Source
r/PersonalFinanceCanada•
linernotes

Implications of being added to parent’s bank account

My parent has been diagnosed with a serious illness and would like to add me as a joint account holder to their bank accounts. The thinking is it’ll be easier for me to manage their accounts and bills, and easier when they pass away.

I’m fine with the idea (I’m an only child and my other parent has died, so there’s no other interpersonal concerns). I’m already the executor of their will and POA.

I’m just wondering if there are any tax or borrowing (eg mortgage renewals) implications I should think about. I have a mortgage on my home, I make a decent salary, and I don’t carry any other debt if that’s relevant.

Thank you!

Edit: thanks everyone for the answers. It’s my first time navigating this, and my parent wants to make things as easy as possible for me but might be a bit misguided in what those steps are.

Posted Dec 31, 2021, 11:09 PM UTC · edited

214
DanLynch•

The biggest risk is to your parent: if they don't die soon and you get sued by someone and lose, that money could be taken.

With a POA and a will in place, there's no good reason to do this.

3
[deleted]•

I think he's just trying to do this just to avoid probate tax.

3
gwelfguy-2•

Doesn't work. The government (at least in Ontario) will investigate whether a joint account is truly joint, or whether it was likely set up to avoid the estate administration tax. If the latter, it will be subject to probate.

3
vmurt•

I usually hate these, but in your specific situation, the risks aren’t that bad. It does potentially expose the assets to your creditors or marital breakdown. Having her execute a Power of Attorney for Property (Ontario term) is cleaner.

You should be aware that if the bank account at some point goes into deficit, as a joint owner the bank will also hold you jointly and severally liable.

3
gwelfguy-2•

It would be better for the parent to set up all of their bill payments as automatic withdrawals (PAP) from their bank account. In the event of their death, the bank would typically allow such withdrawals to continue even after the accounts are frozen to other transactions. Once you are approved as the estate trustee, you would then be in a position to do whatever you wish.

2
radarscoot•

Only set up the automatic withdrawals if you are listed on the accounts doing the billing - ie. Phone, cable, utilities, etc. It is an absolute nightmare for the executor to sort that out after the account holder dies. If you are also listed on the account, you can adjust/close in a strightforward fashion.

1
CalgaryChris77•

It’s an okay stop gap to keep money available for a couple of weeks while things get sorted but really, see a lawyer and get him the proper documents to deal with the estate when he passes and before that if needed.

1
aughhhhh•

Make sure that you would have access to singly continue making payments if parent ends up in hospital.
Would a Power of Attorney POA not suffice?
If you have a healthy emergency fund, then I would not worry about bills coming after death but before the estate gets CRA clearance .... in practice if you are the beneficiary then you can always just pay them yourself.

1
[deleted]•

[removed]

1
FPpro•

If they already have POA documents and have named you, you could just use the POA. check the wording on the POA to see if you also need a doctor's declaration.

But with those documents you can act for them in any financial capacity so that means access to their banking, dealing with their bills.

It's the best way to go about it because you have access to much more than just the bank account you can also say call Bell for example to handle things on their account their, etc.

1
linernotesOP•

That’s great, thanks.

1
covidpackage•

You can't add someone to an existing back account, a new joint account will need to be open. But if you already have access to their accounts, don't need to add yourself to anything.

-6
oh_my_ns•

Not true. My mother added my sister and I onto her accounts when she got sick.

1
eerror•

From what I've seen it IS allowed. Maybe some banks have extra procedures? I've added my spouse no problem but we were told that you can never remove anyone. To remove one person both people have to come in and close the account. I suspect it has to do with legal liability and fraud.

1