First things first, if you celebrate Easter, Happy Easter! And if you don’t, happy Sunday!

It’s probably the best day of the year weather-wise so far, so get out and enjoy it!

Okay, now let’s get down to business.

I met with a wonderful elderly woman last week who was looking for some estate planning help.

She told me a little about what she had going on, and for the most part she already had most everything taken care of.

“Tell me about your Power of Attorney,” I said. “Do you have one? How old is it?”

“Oh, I don’t need a Power of Attorney,” she said. “I just put my kids as account holders on my bank account.”

If I had a panic button to push that turned on flashing lights and an alarm I would have pushed it.

“I see,” I said. “That’s not exactly the same as a Power of Attorney, and there are some pretty big potential problems doing that. Do you know about those?”

“No,” she said. “I asked my bank how to give my kids access without the hassle of putting together a Power of Attorney and they said this was basically the same thing.”

Insert facepalm emoji – not for the amazing woman in my office – for bankers moonlighting as attorneys and getting it all wrong.

“It’s really not the same thing at all – and there’s one huge difference. When you add people onto your bank account that account becomes theirs. They can take the money, and have it taken from them, and you have no way to stop that.

Here are two examples.

First, let’s say one of your kids gets in a car accident and gets sued. There’s a judgment against them.

Your bank account is an asset that personal injury attorney could go after (and they will).

Second, let’s say one of your kids develops a brain tumor, or Alzheimer’s, or a drug or gambling problem, or a different mental health issue.

They lose their ability make good choices, and you have no idea that’s happening because you can’t see under the hood.

They fall victim to a phishing scam (clicking bad links on their computer), or an IRS phone scam, or just go on a gambling bender, and use your bank account as the backstop.

Your money is gone, and you have no recourse.

Power of Attorney allows your people to help you and ONLY help you (not themselves).

They have a fiduciary duty to act on your behalf and no personal attachment to your assets.

And, a Power of Attorney allows them to do a lot of other things that can be helpful (negotiate a lease, talk to banks about financing your house, being a part of the conversation with your financial advisor).

The best part?

Creating a Power of Attorney is not expensive and it can be done quickly.

If you’ve got your kids on your bank account (or hear a friend talking about doing that), please make the switch. The kids can do exactly what you want with no downside.

Have a great week!

Sincerely,

Christopher Small
Owner
CMS Law Firm LLC

PS – we love referrals. If you know someone that could use our help, let them know about us!