If your parent hasn't executed a durable financial power of attorney and doesn't have a living trust, and they become incapacitated and unable to manage their finances, the only way you can get legal authority to act on their behalf is a conservatorship.
Minors do not have direct access or control over the funds until they reach legal age. However, once the minor reaches age 18, 19, or 21 (depending on the state), the custodian can deliver the funds to the minor, and account becomes theirs and they are free to do whatever they want with the money.
As a parent or guardian, you usually need to give your authorisation for your child to open an account. You can also monitor your kids' transactions, set spending limits, and turn certain features on or off. Children's accounts generally come with a debit card, so your kid can make purchases in shops and online.
You really should not have your name on your Mom's checking account. It's best to have a separate checking account and to use a durable power of attorney for finances - that way bills can be paid by the POA.
You must be a designated beneficiary or joint account owner on the accounts, or your parents should have specifically devised the accounts to go to you in their will or trust. You may also be entitled to inherit them by way of intestate succession if your parents died without a will.
One major drawback of joint bank accounts is the automatic transfer of ownership upon the death of one account holder. This can bypass the deceased's will and complicate estate planning. A POA does not grant ownership; it merely allows the agent to act on behalf of the principal.
A financial power of attorney (POA) allows you to manage your parents' finances if they become unable to do so themselves. This legal document grants you the authority to make financial decisions on their behalf, ensuring their accounts are managed responsibly.
Tough Times, Tough Talks. It's not illegal to take money from your kids in most cases, although, of course, there are exceptions, like if the child's money is in a specific trust and you abuse the funds.
In terms of how to remove yourself from a joint bank account, some banks will allow one party to exit, often with the other person's consent. Other banks, however, may require the account to be closed in full, rather than remove a single account holder.
A custodial account is the property of the child, but managed by the parent until the child turns 18. With a joint account, parent and child both have access, but the adult can supervise or limit activity, say, putting a cap on the amount the child can withdraw the account by actively monitoring the activity.
It's Illegal For Your Parents To Do This!
California Family Code Section 4400-4405 establishes that adult children have a legal duty to support their parents if the parents cannot support themselves financially. This includes providing for basic needs like food, shelter, clothing, and medical care.
The law likely varies depending on state laws where you live, but typically kicking out an underage child (usually a minor younger than 18 years old) is regarded as child abandonment, which is a crime under state law.
You could add them as an agent under a power of attorney or add them as a designated beneficiary to that account and that is something different, but making a child a joint owner on a bank account is almost never a good idea.
Bank accounts solely for government benefits
Federal law ensures that creditors cannot touch certain federal benefits, such as Social Security funds and veterans' benefits. If you're receiving these benefits, they would be exempt from garnishment.
Consider a power of attorney
Executing a power of attorney with your parent ensures you have the legal authority to make important decisions when your parent is unable to. Contact an attorney specializing in elder law for help in drafting a power of attorney that fits your needs.
The six strategies for protecting elderly parents' assets are start early, spot warning signs, gather documents, request access to their accounts, get a view of their finances, and take care of legal documents.
Set Up a Power of Attorney for Financial Matters
Your parents can work with a lawyer to set up a power of attorney if that makes the most sense. This will allow you to make financial decisions on their behalf, which can be a benefit if your parents are struggling, or they want you to take over their finances directly.
Most joint bank or credit union accounts are held with “rights of survivorship.” This means that when one account owner dies, the money passes to the surviving owner, or equally to the rest of the owners if there are multiple people on the account.
The easiest way officially to make decisions on behalf of someone else is to execute a durable power of attorney, which is a legal document that appoints someone to act on someone else's behalf. The forms are generally available on the web for free or a nominal fee. They require witnesses or notarization to be valid.
The POA is “stale”: Some banks can be reluctant to accept so-called “stale” POA documents that were drafted years ago. The fear is that new documents could have been drafted since then, and the banks don't want to hand over access to customers' accounts to the wrong people.