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I have a client who I believe would be best served by depositing the monthly expense total into an escrow account from which I can pay bills. Does anyone have advice on where and how to set this up? My bank doesn’t offer it, my client doesn’t have a bank, and Google keeps point me back to property escrow.
Mandy – The idea is good, but escrow isn’t the appropriate way to describe it. Escrow has different legal and banking connotations. What your client needs to do is to go into any bank that is convenient and open an account. Then she would transfer a certain amount into that account from which you would pay her bills.
Don’t put your name on the account as an account holder because that makes you an owner of the account and creates estate issues. The bank may suggest you have POA (they have their forms) so that you can contact them with questions and have access to the account.
I’m a bit confused as to why she would not have a bank account, but if she doesn’t care, you can also pick a bank that you prefer. Just make sure she has all the account info since it is after all her account. I’d hate to see the cash left behind if you exited the scene.
I agree with Lynn. I have clients with whom we set up a bill pay bank account. That is just a regular bank account funded with the money to pay bills and accomplish savings goals. They have a second account that is used for their spending. The account has their name on it, but they don’t typically go into it (though they do have access to it) and you might get your name on as POA to be able to do what is needed on that account with reaching out to the client.
Great advice so far. Keep in mind that if you do sign a POA document for the bank, you should carry fiduciary liability insurance. With Dominion Insurance, this can be added to the regular money manager liability policy but the cost will go up.
The banks may also allow authorized signers on the account who can withdraw and deposit funds. This may include the ability to pay bills online, don’t know but assume it does. This does not create ownership in a joint account and it may be a simpler step than POA for banking. Just a thought to consider – I’m still trying to figure this out!
Okay, I thought the Business Basics book mentioned an escrow account that worked like that. This client is looking for a product that would make it more difficult than a typical checking account for her empty it. Shortly, she will spend it if she has easy access to it.
Thanks for the advice! I will look into to the more traditional options for her.I work for a very large bank. On personal accounts, there is no such thing as an authorized signer, only for business accounts. Personal accounts can have co-owners and each owner has unique credentials for online banking. Also, At the bank i work for, POA’s are not allowed access to online banking. Hope this helps.
I work for a very large bank. On personal accounts, there is no such thing as an authorized signer, only for business accounts. Personal accounts can have co-owners and each owner has unique credentials for online banking. Also, At the bank i work for, POA’s are not allowed access to online banking. Hope this helps.
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