Updated: Apr 7
By Kim Frank
It is inevitable that later in life we are all going to need some assistance in many areas. If we live long enough, we may need help with many activities of daily living. We may also need people to help us with our finances.
There will come a time when a trusted family member or advisor may have to come alongside us to help us prepare and file our taxes, manage our investments, and take care of our day-to-day bills. That help may require us to allow that trusted person to access our accounts, have the ability to sign checks, and have the authority to make financial decisions on our behalf.
Deciding who you will trust to have that authority is not a matter to be taken lightly. The person you choose needs to be someone you trust. It needs to be someone who has your best interest at heart. It may be hard to believe, but it is not uncommon for caregivers and even family members to take advantage of someone needing their help. This happens far more than you might expect. Many people have had their hard-earned funds stolen by someone they thought they trusted.
How should you go about choosing a person to help you with your finances as you grow older? First, consider the trustworthiness and capability of the person to whom you want to give this responsibility. Can they manage their own affairs effectively? If not, they’ll likely not run yours well. Do they have financial issues of their own that might tempt them to look to your assets to solve their problems? Do they lead a lifestyle that is excessive, one they can't afford? If the answer is yes, they may be tempted to draw on your funds.
If choosing a family member or friend isn't a good option, you might consider engaging an outside trustee or attorney-in-fact to manage your affairs. Make sure you carefully consider each candidate's reputation and capability. It's always a good idea to consult your attorney.
Once you choose a person, a visit to the bank is in order. At the bank, the representative can add the trusted person to your account as a signer only or as a signer and owner. Persons can also be added by virtue of a valid power of attorney, and the bank will want an opportunity to review the document and keep a copy on file. If things go awry, a person can always be removed from an account or a power of attorney can be revoked. Keep in mind that you will need to visit the bank to make that happen.
It’s worth noting that the bank can’t monitor the activity of all accounts. If you add someone to your account, the bank has no reason to believe they are not trusted by you, so the bank will honor your wishes and execute the transactions presented by the person you designate.
As you can see, choosing the person to assist you with your financial affairs is a serious matter. Please choose wisely.
Kim Frank is Branch Manager at Volunteer State Bank, a community bank based in Sumner County with offices in and around Nashville. For more information, call (615) 824-6542 or visit https://www.volstatebank.com/.