SENIOR SELECTIONS September 17, 2021: Your Finances and Bills That Are Due

Don’t you love paying bills?

Having to spend that money is bad enough. But remember who needs to be paid (and when) is another challenge. Some bills are due monthly. Others have to be paid quarterly. Then there are some that are due “upon receipt.”

After you pay those bills, the bank statement comes, and you have to compare it to your check register. If the bank’s balance and yours are different, you have to hunt for the reason why.

What if there were a way to have someone else take care of all that?

Well, you have options.

Online Banking

You may already know that you can pay bills online. But did you know that you can automate at least some of those payments through most banks? Once you’ve set up an online banking account, you may also be able to set up automated payments for recurring bills. You can also take a look at your account and see recent deposits, payments, or withdrawals on your computer or smart phone.

But what if you’re not comfortable banking online?

Using a Power of Attorney

If you trust one of your adult children, and they’re willing to handle things for you, a power of attorney may be the solution.

A power of attorney is a legal document that allows you to give someone of your choosing authority to act on your behalf. You can choose anyone – not just one of your children. But you should choose someone who will do a good job and won’t be tempted to take some of your money.

With a “general” power of attorney, the person you’ve chosen can conduct your banking, pay your bills, talk to your insurance agent or retirement provider, sell real estate for you, and much more. As I said, you must choose someone you have complete faith in, because that person has a lot of authority over your assets.

If you’re not comfortable giving anyone that much power over your affairs, you can sign a “limited” power of attorney. Suppose you’re selling your home to move to a smaller one, but you’d rather have a family member go to the closing and sign all the required documents. You can give that family member “limited” authority, allowing him or her to do just one thing – sign the paperwork related to buying and selling those two properties.

Yet another option is the “springing” power of attorney. That’s where you sign a power of attorney that does not take effect until you are no longer competent to manage your own affairs. With the springing power of attorney, the person you’ve chosen cannot take any action on your behalf until you develop dementia, are in a coma, or are otherwise incapable of acting on your own.

Using a Professional Agent

What if you aren’t comfortable with online banking and don’t have a family member to manage things for you? That’s when a professional might be helpful.

Some banks provide professional bill paying services. For either a flat monthly fee, or a charge per transaction, an experienced person will monitor your bills, pay them on time, and provide you with detailed statements showing what funds came in and what money was paid out. There are individuals and companies, other than banks, who provide similar services.

One advantage of using a professional bill payer is that they are often bonded. That means they have special insurance to protect you against loss or fraud. Professional bill payers may also undergo regular training and be subject to routine audits – especially if they work for a bank or credit union.

Why Don’t I Just Add an Adult Child to My Account?

Many people do this, and banks sometimes encourage it. I don’t recommend it.

Here are the reasons people open joint accounts with their adult children:

• It allows the adult child to monitor the account and conduct banking on the parent’s behalf.

• The account automatically goes to the child upon the parent’s death.

Here are the reasons I don’t recommend this approach:

• Suppose you add one child to your account, but you have more than one child. When you die, the child whose name you added will be the sole owner of that account. Your other children are not legally entitled to any of it.

• If your child becomes a joint owner of your account, then he or she goes through a divorce, gets sued, or has major debts, “your” account might be at risk because your child’s name is on it.

This overview is provided as a public service, not as legal, financial or tax advice to any specific individual. Be sure to speak to a qualified attorney, financial adviser or tax specialist who can answer your questions, analyze your goals, and give personalized advice.

Michael Goss is a Greencastle attorney who focuses on estate planning and elder law.