Putting Children on Bank Accounts

Tip – There are much better ways to get help with your finances.

Some parents, when their health begins to fail, decide to put a child on their bank account to help them manage their finances, pay bills, etc. Sometimes, doing this does not give rise to any problems. Other times, it can lead to problems after the parent has passed away. For example, after the parent passes, the child may decide to close the account and take the money that remains for themself— claiming that was mom or dad’s intention. This position taken by the child conflicts with Idaho Code Section 15-6-104, which states that “Sums remaining on deposit at the death of a party to a joint account belong to the surviving party … as against the estate of the decedent if an intent to give the account can be shown by the surviving party…” If the intent to give the remaining money in the account to the child who took it cannot be shown, the other children must seek legal action to recover the money if they want it to be distributed according to the parent’s Will.

If the parent intends to give the sums remaining in the account to one of the surviving children, the parent could state this in his or her Will, or the parent could make the account a Pay on Death (P.O.D.) account, which would make the parent’s intent crystal clear. In this situation, after the parent dies, the child gives the bank a death certificate and the bank will release the remaining funds to the child.

Another problem that occasionally occurs when you put a child on a parent’s bank account is that the child begins to take money for his or her personal use, while the parent is still alive. When this happens, it is almost impossible to get the child taken off the account.

There is a better way for a parent to get help with their finances. The parent can give an agent of his or her choosing a Power of Attorney (POA) for finances and property. The POA gives the agent the authority to help pay bills, sell property, apply for Medicaid, or do any other needed transactions. If a problem arises in the way that the child uses the POA, it is easily revoked. In addition, the Power of
Attorney ends when the parent passes away, so the child cannot withdraw any sums remaining in the account at the parent’s death.

Using a Durable Power of Attorney for Finances rather than putting a child on the bank account as a joint owner can avoid many problems.

View our “Senior’s Guide to a Well-Planned Future” on our website! Packer Elder Care Law – with you for life!

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

December 2022