onlykid946 Asked January 2013

What happens to dad's checking account balance after his death?

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My husband has power of attorney and guardianship of my father who is in a nursing home. He pays the nursing home from the social security, medicare and veteran's benefits he receives. We had to liquidate his assets down to $4,000 which we were allowed to keep as a maximum balance in his checking account. Pretty much the SSN, Veteran's benefits etc. checks hit the account and then are paid to the nursing home. The $4,000 remains in the account as the balance we are able to have in it per law. When he dies, what happens to the $4,000? Does Medicare or some other agency claim it or does it go the heir, which is me?

Just curious so we don't misstep and get into trouble.

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JessieBelle Jan 2013
This brings up a question. Suppose one child has their name on the parent's accounts and there are several children in the will that are to get equal amounts. It would, of course, be easy for the child on the account to write checks dividing up the money, but would that be like inheritance (untaxed) or would it become a taxable gift if large enough?
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onlykid946 Jan 2013
My husband called Social Security, Health and Human Services, Medicare/Medicaid, the Veterans Administration and the Court where his POA is filed. NO ONE could give him a definitive answer to this question. They all said to consult an attorney. They said they did not what happens in this case. Really? This question has never ever come up in the history of all those agencies? He is going to call the attorney who represented the case to get his POA and see what she says when he gets a chance.
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OmgWhatNow Jan 2013
For me, my grandmother's account is set up as a Trust. So, as trustee I assume I gain control of the money after she dies. Otherwise, I would assume it would get handed over as part of the estate to pay off debts before it gets divided out to family.
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Lovestinks Jan 2013
even a small amount :(
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dchina Jan 2013
Be sure to remember what the last person said. "Money can divide families by intent".
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ohreally51 Jan 2013
I the account is joint, it can be cleaned out by the person(s) on the account with him. BTW, my mother in law made both my husband and his brother her POA jointly and she has a will too, but several years ago the brother insisted she divest herself of everything, including her home, and put the money into joint accounts, C/D's, etc. SHE thinks her will will insure it gets split up 50/50. NOT THE CASE. A will is only for real property and once there is nothing but cash instruments anyone of the people on a JTROS account can empty it at any time. He lives nearby her and we are over 1500 miles away. He has told my husband that he hasn't prepared for his retirement. We have a pretty good idea what he is going to do. It isn't a huge amount of money, but money can divide family by intention. Do what you have to do but just be sure you are aware of how this all works.
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tlhanger Jan 2013
Guess I would get my name on the account too. No problem after that.
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palmtrees1 Jan 2013
If you are on the account as a joint owner, it is yours. It is no longer part of the estate. Otherwise, it is part of your father's estate.
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igloo572 Jan 2013
Onlykid, I'd suggest go to the bank and have dad's account changed to a POD ownership. POD = pay on death and you or your DH would be the POD beneficiary. This is pretty simple to do and should be easy. This avoids it being an asset for probate too. You may have to have something notarized for the bank's file and you can do up a letter on this and get it notarized like @ UPS store and take that to the bank. 4K is a small amount and makes everybody's life and paperwork easier if it's a POD account. But the bank needs something paperwork to do a cya (ok cover their ass) in the file @ the bank. Understand?

I'd also suggest that you sit down and look at dad's situation to determine if his will might or might not even need to be filed and go through probate. If he is on Medicaid and VA and has no assets (no house or car), then you may not even need to do probate. If he is on Medicaid and has a house, then you will need to do probate and deal with the MERP program (estate recovery) to get Medicaid's claim or lein on the property released so you can transfer ownership as per his will. Otherwise, you should be home free with nothing to be dealt with or owed.

Did anyone mention keeping his bank account below 4K? This is important and that if you let the amount build up and it goes over 4K, then he is not at whatever your state has as it's impoverishment amount and he is out of complaince for Medicaid and get's kicked out of the program till spent down. For example, my mom is in TX and every month all her income less the $ 60 a month personal needs allowance is paid to the NH. Now her income gets paid to her personal bank account direct deposit and I write a check to the NH. BUT every month her account grows by the $ 60 allowance. If I do nothing, then at the end of the year, her account is increased $ 720 and her account when she went into the NH was at $ 1,500 so add $ 720 to that and she is $ 220 over the asset limit. So you kinda have to spend their allowance so you don't get stuck in this paperwork jumble.
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hispagirl Jan 2013
I just went through this with my Mom's checking account. If your Dad did not give you permission in writing for you to be the trustee, you'll have to go through some court; so if you can make sure he makes you the trustee of his checking account.
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