/ Money, Parenting

It can pay to bring your family and finances closer together

Group of piggy banks

When my father suffered a stroke more than a decade ago, among the many things my sister and I had to deal with were his finances while he was in hospital. Here’s why I regret not getting power of attorney.

He was in his early fifties at the time, and had never considered that he’d fall so seriously ill – therefore leaving no plans in place for us to take over his money management if he was incapacitated.

Picking up the pieces during his six-month recovery was troubling, to say the least. Without power of attorney (what’s that?) we had to write to all the financial companies he dealt with, alert them to the situation and request that they contact us if any payments had been missed, which we then had to fund ourselves.

Shared joint account and power of attorney

Then, when my father had become well enough to do so (and under a doctor’s supervision and guidance), we had to sign a third-party mandate so we could temporarily operate his bank account.

Fortunately, dad made a fantastic recovery and was able to take back control of his finances, but he said that he didn’t want to ever repeat the experience. So, as a family, we decided that we would open up a joint account – with all three of us as holders, but which my father uses as his main account – alongside making arrangements for us to have joint and several power of attorney. Should he ever get ill again, it would be far simpler for me and my sister to take over.

As our research shows, a joint account can be a more powerful product than simply consolidating you and your partner’s pay into one place – it can help ease the hassles that dealing with money can bring at a time of distress.

Trust and honesty are, of course, vital when getting connected financially. But as we found out, it can sometimes pay to bring your family and your finances closer together.

Comments
Guest
Sophie Gilbert says:
9 January 2015

I’m glad your father made a fantastic recovery, Gareth. Thank you for sharing your story to make us think about bringing our families and finance together, which I will discuss with my husband tonight. We’ve discussed our wills, now on the 2015 to do list, but never the idea of a joint account.

Guest

My father suffered a stroke in his seventies from which he didn’t recover and it was quite a business trying to deal with his financial affairs both during his time in hospital and following his death. My mother was not in a position to do much and really didn’t know much about his sources of income and numerous payees. Fortunately my father had kept his papers in order and it wasn’t too difficult to contact all the organisations involved and change the account details over to my mother. Luckily, in those days [1988] virtually everything was done on paper and there was a good trail. The problem was that the money in his bank account was frozen and his pension payments immediately stopped going in. Transferring the utility accounts to my mother didn’t help much in the immediate period because her monthly income was not sufficient to pay all the bills. Once the probate process was cleared and the whole of my father’s estate transferred to my mother it was alright. Financially we rallied round as a family and kept my mother going but the worry it caused her on top of her grief was considerable.

It’s a very good idea to set up a joint account with the utmost trust and honesty. There might be situations where the family feel it would not suit to have a joint account but there are not that many other ways in which a useful sum of money can be put at the family’s disposal to meet imediate demands.

Something that I think people should reflect on seriously is the responsibility of the person in any household with the highest income or who pays the household bills to make provision for the moment when their income stops and to let the relevant people know. If that person dies first then their widow or partner will face a very distressing period until they can stabilise their finances which might mean selling their home or returning to work. The sudden drop in household income will not be accompanied by an equivalent fall in household expenses. As Gareth’s story above shows, it’s never too early for the family to work together to start planning and making suitable financial arrangements for the incapacitation or death of the principal householder.