# You need a bank account. It's a contract. You're not allowed to sign a contract... **URL:** \ **Category:** In My Humble Opinion\ **Created:** [July 23, 2016, 1:17am UTC](https://boards.straightdope.com/t/you-need-a-bank-account-its-a-contract-youre-not-allowed-to-sign-a-contract/760644 "2016-07-23T01:17:23Z")\ **Posts on this page:** 7\ **Page:** 2
**Author:** ![Kimera757](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kimera757/32/3765_2.png) [@Kimera757](https://boards.straightdope.com/u/Kimera757)\ **Post date:** [July 25, 2016, 3:28am UTC](https://boards.straightdope.com/t/you-need-a-bank-account-its-a-contract-youre-not-allowed-to-sign-a-contract/760644/21 "2016-07-25T03:28:45Z")
> [@Marion\_Wormer](#): > > I have some practical experience with this having legal control of my mother’s finances and health decisions. > > 1. Even with if you have a financial power of attorney, the ‘mentally challenged’ person still can sign a contract. This is why I have not just power of attorney, but total control (by transferring the accounts to my name for investments, and with special notes and a password on her account at the bank telling employees that my mother is not able to make financial decisions and if she comes to the bank desk asking for money, that she’s been scammed. There’s no guaranteeing this will work, but it’s something) I wonder how I would arrange for that. From what I gather, at any time he could drop that restriction ☹ The good news is his sister is a lawyer, and I met with her tonight to talk about this, so she can give me further advice when we go to the banks. > [@](#): > > 1. Depending on your local laws, the only way to take away legal ability to sign a contract is to obtain guardianship for the individual. This is a serious legal step. and can affect the person more than just keeping them from signing stupid contracts. In some states it involve lawyers and a judge. In California, the individual can sign it away (which is stupid on the part of the law). This was something I wanted to avoid, but I did feel like I wanted to have my cake (let him have a bank account with all the benefits) and eat it too (less responsibility). > [@](#): > > 1. I think you may want call on a local agency that helps with the mentally challenged and ask for help. At present, there’s an authority problem. I don’t have a PoA yet, and so I can’t call up his associations (there’s two, mental isn’t his only disability) and get them to do stuff. It’s summer, and a lot of the people who can help him are on vacation right now. They weren’t two months ago when all this stuff went down, but he didn’t tell them the same way he didn’t tell me what was going on. > [@](#): > > 1. The police may be able to help with the phishing. It is a crime. There is a police report on this. Unfortunately my brother is having trouble getting his hands on it. He didn’t write down the file number. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [July 25, 2016, 4:47pm UTC](https://boards.straightdope.com/t/you-need-a-bank-account-its-a-contract-youre-not-allowed-to-sign-a-contract/760644/22 "2016-07-25T16:47:23Z")
> [@Kimera757](#): > > I actually am seeking a power of attorney, but this thread was more about … can mentally challenged people have a bank account? Can you have the benefit of a bank account without any of the penalties? > > (I was thinking of pitting the bank, but I’ve only done one pit thread, and it didn’t seem like it was angry enough to draw readers.) Is there a way to set up his account so that he can only use a debit card, and the bank will refuse to authorize overdraft purchases? In the US, until recently banks could automatically let you overdraw with your debit card then sock you with a fee. Now they have to give you the chance to opt out of that and have your purchases refused, instead. Does your brother recognize the trouble he’s getting himself into? Does he realize he screwed up by falling for the phishing scheme? If so, he might be willing to let you have power of attorney. In this situation you could do something like have his monthly income deposited into a joint account that he can’t spend directly from, with money transferred to his spending-money account as appropriate. If that account is set up to refuse overdrafts, it stops the problem right there. Of course he’d have to also know he can’t write checks at all. A point of sale system can refuse the purchase entirely, but if you write a check, that can bounce a few days later. ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [July 25, 2016, 5:37pm UTC](https://boards.straightdope.com/t/you-need-a-bank-account-its-a-contract-youre-not-allowed-to-sign-a-contract/760644/23 "2016-07-25T17:37:32Z")
One common strategy in the US is to set up a special needs trust. The trust owns all major assets, and the trustee (often a family member or a social worker) makes sure the big-picture finances are taken care of. The handicapped person gets the money they control either through a bank account they have access to, a prepaid debit card and/or cash. Setting up a trust like this isn’t particularly expensive and the annual tax return is only as complicated as the number/type of investments it holds. (If it has less than $600 of income, there’s no return requirement at all.) The trust might help the handicapped individual get more government assistance (because they are only the beneficiary of the assets, not the direct owner) but you’d have to examine that on a case-by-case basis. Most of the trusts I’ve seen of this type actually include a clause that requires the trust to be managed in a way that maximizes welfare-type benefits. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [July 25, 2016, 7:28pm UTC](https://boards.straightdope.com/t/you-need-a-bank-account-its-a-contract-youre-not-allowed-to-sign-a-contract/760644/24 "2016-07-25T19:28:03Z")
> [@dracoi](#): > > One common strategy in the US is to set up a special needs trust. The trust owns all major assets, and the trustee (often a family member or a social worker) makes sure the big-picture finances are taken care of. The handicapped person gets the money they control either through a bank account they have access to, a prepaid debit card and/or cash. > > Setting up a trust like this isn’t particularly expensive and the annual tax return is only as complicated as the number/type of investments it holds. (If it has less than $600 of income, there’s no return requirement at all.) The trust might help the handicapped individual get more government assistance (because they are only the beneficiary of the assets, not the direct owner) but you’d have to examine that on a case-by-case basis. Most of the trusts I’ve seen of this type actually include a clause that requires the trust to be managed in a way that maximizes welfare-type benefits. We actually have something like that set up for our son (mild autism). There are some limits to what the trusts can do - for example it can’t pay the rent (though it CAN own a house for the beneficiary, which seems counterintuitive). Obviously Canadian rules will be different, but I’d bet that unless the person is declared legally incompetent, taking control of his money etc. may be tough to do. Unless the OP’s brother has been declared ---
**Author:** ![Kimera757](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kimera757/32/3765_2.png) [@Kimera757](https://boards.straightdope.com/u/Kimera757)\ **Post date:** [July 25, 2016, 10:52pm UTC](https://boards.straightdope.com/t/you-need-a-bank-account-its-a-contract-youre-not-allowed-to-sign-a-contract/760644/25 "2016-07-25T22:52:09Z")
> [@Mama\_Zappa](#): > > Unless the OP’s brother has been declared He hasn’t. I didn’t realize he should be declared until this happened… and I can’t be the person who decides on this. ---
**Author:** ![Kimera757](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kimera757/32/3765_2.png) [@Kimera757](https://boards.straightdope.com/u/Kimera757)\ **Post date:** [July 25, 2016, 10:58pm UTC](https://boards.straightdope.com/t/you-need-a-bank-account-its-a-contract-youre-not-allowed-to-sign-a-contract/760644/26 "2016-07-25T22:58:42Z")
> [@Mama\_Zappa](#): > > Is there a way to set up his account so that he can only use a debit card, and the bank will refuse to authorize overdraft purchases? > > In the US, until recently banks could automatically let you overdraw with your debit card then sock you with a fee. Now they have to give you the chance to opt out of that and have your purchases refused, instead. > > Does your brother recognize the trouble he’s getting himself into? Does he realize he screwed up by falling for the phishing scheme? If so, he might be willing to let you have power of attorney. In this situation you could do something like have his monthly income deposited into a joint account that he can’t spend directly from, with money transferred to his spending-money account as appropriate. If that account is set up to refuse overdrafts, it stops the problem right there. > > Of course he’d have to also know he can’t write checks at all. A point of sale system can refuse the purchase entirely, but if you write a check, that can bounce a few days later. From what I’ve seen, generally my brother only got hit with fees when he started writing a lot of cheques all of a sudden. (He says it was for the eye doctor. Unfortunately in Ontario eye doctors are not free, but why would they want cheques of exactly $100? Multiple times?) And he got in trouble because his phone bill and insurance (grrr…) bill were pre-authorized, so if there wasn’t enough money in the account he’d get into trouble too. My old bank account did not have overdraft at all, so if I ran out of money I ran out of money. However I lost my cheques for the old account, so I literally could not have written cheques. I think he knows he screwed up, and was in fact trying to pay off the debt, but it’s basically impossible for him. Having said that, he could easily fall for a different phishing scheme, I think. > [@dracoi](#): > > One common strategy in the US is to set up a special needs trust. The trust owns all major assets, and the trustee (often a family member or a social worker) makes sure the big-picture finances are taken care of. The handicapped person gets the money they control either through a bank account they have access to, a prepaid debit card and/or cash. > > Setting up a trust like this isn’t particularly expensive and the annual tax return is only as complicated as the number/type of investments it holds. (If it has less than $600 of income, there’s no return requirement at all.) The trust might help the handicapped individual get more government assistance (because they are only the beneficiary of the assets, not the direct owner) but you’d have to examine that on a case-by-case basis. Most of the trusts I’ve seen of this type actually include a clause that requires the trust to be managed in a way that maximizes welfare-type benefits. Canada has a dizzying array of trusts. This would be an inter vivos (living) trust, but I didn’t know there were special needs trusts. I need to look into that. Thanks for the idea. The oddest headache might be paying his rent. The phone bill can be transferred, the insurance needs to be stopped, and he can give me a doctor’s bill to pay for him online… but I think his landlord accepts payments by cheque only. ---
**Author:** ![Marion\_Wormer](https://avatars.discourse-cdn.com/v4/letter/m/d07c76/32.png) [@Marion\_Wormer](https://boards.straightdope.com/u/Marion_Wormer)\ **Post date:** [July 26, 2016, 1:59am UTC](https://boards.straightdope.com/t/you-need-a-bank-account-its-a-contract-youre-not-allowed-to-sign-a-contract/760644/27 "2016-07-26T01:59:01Z")
When I took over responsibility for my mother’s finances I sent a letter to her doctors instructing them that they were to send me all the bills. Except for one doctor’s office I had to repeatedly inform, this worked pretty well. Oh, yeah, some will want a Medical POA, guardianship papers or what not (in my case the hospital wanted them), so it helps to have documentation. I’m sorry for you and your family regarding this. If his sister is not willing to represent him, you need to find a lawyer who will. Also, even without POA you can consult with local social work organizations at the very least to ask for their advice. [Previous page](https://boards.straightdope.com/t/you-need-a-bank-account-its-a-contract-youre-not-allowed-to-sign-a-contract/760644.md?page=1)