Question about 'Authorized Signer' on Checking account?

cathie54October 20, 2008

SO / co-owner of home - (we're NOT married nor Registered Domestic Partners)- MAY be having surgery in a couple months. If he has this surgery, there's possible chance he may be on some heavy duty pain meds for up to 6 weeks.

We've always kept everything (our bills, bank accounts, etc.) seperate - except the home-ownership/mtg.

We do not have any 'joint accounts', 'authorized user' on credit card, etc. I don't want it, and neither does he.

IF he has surgery and IF he is so drugged up - I'm wondering how he will be able to pay (actually write out the checks) HIS part of household bills.

So, I'm wondering if anyone knows what this "Authorized Signer" IS, (for checking accounts), how it works, and pros/cons about it all.

I do not want to 'mesh' our bills or finances, (and FICO) but IF he's going to be laid up for awhile and bills need to be this an option?

Should we BOTH become 'Authorized Signers' on each others' bank accounts? (We both have automatic deposit)

I've never done this before, and don't know a thing about how this works.

I just want to be assured that IF he can't (physically) pay bills, then "I" can pay them for him - out of his bank account.

Anyone know how this works?

p.s. - many years ago when I was going thru some horrible stuff, I gave him some blank/signed checks...'in case something happened to me', so he could pay bills. I retracted those checks a few years ago and have not issued more.

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I do not think he will be unable to pay his bills, you can write the check and have him sign it. If you go the route of authorized signers, the both of you could write checks on each others account, but are not responsible for NSF's deposits, etc. I am an authorized signer on my sons account and their is no liability to me.

    Bookmark   October 20, 2008 at 9:25AM
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Since these are regular bills, he could write out and sign all the checks now, and you could just mail them as they come due. You might have to estimate some of the amounts, but if you look at past bills you should be able to get close, and can settle up on any minor differences after the six weeks.

Blank signed checks would be even easier, or he could fill in everything except the amount now since these are expected payments.

If he uses online banking that has a bill-payment service, he could also give you his password temporarily so you could pay bills that way.

I don't know enough about 'authorized signer' to help with that, but I think it would give you just as much power as a stack of blank signed checks, and the checks seem easier.

Good luck wit the the surgery and recovery!

    Bookmark   October 20, 2008 at 10:24AM
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Why not see a lawyer and have him grant you a financial Power of Attorney with specific limited powers?

That might be overkill though because all he really has to do is sign some checks in advance if it is thought he's going to be in a drugged stupor around the house for six weeks.

How you handle it all really depends on how comfortable he is with someone, even temporarily, having access to his accounts.

    Bookmark   October 20, 2008 at 12:30PM
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My DH and I have both been through some major surgeries in the past, and on painkillers. Neither of us has been incapacitated to the point of being unable to write checks.

Have him fill in and sign checks for the various bills, and you can fill in the amount, if you both think this is necessary. But seriously, I think you're inventing something to worry about.

I'd be more worried about the unlikely event of his death! Are wills, living wills, medical powers of attorney, advanced directives all in place? This is far more important than missing a few bills.

    Bookmark   October 20, 2008 at 5:01PM
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Whoa..........she makes a very important point. How are you protecting each other from an unexpected catastrophic event? Should that ever happen, you or he, could automatically and ultimately bear the burden of the entire mortgage, or his or your executor may have to force a sale on the house to settle a probate. Please tell me this has been run past an attorney.

    Bookmark   October 21, 2008 at 1:01AM
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Going to Neuro-surgeon (1st time) Appt TOMORROW with SO, so we should know what they have to say afterwards.

Sorry couldn't post earlier...too much 'stuff' this past week. Will wait till after appt - see what the Doc says, then I'll post back.

NO, we do NOT have all the legal stuff together. I KNOW it's just plain stupid. Don't think I haven't had this on my mind for quite some time!

I want to post more, but I'd rather wait to see what Doc actually says.
We went to get a brace last week and we read the patient chart...THAT's why I have a somewhat reasonable anticipation of what they (Docs) have in mind.

I'll post back as soon as I can. (And, yes, I'm going to be thinking and 'pushing' very hard about all that legal stuff - and I'll probably be on this forum to ask questions about it all!)

    Bookmark   October 22, 2008 at 1:10PM
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modern life interiors

Most of the legal stuff can be done without an attorney.
You can get most of the forms for your state free of charge over the internet.
Just start googling your subjects.

If you run into bumps along the way try the Nolo press self help books all written in simple english by lawyers.

Oh hell, I can understand it!

Maybe your library has them.

    Bookmark   October 22, 2008 at 2:20PM
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cathie54, if nothing else something needs to be in legal writing, for both of you, about the house because you are co owners and on the mortgage together.

Without written words, if either of you die, the legal next of kin gets ownership of assets, including control of 1/2 of the house.

If you two really love each other your best bet is have legals wills giving your ownership of the house to the other. And life insurance that leaves the other at least half of the remaining mortgage.

    Bookmark   October 22, 2008 at 2:33PM
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Without written words, if either of you die, the legal next of kin gets ownership of assets, including control of 1/2 of the house.

That is not necessarily true. It can depend on lots of factors, including what state you live in, what state you used to live in, how the ownership of the house is structured, and other factors. But I agree that this is a good time to get it all clarified.

    Bookmark   October 23, 2008 at 1:23PM
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And on-line banking would help, too.

    Bookmark   October 23, 2008 at 1:24PM
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I have no moral speeches to make to people who buy homes together. But, without some sort of marital or civil contract, and all the 'what ifs?" ironed out beforehand, you can get into a lot of legal sticky wickets. Like Greywings says, the laws vary from state to state, but even if you do retain certain rights intrinsic to your state's systems, you may have to fight for them in court. That means lawyers and money and ill will, often when you are least prepared both emotionally or financially to deal with those issues.

Nobody goes into marriage expecting to be divorced, but half of everyone who does marry can expect that outcome. Co-habitation? I don't have the figures on, but probably isn't any better, and may be worse. I have even read instances of engaged people who buy their first house before the nuptials having falling outs and then trouble evicting the other party, or get left holding the bag. Ditto issues with people who buy in partnership for strictly money making propositions. I know a man now who got sued by a lending institution for default on a home he bought jointly, signed the house over to his partner and the partner defaulted. Quit claim deeds can mean you just give up the benefits of a property, but may still incur debt on it.

This is NOT BEING WRITTEN for the benefit of the OP. What she does is strictly her call. It's for anyone contemplating entering into a similar agreement with another person. Nobody ever really thinks they'll have a problem, but it happens. Also, if anyone has your best interest at heart, as well as theirs, I can see no reason why they wouldn't be OK with an agreement going into a joint ownership. Various issues might make them not OK with signing one after the fact, however. And some with legitimate rationale.

    Bookmark   October 23, 2008 at 3:53PM
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I've never seen any one that drugged up following surgery and was allowed to go home. My husband and I both had surgery and we could walk, dress ourselves and think clearly when we went home. I don't think you will have a problem.

    Bookmark   October 23, 2008 at 10:04PM
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Sorry for long post...I 'think' can only post once until someone else posts?

This is just sort of a 'blanket' post.

"I" only do limited on-line banking, and I follow it up very closely.

SO does not do online banking at all. (He paid our mortgage pymts (we have two) ONCE online, & the BANK didn't do it right, so we had to pay more to cover our behinds.) He caught it on time to make the extra payment b-4 due date - so we didn't get 'dinged'! He will NEVER do it again.

I won't do online banking completely, as our computers DO mess up (CRASH) - but ONLY when we need it most! LOL!, so, I don't/won't rely on it.

Went to Doc with SO on Thurs. Yes, he needs the surgery. Hospital stay will be 5-7 days, according to Doc.

I am not too familiar with various pain killers. I did not ask the Doc about what he may be given, as it is not 'emergency surgery' & we have time for more questions later.

I had a bad sinus infection about 20+ yrs ago, and my Doc gave me some sort of pain killer drugs. I waited till I got home fm work to take one, and altho I was conscious(sp?), I laid on the sofa thinking "anyone could break in here right now, and I wouldn't be able to do anything!"
I couldn't even lift my arm! That was not good.
Needless to say, next eve (after home from work), I broke the pill in half to take. Didn't notice any affects! lol

I (thought/imagined) SO might be given morphine for awhile. (I don't know anything about morphine) He's not been on any heavy duty pain killers that I know of.

So, my one and only bad experience is what I imagined for pain killers.

(So, he has Cervical Cord Spinal Stenosis, and will have operation on neck with fusion, but no hardware.)

As it is NOW (has been for last couple weeks), he already has problem writing, holding, opening, buttoning...etc. His hands are numb (as well as arms, torso, etc.) and his gait is terrible. These symptoms came on suddenly only about 4 weeks ago.
I've had to fill out most of the papers at appt's for him, as he has no 'grip' so to speak.

(We were shown the MRI pics today. Darn! But can't deny what the pics showed.)

I may post on the medical part of this forum.

Now (while he's 'vulnerable' lol!) I MIGHT be able to get him to agree/sign some things which are way overdue.

As far as buying a home together without marriage/registered domestic partners... I agree w/ calliope in a lot said.

We've been together over 20 yrs now, and I have 'divorced' him SO MANY TIMES! LOL! (And he, me, but I hold the record!) But we've never 'split up', run away...(geez, so many times tempted...), but I'm gonna hang in here with him, as he has done for me.

We bot house 5 yrs ago to get out from the 'slum landlord' & the 'wondering every month if our rent would be increased again' and the 'when are we going to get that 30 day notice to move out' (his sons were now older - maybe want to live on their own? We lived there 8 years).
We bot for more 'stability'. (30 yr fixed) Nothing fancy, no 'granite countertops'.

We did NOT buy for 'gain'. (Altho, we should have never moved in and sold a yr later! LOL! hindsight) I didn't even KNOW there was a big "thing" going on in marketplace at the time - other than the prices were going up literally to the tune of $10k per week in our area!

We are as 'joint tenents' in Calif. Supposedly 'survivor' gets the house - not next-of-kin. (RIGHT?!!! feeling really dumb about now)

I'll post back later. I appreciate all the guidance and help.

    Bookmark   October 24, 2008 at 6:44AM
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You can post twice in a row, but on the second post you need to make a change in the Subject Of Posting line of that post.

    Bookmark   October 24, 2008 at 11:44AM
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Wishes for a successful surgery and rapid recovery.

    Bookmark   October 24, 2008 at 12:56PM
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Here's the really serious problem with Joint Tenancy - the surviver will NOT receive the "stepped up" tax basis to offset future profit when selling.

And it doesn't sound as if you have done any of the proper emergency planning. Do you have insurance policies to cover the remaining mortgage balance; if not, how would you pay the two mortgages on your own? You do not have access to "his" money, so how would you pay for everything? Are your banking accounts at least titled as POD (Payable upon death)?

My best wishes for recovery, but you two seriously need to get your legal house in order. If there are any serious complications in surgery rendering him unable to speak or think clearly, you do not even have the legal right to ask questions or direct treatment because of the HIPAA restrictions.

    Bookmark   October 24, 2008 at 1:07PM
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There are several ways you can deed property and I think ours was joint tenants, it was with right of survivor ship. I don't understand "stepped up" tax basis. I will get to sell our home without paying capital gains tax. Is that what you are referring to?

    Bookmark   October 24, 2008 at 8:14PM
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Cathie, you are in California. I recommend that your SO at least fills out a Durable Power of Attorney for Health Care, so you can at least discuss his health care with his doctor. Otherwise you could not make any decisions for him in the event things do not go well with his surgery (or after care)
his relatives get to do it. He needs to do a simple will. Don't forget California allows handwritten wills. Obviously having one an attorney drew up would be better--but any port in a storm.

    Bookmark   October 24, 2008 at 11:53PM
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If you don't understand the idea of 'stepped up basis', this is precisely why you need either better or more professional advice.

You could possibly be all right - but conversely you could very well NOT be positioned advantageously, both legally and financially/tax-wise, if you don't make the attempt to ensure that your legal/financial house is in order. A free Net forum is fine for general information but it is not the place to obtain personalized advice on your circumstances.

You and your SO have a significant financial asset but have taken little or no steps to protect yourselves for future uncertainties. The inheritance laws are stacked in favor of marriage, and if you two choose not to make this commitment - I do understand, it was 7 yrs before I married my SO - then it takes some effort to ensure that in an emergency situation, both partners are covered legally and financially.

I urge you to educate yourself and your SO, and put your affairs in order with some professional advice. This surgery can be seen as a "wake up call" for you, and I wish you the best of luck going forward.

    Bookmark   October 25, 2008 at 12:22PM
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I am the one who asked about stepped up basis, not the orig poster. I started learning how to take care of my self and my family back in 1960 when my father died in an accident and left my mother with a teen age daughter to support. Mom was lucky because his death was due to an accident, not an illness. She received a settlement from the insurance company, she was okay financially. It made me plan for what I would do to help me if my husband died like my Dad. My husband died a year and a half ago and everything went as I expected it to. I was asking because I had not heard that term before.

    Bookmark   October 25, 2008 at 7:35PM
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stargazzer, here's an explanation of "step-up basis". This applies to all beneficiaries, not just spousal transfers. It is why it is seldom if ever recommended to hold RE assets in Joint Tenancy these days; changes in the tax laws have made this sometimes very costly to heirs.

I believe it also applies to inherited taxable investment accounts, which is why it's useful to keep your cost basis records on equities **forever**.

Real Estate Dictionary: Stepped-Up Basis
An income tax term used to describe a change in the Adjusted Tax Basis of property, allowed for certain transactions. The old basis is increased to Market Value upon inheritance, as opposed to a Carry-Over Basis in the event of a Tax-Free Exchange.
Example: Dooley dies, leaving land worth $100,000. The land was purchased for $20,000, but the heirs receive a stepped-up basis to the Fair Market Value at death. The $80,000 Unrealized Gain to Dooley escapes Capital Gains tax.

Here is a link that might be useful: Step-Up basis for tax calculations

    Bookmark   October 26, 2008 at 5:53PM
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My DH was diagnosed with a very serious illness some years ago. We had been living together for 7+ yrs, and we decided to get married. We specifically married to protect me in the event of his death or serious disability. Cynical? Maybe, but we love each other very much and were planning to stay together, it just made things a lot better/safer for both of us in many ways, legally and in our relationship. We celebrated our 8th anniversary this year.

Our finances have always been totally separate, no joint checking, etc. We name each other on accounts and insurance policies to pay out at death, but thats all. I have the PIN to his atm card and could get cash if needed, deposit into my acct, and pay bills 'for him' if I couldn't cover a bill he usually pays. But the easiest thing would be to have him write out the checks, sign them and leave the dollar amount blank for the bills that may vary each month. Put them in a safe place and concentrate on helping him heal, but most importantly, get that Power of Attorney and a handwritten will (at least) in place.
I hope he comes through the surgery well.

    Bookmark   October 27, 2008 at 7:56PM
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jkom, that is what I thought you meant, it must be a state thing. In Kansas, you can sell your home and not pay any taxes on the amount over what you paid for it. It used to be on one home in your life time, but I think it's been changed to any home you have owned and lived in. I know there are several ways you can deed property, but isn't there only one way to have it go directly to the other name on the deed. The one with right of survivor ship

    Bookmark   October 27, 2008 at 8:49PM
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Stargazzer, let me clarify my explanation as I think we may be discussing two different things. "Step up basis" is not 'a state thing'. It is the IRS definition regarding estate taxes.

Yes, there are many ways to deed property. But not all of them are tax-advantaged to the beneficiary. Being ignorant of these consequences can be financially painful.

Now, admittedly the OP's SO is probably at a low risk for dying from this surgery! But my point was that this couple has been together for a lengthy period of time already, yet has not made a real effort to consider what MIGHT happen on that future date when something goes very wrong. Because....eventually something will. We all die, and not at the same time; that's a fact of life that is inevitable.

No matter what state you live in, or how much your total and/or separate assets are, if you want your assets to go to someone else, it behooves you to find out what is the best way to pass your assets on, with the least amount of hassle and the least cost to the survivor.

Loving someone, but leaving behind a legal/financial mess - or even worse, accidentally disinheriting them - is not a kind bequest to anyone. What is the point in leaving someone 50% of the house, for example, if they can't pay the taxes due upon death because the legalities ignored the tax consequences of the original joint decision?

For the majority of people, setting up their legal and financial affairs properly takes very little real time, once they stop procrastinating, LOL. There are ways for SOs to leave their various assets to one another without need to resort to a Revocable Trust, for instance.

And there is absolutely no time like the present for the OP to begin getting started! These are things (wills, durable healthcare POA, financial POA) that one should do BEFORE something bad happens, because you never know when Life/Chance/Luck may decide to take that freedom of choice away from you.

    Bookmark   October 27, 2008 at 11:19PM
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I agree with you. I personal would not live with a man without marriage and it's not based on a moral judgment, it is for protection.

while I was single, I met my second husband and he gave me an engagement ring after 9 months. A friend of mine asked "how did you get him to marry you?". Her husband had told her that he was burned to bad financially to marry again. I was very upfront with her and said, "why should he marry you, he's getting it all free now?" She quit her job a few days later and moved to Texas. He promptly followed her and married her. LOL and this is no reflection on the OP, just a funny story.

    Bookmark   October 29, 2008 at 9:51PM
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