA and Roth and also for her and DFs trusts since I am a co-trustee. Everything is online and also linked to the main trust account used to pay her bills.

Though prior to moving her accounts in 2022 I just had online access and a POA. I never do any significant transactions without first consulting her and DS, the other co-trustees.