Power of Attorney Money Transfer

[joannebaca]

I have power of attorney for my mother and have a joint account with her credit union.  I transferred more than $15,000 from the joint credit union account to my joint account with my husband to pay her bills and keep the money in savings.  (I have had issues with credit unions and fees and have come to find out that banking laws are different for credit unions.)  Since the money I transferred was from a joint account with my mother and I have power of attorney, is this money considered a gift?  Inheritance?  Is this taxable and if so how do I file the tax?

[Bsch4477]

The transfer of money from one account to another is not a reportable or taxable event. Of course any earned interest would be reported. 

[tagteam]

This is most likely a non-issue but you do need to exercise caution with this scenario, @joannebaca.

See https://www.irs.gov/instructions/i709#en_US_2021_publink16784xd0e1017

[Mike9241]

@joannebaca you do realize that with a joint a/c with your spouse's name on it, he would probably be able to withdraw the money and spend on anything he wishes just as you could. 

[VolvoGirl]

May I ask, What issues with Credit Unions?  I thought Credit Unions have better rules.   

[tagteam]

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@Mike9241 wrote:

@joannebaca you do realize that with a joint a/c with your spouse's name on it, he would probably be able to withdraw the money and spend on anything he wishes just as you could. 

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Yes, and that is problematic as well.

The more appropriate course of action would have been to open a new account, with the same account holders, at another financial institution.

[NCperson]

@joannebaca While there is a risk of a spouse absconding with funds, and there are stories of spouses taking non-trustworthy actions, no one on this board can appreciate or assess your trust factor and relationship with your spouse.  

But if the money was to be used to pay Mom's bills, why just not write checks off the existing joint account you have with her?  You are a joint account holder (and hold POA) which gives you the right to sign checks.  Feels like moving the money around is more complex.  What are the Credit Unions issues that make that problematic? 

[tagteam]

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@NCperson wrote:

But if the money was to be used to pay Mom's bills, why just not write checks off the existing joint account you have with her?  

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Too late, based upon this statement in the original post:

"I transferred more than $15,000 from the joint credit union account..."

[NCperson]

@tagteam - I know, but seems convuluted.. I suspect it has something to do with Credit Unions vs. Banks (and not sure what that can be)

[tagteam]

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@NCperson wrote:

@tagteam - I know, but seems convuluted.. I suspect it has something to do with Credit Unions vs. Banks (and not sure what that can be)

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I understand, but now @joannebaca wants to know whether a gift tax return should be filed and, in the most technical and strict construction, one should be filed.

[joannebaca]

I do.  We have been married for 26 years and we trust each other completely.  He will be the person to continue to care for my mother if I die first so I wanted to make sure that funds were available to him to do so.  

[joannebaca]

For 1 thing, credit unions are not set up for trusts of any kind.  When I became the death trustee for my father’s living trust when he passed, I had to set a trust account which no credit union could do so I had to go to a bank.  I chose a small local bank who helped me with the paperwork.  Also my credit union was very sneaky.  First of all they would put holds on every check I received over $500 even though I had been banking with them for years AND I had enough funds to cover any checks I received AND I had never deposited any checks into the account that bounced so there was no reason for any holds.  In addition, I set up bill pay for one of my loans (not automatic) and once I paid it off, I did not use the bill pay.  Next thing I know, they charged me a fee for not using the bill pay.  I sold a car and received a check from Carvana which they also wanted to hold for days.  They were just difficult on all counts.  Once I had opened the bank account, after 30 days, there were no holds on any deposits.

[joannebaca]

See prior post (that I just posted) for some issues with credit unions.  Also when my father passed and I traveled to parents’ home town in New Mexico (I live in Texas, 11 hours away by car), and I went to the credit union, they gave me the run around about what to do when I was clearly the death trustee for my father’s living trust.  The person across the desk from me was communicating with someone via Teams and giving me their answers and then spoke to that person on the phone.  They said they needed 48 hours to get back with me and they never did.  1 month later, after going back hom and calling and then after being on hold for 1 hour, I got someone else who said someone else would call me back.  That person finally did.  I did not want to deal with that credit union anymore so I moved some of my mom’s money to a bank account close to me.  If I die before my husband and my mom is still alive, my husband needs to be able to pay her assisted living bills which he cannot do from her account.

[joannebaca]

Thank you!  I will be looking into doing that.

[joannebaca]

Looked into the 709 which calls for a figure from Schedule A Line 11 - Itemized Deductions, Charitable Gift giving.  Since this was not a charitable gift but merely a transfer and funds are just sitting there and only being used for my Mom, it does not apply, however I will be looking for a good accountant to help with this as well as filing for the trust for my Dad.  Thanks for the support!