Helping Elderly Parents with Bank Accounts: Expert Tips for Adult Children

Transcript of Interview: “Helping Elderly Parents with their Bank Accounts”

Mike Barnes: There are so many questions, I think, for so many families about banking. How do you help your parents as far as being on the account, paying their bills if you need to? If you’re not on the account, what are the options you have? 

Kim Barnes:We wanted to make sure we clear up all those questions, so we are bringing in Sal Ramirez from Amegy Bank. Thanks so much for being with us, Sal.

Sal Ramirez: Hi, everybody.

Kim Barnes: Well, let’s just start because I think one of the first places where people get stuck is understanding the difference between if I am an authorized signer on an account versus being a co-owner of an account with my parents. What are the differences?

Sal Ramirez: Good question. So, there are different ways that you can help your parents with an account. If you’re a joint owner in Texas, that means something different from other states. So, it’s important to know that. In Texas, that means you have transaction authority. There are other ways to help your parents, such as a power of attorney. You’d want to get some guidance from someone who maybe does legal help, and they can guide you on that. The bank wouldn’t be able to guide you, but you’d present that to the bank, and that would help you help your parents. So, should something happen, you could come in and do certain transactions to help your parents get their bills paid, for instance.

Mike Barnes: Depending on where you live around the country, if you’re not sure, is the easiest thing to do to just go to your banker and say, “What do I do here? Here’s what our objective is. Here’s what we’re trying to do. What would be the best way to do that?”

Sal Ramirez: Yes, go to your parents’ bank or call them. They can give you guidance. Sometimes you walk in and think you’re going to accomplish something right then and there. The best thing is to prepare, so you can give that bank a call. A good instance is where I work here; we’ve got different affiliates in different states, so there may be different laws or different procedures in place. The best thing to do is to call so that you can prepare and make the best plan or course of action.

Mike Barnes: Yeah, because I think that’s interesting. I would have just assumed that it would be more bank by bank, the way things are done, not state by state. So even your bank in Texas is going to operate differently than in other states as far as what is allowed or what things are called, perhaps.

Sal Ramirez: Very much so. They are similar; there are not many differences, but it’s important to know because, at the end of the day, you want to feel empowered that you’re helping your parents. You want them to feel that empowerment as well and to understand what’s going on. They have to be a part of that process the entire way, and I’m sure it gives them peace of mind.

Mike Barnes: Sure. If something happens to my mom or dad and I haven’t already put myself on their account as a cosigner or whatever, and I have a power of attorney, is the first thing I need to do is come to the bank and say, “Hey, I’ve got this power of attorney. I need to start writing checks for my parents?”

Sal Ramirez: Yes, be proactive. If you have that power of attorney, it’s in place. There are different types of power of attorneys; there are medical ones as well. But yes, be proactive. Find out where your parent banks and present that to the bank. They’ll provide you the guidelines and next steps. That usually means getting your name put on the account. They’ll review it; there’s usually a department at the financial institution that’ll help with reviewing to see what kind of transactions can be done because sometimes those attorneys limit the types of banking transactions you can do. It doesn’t mean it’s a blanket all the time.

Mike Barnes: Gotcha. I know we had a question in our group for another bank, but they were just asking. They said they went in and said, “I have a power of attorney,” and the first person they talked to at the bank said, “Well, you can’t do anything with this,” and so they left very frustrated. How do you know when, “I don’t think I’m getting the right answer,” and it doesn’t make sense based on what I’ve read in this POA? It sure seems like I should have these authorities. How do you know when to press and ask for a supervisor up the chain if you will?

Sal Ramirez: That’s a good question. Before being in banking, I’ll preface that I wouldn’t know what to do. I’ve seen power of attorneys, and the lingo or the verbiage, it’s not self-explanatory, but you can tell if it has the language that says, “Hey, you can do financial transactions with this power of attorney,” or maybe that’s more focused on medical things. That’d be the first thing is to review that POA or power of attorney. The second thing, if you feel inclined, is to go with your gut. If you feel like, “Oh my gosh, I didn’t get the right answer. Somebody’s misleading me,” ask for somebody, ask for a manager. If that doesn’t work, call the bank. It’s going to be so easy. They’ll give you guidelines, and especially over the phone, they have departments that help with that. So, they’ll let you know what to ask for when you walk into a branch. Even if it is a banker and you need maybe to speak to the financial advisor or the branch manager, you’ll be able to mention that phrasing. There are things that help you get taken care of.

Mike Barnes: Because one of the main reasons we’re doing this interview is because we just want people to understand the right terminology to use or the right words to use when you’re asking that question because then you can hopefully get the answer that you need. That’s a great point.

Sal Ramirez: Normally, you mention a power of attorney, and a banker or bank manager should know what next steps to take and what to ask you so that they can get you taken care of.

Mike Barnes: I was just going to ask, do you have people who come in to be the cosigner or co-owner, however you want to describe it, on the account, but they’re a little nervous about, “Oh, I don’t know if I should do this because am I going to be liable for any debts that my parents have now?” I think a lot of people get in that situation. What do you tell them?

Sal Ramirez: That’s a great question. We usually leave it up to the family because mom or dad might have many different accounts with different types of funds. Sometimes you have an account that has a smaller amount of funds, so we leave it up to the family to decide that because you’re right, there is a difference between being a joint owner on an account and being the power of attorney.

Mike Barnes: Right. I think what you were implying there is that there may be certain tax ramifications or something. So, that’d also be a great time to get, if you have a family accountant or somebody who helps with taxes, they could probably clear that up to help you understand if I become a joint owner because maybe that’s easier and less costly. What might happen if I become the joint owner? Am I going to have tax responsibility? Because it sounds like maybe somebody prompted that.

Kim Barnes: And is there liability if the parent were to get into debt or something like that? Would you be potentially, as the adult child and a co-owner of that account, liable for their debts?

Sal Ramirez: That’s a good question. I don’t know the answer to that. I do know that if, let’s say it was not a parent, just a husband and wife, since you’re joint owners, you do take on that liability. I imagine it might be a similar instance, but that’s a good question. I don’t know that. I would ask.

Mike Barnes: So, something to ask if you’re worried about that. Always ask those questions.

Kim Barnes: One other question is a lot of people, not to be mean about it, but like, “Oh my gosh, my kids are going to take all my money because they’re on the account.” But just because you’re on a checking account doesn’t mean that you can get into the savings account and do something. Would it be easy for Kim and me to set up a checking account that our kids could be on just in case, but they’re not on the savings account, so they can only get in the checking account and then pay bills?

Sal Ramirez: 100%. Exactly what you mentioned. If you feel safe, you know, I’ve run into this. I’ve done this over 10 years, and it’s always scary when it gets to where your parent is aging and something’s up. But the best plan of action is exactly what you said, Mike, setting up an account where maybe a family member or your children are there, and you know that they can help. You have funds there, so should something happen, worst-case scenario, let’s say you’re traveling and something happens, you don’t have access to funds, that’s a good reason to have your kids on there because they can take care of you or take care of bills while you get back.

Kim Barnes: Is it important also to make sure that people know that when you become a signer on an account or the co-owner, as we’re calling it, what authority then do I have? What can I do? Frankly, my parents are still on the account; it’s still their account. What authority do they still have? Everything that they were able to do before, right?

Sal Ramirez: Right, right. It’s just that both will have similar availability to the funds as both the owner, as the adult child co-owner, and the parent, who owned the account to start with. So in Texas, yes, joint ownership. Let’s say y’all are my parents, all three of us would have the same transaction authority. With my debit card, I could walk into a bank or a branch and make a deposit. As a power of attorney, that changes things. That gives you the ability to do and transact on behalf of your parents. A good example is maybe your parent has to go into surgery and they’re recovering for six months, so they can’t get to the bank, they can’t pay their bills. That’s usually where maybe a child will come in as a power of attorney and take care of bills for mom or dad while they are getting better.

Kim Barnes: Gotcha. Since we’re in modern times, we need to ask about online banking.

Sal Ramirez: Absolutely, yes.

Kim Barnes: What is your recommendation as far as if we’re co-owners of the account, for us to be able to get in and monitor the account as well? Do we have separate logins than our parent?

Sal Ramirez: Yes, you do. Good, that’s a very great question. Depending on the financial institution and whether you’re a power of attorney or you’re a joint owner, you want to have your own username and login. Further than just the power of attorney or being a joint owner, it helps with deciphering should there be something fraudulent or somebody defrauds your debit card, or somebody gets access to your username, and you’re using one. It will be hard or difficult for the financial institution to try to help you. Yes, 100% encourage you to have your own username and login. It makes things so much easier.

Kim Barnes: I was just going to share, from personal experience, the things that we’ve gone through. Knowing your parents’ bank and the people that work there can be amazing. I shared with you earlier that the bank was actually the one, the branch manager at my mom’s bank, who actually caught some potential fraud before it happened, of her getting scammed. Because she was sharing why she was coming to withdraw money, and it was not a normal action that she normally took, he questioned and said, “Now, what is that for again? I don’t think that’s legitimate.” So, I am forever indebted to him, frankly, because he was the one who was listening for triggers, or “This doesn’t sound exactly right, let’s talk about this.” Obviously, it’s still her account. If she just pressed and said, “No, I want the money,” they would have given it to her. But I think that just showed me the importance and the value of actually getting to know the people who work at your parents’ bank.

Sal Ramirez: You’re adding that at the foundation, and kudos to your Banker. Sounds like you have an awesome banker. Know your banker. At a community bank, we pride ourselves on knowing our customers for that reason alone. Going back to having usernames and logins, that’s what we do. We’re going to look at if mom and you have a debit card. We’re looking to see which card was swiped because maybe we see something that your parents have a small little transaction that comes through, and it’s peculiar because they don’t shop at Amazon, and they don’t have an account. Kudos to your banker. Definitely establish a relationship. It’s never too late either. Don’t feel embarrassed walking in and saying, “Hey, here’s my mom. It’s time for me to help. How can I help?” We’re actually really excited to see that when children come in with their elderly parents because it shows that familiar connection and that you all have made a plan. You put a plan in place to help.

Mike Barnes: When Mom all of a sudden ended up with a PayPal account, which she didn’t know what PayPal was, the bank was able to step in. They went to bat for her and were able to get the money back. That’s a long story, but yes, I never would have frankly realized how important that relationship with your bank can really be, but it can. It can save a lot of heartache. It did for us, for sure.

Kim Barnes: Thank you so much. We really appreciate it.

Mike Barnes: Thank you. We all understand now. We need to know where our parents bank. We need to probably be on an account with our parents, and we need to know who their banker is.

Kim Barnes: One last question. Are there things that are different while someone is alive versus once somebody passes? Are there boxes that need to be checked or things like that when you’re becoming a co-owner of an account that can benefit that later?

Sal Ramirez: Yes. If you’re a joint owner, should something happen and a parent passes away on the account, you being the joint owner, you’d have access to those funds and be able to take care of them. Even though the intention and the primary owner of the account was your parent, you’d be able to move forward and take care of their estate after the fact. As a power of attorney, once your parent passes away, the power of attorney no longer has the right or authority. It moves into probably an estate or probate, depending on your state.

Kim Barnes: In some, and this may be institution by institution or bank by bank, are there sometimes a transfer on death box that gets checked if maybe you don’t want to have, for instance, I don’t want my kids to be a signer on the account, but I do want them to have access to these funds if something were to happen to me?

Sal Ramirez: Great question. You want to ask your bank if they have the option for beneficiary to designate a beneficiary or to designate the right of survivorship. That might help as well because sometimes or most times accounts might be designated without survivorship. What that parent is saying is once something happens to me, you’re going to need some sort of document that says what happens to these funds. That might be a will or estate documents.

Kim Barnes: Okay, so then yes, very good question.

Mike Barnes: Great information. You’ve cleared up a lot and made us know that we need to make sure we talk to the bankers involved.

Sal Ramirez: Thank you so much. 

Mike Barnes: I think that we really understand now that we need to be more involved, not just with knowing where the money is, but making sure we have access to be able to help out. Know the banker because Bankers can help so, so much. 

Kim Barnes: I have seen it personally. Absolutely, yes. 

Mike Barnes:

If you have any other topics you’d like us to discuss, let us know. Parenting Aging Parents.

*This transcript is auto-generated. Please excuse any typos or mistakes.