Don't share accounts with elderly parents

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for, and also wrote for MSN Money, and, and has guested on Martha Stewart Radio and other programs.

Ask a question.
Question for the expert

Dear To Her Credit,
Can I accept a financial gift from my father? My husband and I filed for Chapter 11 bankruptcy about two years ago, but we revised our case last December when we gave up our house. We were divorced in April, and I live with my father now. He wants to know if I can accept money from him or have my name on a joint account with him? He is 78 and my mom died two years ago. -- Wendy

Answer for the expert

Dear Wendy,
Yes, you can accept a gift from your father. The bankruptcy court cannot claim any part of it.

As a general rule, any money you make or receive after bankruptcy is yours. There wouldn't be much point in going through bankruptcy, after all, if your future income could be used to pay pre-bankruptcy debts. Go out and make as much money as you want, and rest assured that your old creditors can't touch it.

The courts make some exceptions to this rule. For example, bankruptcy courts don't like people filing for bankruptcy right before a parent dies -- perhaps when the parent is in ill health  -- to get out of using an inheritance to pay debts. If a person receives an inheritance as a result of someone dying within 180 days of the date they filed for bankruptcy, the courts can use the inheritance to pay creditors.

The courts may also take settlement money from a divorce that a person receives shortly after a bankruptcy.

In your case, you are in the clear for two reasons: A gift from your father is not subject to post-bankruptcy claims; and you're well past the 180-day mark.

Your father is generous to let you live with him and offer to give you money. That's very helpful as you get back on your feet. Adding you to his bank account may or may not be such a good idea, however.

Parents often add their adult children to their bank accounts, thinking it will make things easier for both of them. The thinking goes that you can use the account for household needs, which makes sense when you live together. If he becomes sick or disabled, you can use the money to take care of him.

On the other hand, when he adds you as a joint owner, all the money is yours as much as it is his. I'm sure you are trustworthy, but having the money in your name makes it vulnerable to any future debts of yours, including lawsuits and collection efforts. In addition, if you have brothers or sisters, they may not be pleased to discover when your father passes away that his money is now yours. It can get messy.

One way to get the benefits of a joint account, without actually making you an owner of the account, is to give you signatory powers. Your father can give you the power to use the account, much like a business owner would give signatory powers to an employee.

You and your dad will probably need to visit the bank and show identification to add you as a signatory.

Bankruptcy, divorce and the loss of your mother, all within a short period of time, are a lot to deal with. I'm glad you and your dad can help each other through this difficult time. I hope that you have better times coming soon.

See related: Can bankruptcy tap surprise inheritance?, After a debt judgment, inheritance may be at risk

Meet's reader Q&A experts

Does a personal finance problem have you worried? Monday through Saturday,'s Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.

Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.

Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.

Updated: 03-22-2019