Having a Durable Power of Attorney is Highly Recommended
A Durable Power of Attorney is one of the three important documents you should have. Aside from your Last Will and Testament and an Advance Directive for Health Care (“Living Will”), the Power of Attorney is an essential part of an estate plan. Unlike your last will, a Power of Attorney comes into play when you are still alive, but, for some reason, you cannot handle your financial affairs. In this document, you have appointed someone who will have the legal right to write checks for you, sign tax returns, buy or sell investments, and take many other financial actions on your behalf. Without such a document, your loved ones will have to petition a court for someone to be appointed as your guardian, should you lose capacity. A guardianship action, will be far more expensive and complicated than if you had the foresight to execute a power of attorney. By preparing a Power of Attorney, you will have a say in who it is that will handle your affairs, unlike the proceedings in guardianship.

Informal or Limited Types of Powers of Attorney
Many people, especially the elderly, like to have one of their children help them with their finances. Often, the elderly person will bring a trusted child to their bank and ask that the bank put the child on their accounts. The stated purpose is for that child to have access to the accounts so that bills can be paid. Sometimes the child is put on an account so that he or she can pay for a funeral, when needed in the future. In other instances, the child brings the power of attorney to the bank and asks to be put on the accounts. All too frequently, the bank puts the child on the account as a joint owner, not as power of attorney. Each of these situations puts your money in danger and should be avoided.

Joint Owners Have Full Rights of Ownership
A joint owner of your account has the right to all of the money in your account. It does not matter if the word, “and” or “or” is between your names. If the account merely says, “Jane Smith or Susan Smith”, both can use all of the account proceeds for their own purposes, by law. Here’s the problem: a week does not go by, right here in Hunterdon County, New Jersey, when someone comes into my office complaining that their daughter or son took money out of the account and used it for their own purposes. Recently, an elderly woman advised that her daughter took everything to another state, and the woman was now penniless. The county prosecutor will not bring charges against the daughter, because she was a joint owner on the accounts and had an absolute right to take all of the money. I could sue the daughter to recover the money, and I will, but there is a good chance she will declare bankruptcy and all will be lost. This could have been avoided if the daughter was on the account as “attorney in fact” or “agent” under the power of attorney. An account titled, “Jane Smith or Susan Smith, POA” would have resulted in criminal charges against the daughter for theft, because she was not an owner of the account and had a legal obligation to use the money for the best interest of her mother, by law. Unfortunately, this was not done.

A Joint Account is Subject to the Liabilities of Both Owners
Likewise, if your child files bankruptcy, gets divorced or is subject to a collection action, your joint bank account is in play. Adding a child to your accounts without the POA designation, means that all of your money can be attached by a federal bankruptcy trustee or a court even though the lawsuit does not concern you. All of your money is subject to being used to satisfy the liabilities of the joint owner.

Make Sure Your Account is Properly Designated
The way to protect yourself is to be sure that the person you have added to your account has been added as your attorney-in-fact or agent. Note well, that you cannot just leave it to the bank. Many times bank personnel will be shown the written power of attorney and still fail to designate the person properly on the account, resulting in that person being a joint owner. You must make sure that the proper designation appears after your child’s name, usually “POA”. Ask the bank to confirm this before you leave. Look at what is written on your checks and your bank statement. If you only see names, contact the bank immediately and have it changed.


Robert J. Shanahan, Jr. Esq. focuses his practice in estate planning, elder law and probate matters. Mr. Shanahan additionally practices in business law and non-profit matters. He is a trained, experienced mediator and offers dispute resolution services, particularly for those arising from probate and elder law matters. Additionally, Mr. Shanahan’s firm, Shanahan & Voigt, LLC, offers a breadth of additional services to families and businesses throughout central New Jersey.

Mr. Shanahan received his Juris Doctor from the Temple University School of Law in 1985, and obtained licensure in New Jersey in the same year.  He received a Bachelor of Arts degree in History in 1981 from William Paterson University, with honors. Robert is a member and Past President of the Hunterdon County Bar Association, and is a member of the New Jersey State Bar Association, and its Elder Law and Disability Section.  He is also active in the National Academy of Elder Law Attorneys. Robert is a member of the Hunterdon Medical Center’s Bio Ethics Committee and was awarded a Five Star Financial Services Professional Award for 2016.

You may contact Bob at (908) 751-1551, or robert@legalcounselnj.com.


THE INFORMATION CONTAINED HEREIN IS MERELY AN EDUCATIONAL SERVICE TO PROVIDE BASIC, GENERAL INFORMATION AND IS NOT LEGAL ADVICE OF ANY SORT. FURTHER, BY EXPLORING THIS INFORMATION, YOU UNDERSTAND AND AGREE THAT NO ATTORNEY-CLIENT RELATIONSHIP IS BEING FORMED.

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