I have a joint account with my elderly mother so I can pay her bills and do her shopping which she is no longer able to do. As I understand it, this account (or part of it) will be counted towards our income when DH and I apply for FinAid to send DS to college. The money in the account isn’t actually mine so I don’t want that to happen BUT I still need to manage mom’s financial affairs. How can I do both?
What is your projected FAFSA EFC? Is your child going to attend a FAFSA-only college? Would you receive anything other than the Direct Loan of $5500 regardless?
Bank accounts aren’t counted as income - they are counted as assets. If 100% of the money in the account is your mother’s, in my opinion it shouldn’t be listed as an asset on your financial aid forms.
Kiddo is only a freshman so I’m still new to this so bear with me 
Projected EFC including the money in the joint account is abt $4K, assuming I did the calculator correctly.
Right before you file FAFSA, take your name off temporarily. The money isn’t yours. Or take the money out completely for a day, and then put it back. It’s your mom’s money, not yours.
Another option is to open another acct with just mom’s name on it, and move the money there while you file, then move the money back to the joint acct so you can pay bills.
Wait, I screwed up my EFC above… Is actually $7K, not $4K. Lacking multi-tasking skills today 
Thanks, Mom2. That could work.
Another option is set up an account in your mother’s name. Then set up a Power of Attorney (POA) that allows you to have legal access to the account. Some banks/investment houses will only accept their forms. This will allow you to legally mange the account, sign checks, make withdraws and any other actions in the POA. The POA can be very broad or very restricted in scope.
Belknap, I agree. Not my $, shouldn’t be counted against me. When mom dies, anything left won’t even go to support DS who is going to college - will be going to support a family member with a disability, who needs it more than any of us ever will.
All unnecessary financial gymnastics. Bottom line, as pointed out twice above: the money belongs to mom, not OP who will be a parent filing financial aid documents. The schools will not expect that mom’s money is available to use for her grandchild’s education, simply because OP’s name is on the account as a matter of banking convenience. What matters is who the money belongs to, not how the bank account is titled.
Talk to the bank. I sounds like what you wanted was not a joint account but to be a signatory on her account, with possibly a ‘pay on death’ directive to the relative who will get the remainder of the account on your mother’s death.
It is unlikely this would ever have to be proved that it is not your money as the financial aid people don’t run a check on assets, don’t come to your home and count the money in the piggy banks, don’t send the fbi to check that you reported every penny. Some schools do ask for bank records and if the accounts are all reported on one statement, you’d have to explain and the person you are explaining it to would have to believe that it is not your money. The assumption is that any account in your name contains your money. You’d have to rebut that presumption. What if your mother did die right when you were filing. All that money would actually become your even if you were planning g to give it to the relative. It wouldn’t be your mother’s, and it wouldn’t be in her estate. It would be yours.
It is so easy to change ownership of the account.
Thanks all! I’ll take this off my “things to worry about” list
Lotsa good info on these boards. Expect I’ll be visiting often!
If your mom is mobile and you can get her to a branch of her bank, it will take ten minutes to change the titling of the account to reflect legal reality- i.e. her money, but you can sign checks and withdraw cash for her shopping expenses. The bank manager will ask for her driver’s license or other photo ID (and yours) and will fill out the form for your mom’s signature. It will be prudent for you to get a Power of Attorney drawn up since if your mom becomes incapacitated, there are likely other things you will need to manage- like the ability to speak to social security or Medicare on her behalf.
God forbid- you could get sued, and the money which is in this account (which is legally hers, not yours) could be attached as part of a judgement. It’s not your money; change the account, the bank will be happy to help.
I recently visited a local branch of a large regional bank to ask about removing a name from an account that is used to pay operational expenses for a family property. My aunt and father, and one each of their children, are on the account, and I asked about removing my father’s name from the account and adding my brother. I was told that in order to remove my father’s name, the account would have to be closed and a new account opened using the names that we wanted. I don’t know if this was bank policy or based on some kind of banking regulation or statute, but to accomplish what I wanted to do would not have been “easy” (and I understand that’s a subjective term).
Belknap- in the OP’s case, the account is not titled correctly and the bank will recognize that.
I have signing authority for a non-profit organization, and every two years we need to fill out forms so that exiting board members or the exiting treasurer is removed from the account, and the appropriate new person is added to the account. It literally takes 10 minutes although it is a pain to have to do. (but nobody wants the wrong person signing checks). The assets belong to none of the people who can sign- and the account is appropriately titled in the name of the organization which in fact, owns the assets.
How will the bank recognize that?
Like I said, maybe the situation that I encountered was due to the policy of that particular bank, and at another bank what I was looking to do would have been relatively simple. The scenario you describe above - an organizational account - is different than a personal account with joint owners. I also have previously had signature authority on an organizational account, and have made the trip to the bank to fill out a new signature card when the person authorized to access the account changed. My experience is that this is not the same way that access to a personal account is handled when there are joint account holders.
I didn’t mean that the bank knows this today- but when the OP shows up to explain that although the account is now titled “Joan Brown and Eloise Brown”, but that in fact- the assets are exclusively owned by Eloise Brown, the bank will be extremely cooperative to re-title the account in the name of Eloise Brown, and Joan Brown can sign checks via a Power of Attorney (which the daughter might need to have anyway in order to deal with health insurers, the IRS, Social Security/CMS, etc.)
If this is an interest bearing account, the OP doesn’t need to list the interest as income on her tax return (it’s not her income), etc. So there are reasons to title assets correctly- financial aid being only one of them.
How much is in this account? Is it $100,000, or $10,000 or $1000. Assets are tapped at 5.6% for FAFSA purposes…after the asset protection allowance.
Banks can set up accounts almost any way they want if they have the proper ID and SSNs for the account holder. The FDIC will insure a certain number of accounts per person (I think 5 total) up to $1.25M ($250k per account). Some people with wealthy parents need to be concerned about it. If a parent has $250k in one account, having a second account shared with another person increases that insurance to $500k ($250k for the single account, another $250k per owner for the joint account). This used to be more of a problem when the limit was $100k, and can still be an issue if the parent deposits a large amount, like the proceeds of a home sale.
The bank couldn’t remove joint owners without their permission, so maybe it was suggested to just open a new account because it would be easier. I don’t know of any regulation that prevent a bank from changing account owners, so it must have been bank policy - or an employee who didn’t know how to do it.
I think my bank only reports to the IRS under the primary (first) name on the account. It seems to me that if your mom’s name is first, then it is technically under her SSN, and I would not report it. Just shoot me down if I am not thinking about this right. 