Should You Add Someone's Name to Your Account?

Senior Citizens are often concerned that, as they age, they have someone who can manage their finances for them.  The simplest path is to put the helper’s name on your bank accounts.  While this seems to be the best solution, it isn’t necessarily so. 

When putting someone else’s name on your property, it give to the other person an ownership right in your property.  With respect to bank accounts, the law in Michigan (MCL 487.703 and 490.56) says that a surviving joint owner of a bank account or credit union account is presumed to be the owner of those accounts.  That means that even if you only intended the person to manage the funds to pay your funeral and last expenses and then split everything, they would not have to.  The new owner can legally keep it all – which may contradict your intentions (and cause a bitter family dispute). 

Moreover, if you put someone’s name on your accounts, it means that the account will be subject to the liability of the new owner’s creditors.  For example, if Mrs. Smith puts her daughter Suzie’s name on her accounts, and then Suzie goes through a divorce or bankruptcy, the account can be seized or involved in costly litigation as a result. 

What are the alternatives to the above problems?  Probably the best solution is to give a financial durable power of attorney to the person who is to help you.  You can make the power you are granting “immediate” or “springing”.  The springing power is only available when two doctors verify you are incompetent.  And make sure that the person to whom you are granting the power is someone you can trust.  It is not uncommon to hear of abuses of the power, where the person accesses or uses funds in a way that is not acceptable to the true owner.   Other less common solutions are to ask the bank to give only check signing privileges to the person helping you but not put the name on the account, to make it clear there is no other ownership of the account.  Or, you can ask your bank to set your account up with a “transfer on death” provision to all the person you desire to receive the money when you are gone.  This avoids giving them ownership but assures that they will get the funds and in the shares that you desire. 

Seniors have worked a lifetime for the assets they have.  While simple solutions to get help with and transfer those assets are available, the pitfalls of these options should be considered.  It may be better to have a document such as a Power of Attorney that, while it does involve more paperwork and a small expense, can save your family from bitter and unpleasant disputes and problems.


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