A Better Bank Account

In a recent post about the sometimes contentious issue of protecting seniors who are losing the ability to manage their finances, I wrote about a daughter who was able to intervene in her mother’s financial exploitation because she was a co-signer on her bank accounts.

That’s typically a first step taken when, or before, family members suspect problems. “The joint bank account is everybody’s default estate-planning tool, because it’s widely known and commonly used,” Charles Sabatino, a lawyer who is director of the American Bar Association’s Commission on Law and Aging, told me in an interview. “But it’s less than ideal.”

A better alternative, he suggested, is the little-known multiple-party account without right of survivorship, which banks sometimes call a “convenience account.”

“If you intend another person to help you with bill paying and so forth, that person has the authority to access the account, to make deposits and withdrawals,” Mr. Sabatino explained. But this kind of account legally obliges the helper to act as the older person’s agent, serving his or her interest. “They can’t use the money for their own benefit, and creditors of the other party can’t lay claim to it,” he said.

Plus, with no right of survivorship, any money in the account at the older person’s death becomes part of his or her estate, to be divided in accordance with a will or the law. “It’s safer and will avoid conflict among heirs,” Mr. Sabatino said.

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A Better Bank Account