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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Family Law
Satisfied Customers: 91939
Experience:  Experienced attorney: Family law, Estate Law, SS Law etc.
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Tax and legal Implications of being a Power Of Attorney in

Customer Question

Tax and legal Implications of being a Power Of Attorney in someone else’s bank account

I am a Power of Attorney of my mother’s bank CD, savings and checking accounts for her security/convenience benefit. She is a +70-year old senior. In spite of the fact that I am neither the account holder nor the beneficiary of her accounts, I would like to make sure that her accounts/funds would not be affected should I have any legal and/or liability related issue in the future. I own a rental property that might get into foreclosure in the near future and the bank might proceed against me or the like. In any case, I would like to rest assure that my condition of Power of Attorney would not derive to legal and/or tax implications to her funds should I have any unwelcome debt circumstances in the future, as she should not be anyhow responsible for any financial issue I might personally have. I just don’t want her to be affected by any financial/debt problem I might need to deal with.

Also, as a POA would I be subject to any income tax based on her interest gain if any?

Thank you.
Submitted: 4 years ago.
Category: Family Law
Expert:  Law Educator, Esq. replied 4 years ago.
Your bank has informed you correctly, you have no liability for taxes on those accounts and those accounts simply are not yours and cannot be attached by any of your creditors. However, if you stand to inherit them, your best recourse now rather than later is to perhaps set up a trust for the funds. The reason I suggest an irrevocable trust, especially if your mom is currently healthy and not in need of long term care at this time is because in the event long term care is required, Medicaid and the care facility will insist on the depletion of all of those funds for her care before she can get assistance. Additionally, if the money is not in trust, in the event of her death if you are the heir to the money/property, any creditor who has a judgment against you could seize that money/property upon your inheritance and as long as it is in an irrevocable trust they could not touch it.

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Law Educator, Esq., Lawyer
Category: Family Law
Satisfied Customers: 91939
Experience: Experienced attorney: Family law, Estate Law, SS Law etc.
Law Educator, Esq. and 5 other Family Law Specialists are ready to help you
Customer: replied 4 years ago.

Dear Attorney PaulMJD,

 

Once again, you have provided me with a good and clear answer. I very much appreciate your help and look forward to your help again in the future should I have any other questions through Just Answer.

 

Sincerely, Customer/p>

Expert:  Law Educator, Esq. replied 4 years ago.
Thank you.

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Law Educator, Esq.
Law Educator, Esq.
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Experienced attorney: Family law, Estate Law, SS Law etc.