Bank and Credit Union Account Titling
An important component of your retirement plan is proper titling of your bank and credit union accounts in case of incapacity.
It’s also an issue that many bank and credit union staff are not familiar with.
If you want to save your family a lot of headaches, start with proper titling of these accounts.
There’s no cost to setting it up properly.
Allowing someone to take over management of your bank accounts in case of incapacity is done by establishing a Limited Power of Attorney (POA) with your bank.
Typically, you can designate a primary agent and a secondary agent.
Each bank is different in the type of Limited Power of Attorney form they use.
The first type is a “springing” POA.
In order for your agent to take over management, a letter from your doctor is required.
The second type is a “general” POA.
This means that from the moment you sign the POA form, your agent has access to your account(s).
This may or may not be the best depending on your situation.
Credit unions do not have Limited Power of Attorney forms.
In case of incapacity, the credit union will honor your attorney drafted POA.
Another option is to have another person be the joint tenant with right of survivorship on your account.
As the joint owner of the account, in case of incapacity, they can take over with no issues.
Keep in mind that if this person is sued or gets divorced, they are a 100% owner of your account and you may lose your funds.
