As our parents age, they may become less able to take care of important everyday tasks, like managing their finances. This is especially the case if your parent has a condition that affects their cognitive ability, such as dementia or Alzheimer’s disease.
If you’re concerned about your parent and their finances, then you might consider opening a joint bank account with them. In this article, we’ll cover some of the pros and cons of doing this.
The advantages of having a joint bank account with your parents
If you’re wondering whether or not to set up a joint bank account with your parent, then here are some of the advantages it could offer…
- Spotting or preventing fraud – Seniors are often targeted by fraudsters due to their expected lack of knowledge about technology. If you are able to monitor their funds and transactions, then you can spot suspicious activity and report it.
- Making payments – If your parent has memory problems, then they may forget to make important payments for bills and medical care, for example. You can make sure that all necessary payments are made on time.
- Monitoring their spending – Cognitive symptoms may also lead to unnecessary impulse buys or accidentally buying the same thing multiple times. You could sit down with your parent to set a spending budget and then monitor the account to make sure they’re not overspending.
- Accessing funds after their death – Many people rely on their inheritance to pay for funeral expenses after their parent’s death. But it usually takes a long time to go through probate and access this money. With a joint bank account, you can access these funds immediately, allowing you to pay for their funeral.
The disadvantages of having a joint bank account with your parents
Sharing a bank account with your parent isn’t all positives. It can put either party at financial risk. The money in a joint bank account is owned equally by both parent and child, and can be called upon as an asset in the case of legal proceedings. This means that if one party goes bankrupt or gets divorced, the funds in the joint bank account are at risk.
This goes the other way, too. The funds in the bank account are considered to belong to both parties, meaning that this money could disqualify you from receiving financial aid. This could affect you if you are applying to study, for example.
Joint accounts can also cause complications if you have siblings because the person whose name the account is in has control and ownership of their parent’s money. This could cause tension and mistrust among the family.
If you need assistance when caring for your senior parents, then contact Brookstone of Clemmons to find out more about our senior care services and facilities, including both independent and assisted living for seniors.
One thought on “Why You Should Consider A Joint Bank Account”
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