*Updated* Estate Fate and How to Avoid It

highway sign reads Bank Account

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/

15 thoughts on “*Updated* Estate Fate and How to Avoid It”

  1. Great advice Lisa. I’m so sorry you had this on top of the grief of losing your Mom. I appreciate your heads up & will be looking into it. 😘

  2. Hi Lisa
    My mother passed away this past August and my sister and I have been on her account for years.
    According to my lawyer, that doesn’t matter to the bank as they would consider this her primary account and can still freeze it. He suggested we withdraw all the funds except for a small amount to pay taxes, etc. The bank still doesn’t know she has passed away. In my case, there wasn’t a lot of money in the account. Unfortunately, the banks like to play God with your money!

    1. Wow. Well, it’s my understanding that they would only do that in certain circumstances, again, to prevent fraud. Our lawyer told me to stop listening to the bank’s opinion on when we could do what and just do it! So we’re doing it.

  3. Lisa,
    So very sorry to hear about the passing of your mother. Then to be treated this way by people who have no interest in you just your money is sad. It is already a difficult time for you and then to be treated like a criminal is disgraceful. I do however understand because of all the people out there who do commit fraud, but the bank (and our governments) should find a better way.
    Thank you for sharing your horror story at the bank. It will be less of a shock when it happens to us when my Mom passes.
    Stay safe.
    Roberta

  4. As a former CFP here are my tips. Joint accounts; all recurring bills are set up as a PAC (pre-authorized chequeing); set up mobile banking where you can pay bills, transfer funds and monitor accounts without going into a branch. You have to realise, these front line individuals don’t have the necessary training or skills to effectively deal with these issues and are only given very basic information. Now note, POA die when the issuer dies at which point the estate trustee has total control.

    1. That’s what one would think. But as a trustee, I can tell you that even though we have probate and her debts are paid and assets sold, we do still not have “total control”. This is where the problem lies.

  5. We see these kind of situations a lot. They occur because those people working for financial institutions have a single license. It basically allows them to deal with mutual funds GICs and bank accounts. If you put someone else’s name on your account they become a co-owner of the money automatically. So if you put your child’s name on an account and that child gets divorced a check is written from your account to the person they were divorcing. There are many risks by doing it this way.As an independent financial advisor we have many other options that you can use to avoid many of the pitfalls. Just because it’s what you can do with the bank does not mean it’s the only thing you can do.

  6. Wow that is horrible. I am sorry that was your experience Lisa. I shared a joint account with my mothter before she passed and did not incur any othe those challenges.

    Sorry for the loss of your mom.

  7. Very interesting story of the bank. Oddly the opposite happened in our family. My Dad had died about 4 years before my Mom started draining her own accounts and taking out a mortgage on a house that was already paid for to give the funds to some swindler who we never found about until all the family money was gone. The bank should have flagged this! I truly dislike banks! I hope you take your complaints higher up to the head office of this bank!?

    1. Yes, Susan, I did, and their Customer Care team was very responsive and helpful. I’ll never know why the financial advisor was such a jerk, but now everyone who needs to know about his behavior knows, and I can let it go. I’m sorry about what happened to your Mother. Near the end of her life, my Grandmother was giving gobs of money to the PTL club (Jim and Tammy Faye Bakker). My Mom and her sisters had to get involved and stop it. There’s no end to unethical people out there.

  8. Hello Lisa ,
    I am so sorry for the loss of your mom. It’s tough to lose a mum !

    I lost my only sister on Jan 1, 2018 and I was the executrix. Despite showing all the documents and having to set up the estate account twice ( the first bank clerk did not do it correctly ) I have had two years of ongoing challenges with the Toronto Dominion Bank. The bank official told me that I had to make an appointment with him every time I needed to pay a bill ( after probate was complete ) and also had to provide a copy of every bill. My estate lawyer told me that this was not correct and I informed the bank official who admitted that my lawyer was correct ! No apology tho !

    The estate is still not yet cleared up. As soon as it is complete I plan to transfer all my T. D. bank accounts to a Credit Union . I also plan to meet with the T. D. bank manager to present her with my written complaints. I also plan to write to write to Customer Service as well altho I don’t think anything will change.

    Even when I deposit money into the estate account I have to show my driver’s licence still !!! I have been a client at this village bank for sixteen years.

    The bank also fails to inform one that in an estate account mortgage payments will no longer be allowed to be automatically withdrawn after a six month period so imagine my shock to learn that the mortgage on my late sister’s property suddenly was in arrears . Thankfully, I managed to contact the mortgage company and explain what had happened . From that time on I had to send bank drafts from the estate account to the mortgage company . Of course there was a bank fee for every bank draft . The cost of bank draft increased to $9.95 per draft over this two year period !!!! It has been two years of absolute hell and stress !!!! You have my sympathy.

    Too bad the Fifth Estate or 60 Minutes could not air these ongoing problems with banks and estate accounts ! It seems that things only improve when ongoing bad publicity happens !

    Lesson learned! Avoid using banks. Try the credit unions !

    Judy L.

    1. Judy, it’s just so wrong that you’ve had to go through all of this, on top of the loss of your sister. The whole process is terrible. I would urge you to contact TD’s Customer Care department instead of complaining at the branch. The branch level will do nothing but a call from head office to investigate a complaint will hold the real power. (I found this out from someone who worked for TD her whole career. Even though it wasn’t TD I had to deal with, I followed this approach to make sure the complaint was properly documented and followed up by the head office.) Good luck.

  9. All of this is sad. An elderly lady I know lost her husband and when she told the teller at their local bank, where they both had been going to for years the teller froze all of their JOINT accounts, leaving her without access to any funds until it was all straightened out. I see why some people just keep it under a mattress! My parents are 85 and 83 and I’m wondering what I need to do now. I have POA but that doesn’t seem like it’s enough. YIKES

    1. It just isn’t right that some random person at a bank can do that to a person. We were advised on the sly to not tell the bank too quickly that Mom had died. We were also told to transfer out as much cash as we could but we know that was a bad idea because of the scrutiny we were under. I don’t think there’s a one-size-fits-all answer, I’m afraid.

  10. That is terrible to be treated this way when you’ve gone thru supporting your parents thru their illnesses and their passings. By you sharing your experience and what you have learnt, you have surely helped many -that is a gift.

    I am forever grateful to the McCormick Dementia Services caregiver support group, and the connections I met being a part of the group. Not only did they offer great advice on how to cope with a loved onesAlzheimer’s, but once your person passed you’re allowed to return one more time to have a good bye to the group. One of the members who lost their mother about a year before I lost mine gave great advice about what to do if you only have one parent left and he did share a similar story to yours. I took that info back to my dad and once my mom passed he arranged to have me added to his bank accounts.

    Many people find support groups depressing because it brings to light a lot of things you don’t realize you may go through in advance but I am beyond grateful for the advice, the support and the knowledge I learned from being part of the group for 9 years.

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