*Updated* Estate Fate and How to Avoid It

I thought it was just our Mom’s bank and perhaps just the one small-town branch of it. Little did I know, the treatment of people who manage estate accounts is likely to be bad, no matter where you bank.

I alluded last month to the unpleasant task of dealing with our Mom’s estate account. It hasn’t been pretty.

My parents banked at this particular big bank for more than 40 years. Mortgage, business, personal – you name it. My father died in 2017. If you’re a regular visitor here, you know that for the past couple of years I accompanied my Mom to every step in her cancer journey. That also meant becoming her part-time roommate.

When she was no longer able to go out, I would run her errands, including paying her bills at the ATM and purchasing groceries for her. I had Power of Attorney, as did my brother, my only sibling.

About a week before she died, I came into the branch with the POA in hand, to make a transfer from savings to chequing at my Mom’s request. She wanted to give money to someone who wasn’t named in her will. I knew I wouldn’t be able to make the transfer at the ATM. After a few minutes with a teller, a man came out and beckoned me into his office. And that’s where the trouble started.

He was terse and obviously frustrated or angry. That put me off balance. He wouldn’t look me in the eye. Told me I’d been committing fraud by using her debit card to pay her bills. Said things like, “It will probably be a couple of years before you even get probate and see any of this money”. I was stunned. My intent was not that of a greedy offspring. I was there to arrange money for someone else! I sat there in shock as he tapped on his keyboard without answering my questions. He gave me stone-cold silence. I filled the void by defending myself from his accusations. My understanding was that the Power of Attorney gave me these rights.

I do know that some people commit fraud. When he did talk, he told me horror stories about families that turned on each other and cleaned out bank accounts behind each other’s backs. I said, you’re looking at my Mom’s accounts – it’s obvious that I’m only doing what she has asked of me. There were no expenses that benefited me. Her credit card balance was 0. No response. He only told me that from now on, I was to submit bills to him and he would pay them from her account. He then made the transfer I requested.

After that uncomfortable meeting, a couple of days later Mom asked me to make another transfer for someone else. She wasn’t aware of what had happened with the first one. We all made a pact that we wouldn’t trouble her with anything that was stressful or upsetting. So, I filled out and had her sign the cheque in case I had to show it to the Gestapo. He had put me on the defensive and still wasn’t sure why.

I needed this guy’s help on a few more occasions over the following weeks. Twice I emailed him and once I phoned and didn’t get a return call or a return email. He clearly wanted nothing to do with me and the feeling was mutual but I didn’t have a choice. Everything was locked. I wasn’t able to move it or touch Mom’s finances to pay her ongoing bills.

When the Certificate of Appointment (which used to be called probate) came through in six weeks I called the guy for a meeting. No return call in a full day. I emailed. Two more days, nothing. I called his boss who then became my contact at the bank.

Kevin and I met with the new dude to open the estate account and we felt he rushed us through it. He pronounced the meeting over without giving us anything to show that we had opened the account. I had to ask him for the account number. At least this guy was polite. But days later, when I went to a branch in London to pay some of Mom’s bills, there was a 0 balance. He had forgotten to transfer the money.

The bank appears to find it distasteful to administer an estate account. So, who do they take it out on? The client. Estate accounts can’t be accessed online or through ATMs. Tellers become your nannies and decide whether what you want to do is legit. You can’t pay a bill at the banks. They issue a money order which is big fun if you normally bank online and get paperless billing.

When I mentioned this situation in general terms on Twitter, people said it happened to them with all the major banks. Our parents would be horrified to know their loyalty ended with the poor treatment of their children.

The bank had the opportunity to talk to us about investments and to treat us like our business was a priority. And they blew it, big time.

So, how can you avoid having to plead with a banker to allow you to spend your parent’s money on legitimate expenses? Become a joint account owner with your parent. If two (or more) of you own the account, when one passes away, it automatically becomes the property of the other. If you have a trustworthy family, this is the way to go. My cousin has been a partner in her Mom’s bank account for years. She takes care of the bills and keeps my Aunt, who lives in long-term care, updated on the balance. This cousin is unfailingly ethical and her siblings are grateful that she’s in charge of Mom’s finances.

I realize it’s not like this in all families. But when it is, a joint account is the way to go.

But there are still pitfalls. A woman with whom I shared this advice took her elderly mother and brother to the bank to create a joint account. However, the banker convinced the Mother to keep all but one account in her own name. I don’t know what her reasoning was, but Mom agreed. The banker drove up the cost in currency and stomach lining, for the woman’s children once she passes away.

It’s an imperfect system all around. Fraud prevention is important but at a certain point, the government – and certainly fat-profit banks – should keep their faces out of it. I don’t think banks should have been put in a position to police the way we handle our finances. Who decided a random teller should have more authority over my Mother’s finances than me, her own daughter, who has been certified by the courts as being her legit co-executor and beneficiary? It’s absurd.

There was zero need to treat me like a criminal and for them to act like I was trying to take their money! It’s bad enough that you’re losing a parent. No one needs this burden piled on top. Talk to your elderly parents. It might be an uncomfortable situation now, but it can get a lot worse down the road.

UPDATE: Thanks to blog readers Karen and John who sent this article written by a Niagara-area lawyer. Like anything legal or financial, there’s no instant fix. You can still run into issues with joint accounts, as she explains: http://lbwlawyers.com/how-to-keep-your-parentchild-joint-assets-out-of-estate-litigation/