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My mom wants me to get my name on her checking ...

My mom wants me to...
My mom wants me to get my name on her checking accounts since my dad died (in case something happens to her) but my financial advisor says not to since it may affect my paying taxes. Is this true and would getting power of attorney be a better solution?
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Answered in 19 minutes by:
3/1/2008
Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3,153
Experience: EA, CEBS - 35 years experience providing financial advice
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If your mother's name is XXXXX XXXXX on the account and her SSN is used then it should not affect your taxes. The assets and the income are still considered hers as she has not made a gift to you until you make a withdrawal from the account for your own use. However, there are some other issues for consideration. For example, if you file for bankruptcy or have a judgement against you as a result of a lawsuit then 50% of the account could be at risk even though the source of the funds in the account are your mother's. A durable power of attorney eliminates these other considerations as the assets are still considered hers and you are merely acting as her agent. However, make sure that the financial institution will accept the POA as drafted because in some situations institutions require their own forms to be used or require specific language in the document before they will accept it.

http://www.post-gazette.com/pg/08008/847390-51.stm

http://www.michbar.org/elderlaw/qa_durable.cfm

 

Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3,153
Experience: EA, CEBS - 35 years experience providing financial advice
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