Convenience Accounts and Powers of Attorney

If you’re concerned about keeping up with your bill-paying and banking, consider setting up a convenience account or creating a durable power of attorney.

By , J.D. UC Berkeley School of Law
Updated by Jeff Burtka, Attorney George Mason University Law School
Updated 2/22/2024

If you're older, and concerned about keeping up with your bill-paying and banking, you might have considered adding a son or daughter to your checking account. Making someone a co-owner means they can easily help you out by writing checks, making deposits, or getting cash for you. This arrangement can work well—but sometimes it backfires badly. Fortunately, you can accomplish your goal without the potential problems by setting up a convenience account or creating a durable power of attorney.

Why Not Just Add a Co-Owner?

It sounds perfect to add a co-signer on your bank account. That way, if you were sick or just didn't feel up to keeping on top of your monthly bills, your offspring could write and sign the checks for you. And down the road, after your death, the child whose name is on the account as a co-owner could use the money in the account as a ready source of cash for funeral and other expenses. Your other assets, after all, might not be easy to get at quickly—some assets might need to go through probate, which takes months.

So, what's the problem? There are several potential issues.

Misuse. Of course, you don't think your child would use the money for anything but your benefit, but it happens. Aside from outright dishonesty, pressure from a spouse or creditor could push a child to "borrow" money that never gets paid back.

Creditors. The creditors of a co-owner who gets into debt trouble could try to seize the account. In a divorce, the co-owner's spouse could claim that some of the funds belong to the co-owner.

Sibling conflict. The person you make a co-owner of a joint account will legally inherit the money in the account after your death. (Almost all joint accounts come with what's called the "right of survivorship," which means the surviving co-owner keeps the money.) Is that what you want—or do you intend for the money to be split among all of your children?

You might think everyone understands your wishes, but the account co-owner won't be legally obligated to share the funds after your death. (The other siblings might be able to sue over the money, and prove that you didn't mean it to be a gift—but that's little consolation, given that a lawsuit is guaranteed to severely deplete both family harmony and money.)

Durable Powers of Attorney

The best way to give someone authority over your financial matters is to sign a document called a "durable power of attorney for finances," naming someone you trust as your "attorney-in-fact." This gives the person the right to handle financial or property matters for you. (You can give broad or limited authority.) When it comes to your bank accounts, your attorney-in-fact is free to spend your money, with two very important restrictions:

  • The funds must be used only for your benefit, and
  • At your death, the money is part of your estate; it doesn't go to the person you named as attorney-in-fact.

Banks can be difficult about accepting powers of attorney, so it can be helpful to make sure your bank knows about your power of attorney before your attorney-in-fact uses it to make payments or deposits. You should take the signed, notarized durable power of attorney to the bank, so it has the document on file.

When choosing an attorney-in-fact, pick someone who is trustworthy. Even though your attorney-in-fact is legally obligated to use the funds for your benefit, a person with bad intentions can use your power of attorney to steal from you.

Luckily, there are significant risks for a dishonest attorney-in-fact who decides to misuse your funds. An attorney-in-fact who abuses a power of attorney can be criminally prosecuted or ordered to repay you. But a criminal prosecution or a court order to repay might be a hollow victory. If your attorney-in-fact spent all your funds and doesn't have other funds to repay you, you might never be fully reimbursed.

Learn more about durable financial powers of attorney.

Convenience Accounts

Another option, in about half the states, is something called a "convenience account." This kind of bank account lets you give someone authority to use the funds for your benefit only. There's no right of survivorship, so after your death the money goes into your estate, not to the convenience signer.

A convenience account works like a power of attorney, except that the signer's authority is limited to the particular account. But it's the same idea, and the same rule applies: The convenience signer doesn't own the money, but can use it only on your behalf. Family members won't be uncertain about whether or not you want the convenience signer to inherit the money in the account, either.

These accounts are authorized by a law called the Uniform Multiple-Party Accounts Act, which many states have adopted. Convenience accounts may be available in other states, too; you'll have to inquire at your bank.

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