Joint bank accounts allow two or more parties to share control of the funds in the account. A power of attorney grants authority to another party to act as an agent in place of the principal. These two items are often combined in estate planning to allow a trusted relative to handle the affairs of an older person instead of waiting for a court to appoint a representative.
Joint Account Holder Rights
Each account holder can access the account to withdraw or deposit money without getting permission from the other joint holder. A joint account holder can even take out all of the funds, close the account and open a new individual account in his name, so make sure you trust all of the account holders before depositing any money into the account. All account holders are equally liable for bank fees charged due to insufficient funds. If one holder dies, the surviving holders split ownership of the account. You can remove a deceased owner from the account by showing the death certificate to the bank and completing the appropriate paperwork.
Power of Attorney
If you designate an agent with a power of attorney, the agent can act in your place in a transaction. The agent has the same authority as you would and can act independently without getting your prior approval. Check your state laws before signing the document. A power of attorney may need to be notarized to be valid. Take the power of attorney to the bank when opening or closing an account or adding the agent to the list of authorized signatures. You can revoke the power of attorney at any time without giving a reason. The revocation should be in writing and kept with the original power of attorney.
Scope of Authority
You can issue a general or specific power of attorney, depending on your needs. Draft the document carefully so you do not grant more authority than intended. A general power of attorney gives the agent the right to close bank accounts on your behalf unless otherwise specified. Limited scope power of attorneys may still grant the authority to open and close bank accounts if it is an implied part of performing the required duties. For example, a power of attorney that grants an agent the authority to handle your finances will usually be considered to also grant the ability to make changes to your bank accounts.
The agent should open the account in the principal's name and list himself as having power of attorney. Ask the bank how the agent should sign checks on your behalf. He may have to sign your name and add the "POA" notation on the check. Other banks may let an agent sign his own name as long as he is listed on the signature card.
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