Advice for dad - make bank account joint with child in case something happens to him...

Tunstallstoven

Hi all

My mum sadly passed away earlier this year.  It has left my dad thinking about how to update his will, but also what provision to put into place should something happen to him.  He completed LPA forms 6 or so years ago, but we've just learnt that these are not registered.  They are currently in storage along with his Will.  

We've discussed registering the LPA and he's not sure he wants to at the moment.  We discussed what would happen if decisions needed to be made for him straight away, and how the LPA takes 8 weeks+ to register.  One of his ideas was to change his bank account to a Joint account with one of his three children.  That way the money could be accessed quickly if needed.  Also, if he were to pass away suddenly it would mean having access to funeral funds without having to wait for the estate to pass through probate.  

Has anyone ever done similar?  Are there obvious reasons why it might be a bad idea?  We are all pretty close and trust each other, so I don't think there are issues on that front.  I guess it could potentially effect Tax Credits?  Or benefit claims; not that any of us expect to have to claim, but you never know.  

Any thoughts most welcome.

Many thanks

Savvy_Sue

Yes, each of my parents had a joint account with one of us (as well as accounts with each other), so that money would always be available if either or both of them was incapacitated. 

the OBVIOUS reasons why it might not be a good idea - you're aware of.

• On death, the account usually passes to the survivor - this wasn't an issue for us, the survivor passed the contents of the account back into the estate, and we had no trust issues. 
• In the case of death, divorce or other life changing circumstances, half of that account has to be declared. And as you say, you never know. 

But if that's what your Dad wants to do, there is no reason not to: however it's not really necessary. Worth saying that paying for a funeral isn't normally a problem: the funeral directors can be asked to present their invoice to the bank, and they'll settle it directly. 

You're right to encourage your dad to register the LPA: you don't want to be waiting around for it once it IS needed. And even if it's registered, it doesn't have to be used, and I think cannot be used without his permission if it's set up right. 

The other thing it's worth doing is updating his will, or at least checking that it still has the effect he wants it to have! 

rach_k

I know it's not supposed to happen, but my grandparents' joint account was frozen for a while when my grandma died.  I don't know why it was and there was nothing dodgy going on, but just be aware that it can happen.  

Fireflyaway

Sounds like a good idea but what would happen if your father became unwell with dementia and inadvertently cleared out the account as a result of being scammed or just spending on something weird? Also if it's a joint account, both account holders will be financially linked. If one does something unwise, it will impact the other account holders credit rating which may or may not be something to consider. 
My parents are not particularly old and are probably fitter and more active than me! However we recently arranged LPA for money and health. They are both retired NHS/Police so have seen so many instances of people suddenly becoming ill and then their families struggle to deal with their affairs or worse, not know what their parents wishes were and feel guilt not knowing if they are doing the right thing. 

Lilactree_2

Thanks for asking this question.

Are there any tax liability implications?

Keep_pedalling

You really should try to persuade him into sorting out LPAs. Putting it off often results in it never getting done and a joint account is not going to help you deal with Savings accounts, ISAs, social services, DWP, doctors, care homes etc. Having to cope with his affairs without a LPA is going to be a nightmare, and you need to tell him that.

i would also recommend starting from scratch, something he will have to do if your mother was going to be one of his attorneys.

elsien

It depends how the LPA has been set up. Some of them only apply when the person has lost capacity; others can be used when the person still has capacity,  but only with their consent. This can be useful where someone has their marbles but has health issues meaning they find it harder to manage some aspects of their finances themselves. Either way the person must be involved in the decisions as far as they are willing/able.
If he's incapacitated and people are managing his finances without the correct authority it could lead to safeguarding concerns being raised. 
Registering it does not mean dad will lost control of his finances.  I suspect there's some other concern going on  here,  and maybe that's what you need to have a gentle talk about. 

Parent has LPAs registered and I have a certified copy for if it is needed. In the meantime I have little clue about her finances,  but there is a file with all the relevant info stashed away in her house which I would access as and when. But not before either she asks, or I have no choice. 

xylophone

Banks will normally pay  funeral costs before probate against a bill from the funeral director.

Or your father could consider pre paying his funeral.

He could also consider opening a joint account with one of his  offspring that would hold just a modest amount - enough to pay for the incidental costs  after a death - death certificates/ after funeral reception/paying for probate etc.

The money in the account would fall under the ownership and control of  that offspring after death but would have to be declared for HMRC as wholly owned at death by the deceased.

Slinky

My Dad and I both gave each other authority to sign cheques on each other's behalf. It was handy for me when I lived out of the country so he could pay the bills that arrived in my name. It was also handy for us in the last few weeks of his life when I could do the same for him.  These weren't joint accounts.  I paid his funeral expenses by cheque from the account before informing the bank he'd passed away.

elsien

Slinky said:

My Dad and I both gave each other authority to sign cheques on each other's behalf. It was handy for me when I lived out of the country so he could pay the bills that arrived in my name. It was also handy for us in the last few weeks of his life when I could do the same for him.  These weren't joint accounts.  I paid his funeral expenses by cheque from the account before informing the bank he'd passed away.

Although that works well when people are still mentally fine, from a legal point of view, any third party agreement with the bank would cease to be valid if and when the person lost capacity.

ZaSa1418

My Mum and Grandad had a joint bank account for as long as i can remember, it might have even been after my Nan died in the early 90's 
Her brothers were all over the world so my Mum was the main person looking after him when he needed it. 
My Dad has 2 siblings, both vile creatures, he was the oldest and my nan trusted him the most so he had poa - still created chaos. 
If you all get on then it could work but beware this sort of stuff can bring out the crazy in people.