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For various reasons, people sometimes want others to have access to their bank accounts. This practice is especially common among the elderly, who frequently designate an adult child or trusted friend to have signing authority on their accounts. This additional signer often assists in paying the bills of the true account holder. If you want to designate someone else to have signing authority on your bank account, it is important that you understand a technical distinction between adding names to an account and adding only signers. If your bank paperwork is not properly worded, you may create an undesirable arrangement. You should not set up a joint bank account when your goal is only to authorize another signer on your account. A joint account has the appearance of being owned by both parties. This difference becomes important if the new signer on your account has a judgment taken against him and your bank account is garnished to satisfy this judgment. Bank accounts can be garnished. This collection remedy is not limited to wages. If this happens, you could lose some of your money to your signer's creditors. Even if you do not lose anything, you may still have to go to court to prove that all the money belongs to you. This generally means involving a lawyer, with the attendant expense. The advice is simple: Do not add someone as an account party when you only want him or her to have signing authority. Properly structuring your arrangement also should be simple, but mistakes frequently are made. Even experienced bank employees do not always understand the distinction between simple signing authority and the creation of a joint account. If you have questions about your accounts, discuss them with your banker. Be sure he or she clearly understands your objectives. Carefully read what you are asked to sign before you sign. |