Wednesday, September 7, 2011
What About the Joint Bank Account You Have With Mom?
When there a several children in the family and one child is handling a joint account created with the parent’s money the other children may wonder how that money is being handled, particularly if the parent has become incapacitated. The best situation is where all family members can talk freely with each other about such matters. However, many families find it hard to talk for various reasons, and in some cases not everyone wants the information shared. Moreover, a child who is a joint account holder with Mom may misunderstand what legal rights and obligations they have in dealing with mom’s money. Under Virginia law a child handling money for a parent must be very careful how that money is used and can be held liable for its misuse. For example, the son handling Mom’s money in a joint bank account that she set up in their joint names is considered to have a fiduciary relationship to his mom that requires him to handle it properly for her benefit. He can’t just use the money for himself. In fact, he can be held accountable for any self-dealing transactions, which are assumed to be improper, and if he dips into mom’s money for himself he can be subject to claims of breach of fiduciary duty, conversion, unjust enrichment, etc. This is why it is important that he understand what he can and cannot legally do with her money and that he keep careful records. As elder law attorneys, we can help people with these matters.