|
 |
Home >> Accounts
Setting Up an Emergency Fund
I want to setup a family emergency fund for me and my extended family, one that allows others to deposit into it. Is there an easy way to set up something like this?
|
Untitled
|
 What you're talking about here is simply money that is jointly owned and earmarked for a particular purpose. The emergency fund isn't a real legal entity, so it wouldn't have the legal status necessary to be the owner of an account. You'll need to be creative about the way you set this up. Any owner of a joint account can make a deposit into a joint account, so that would be one option for this -- establish a joint account.
Another option would be to have one owner and have the other parties on the account as authorized signers. One thing you have to watch out for is what is being deposited into the account. If a check is deposited into the account that turns out to be no good (account closed, NSF, etc.) keep in mind that the return item fee will be debited from the account.
Think about who you want to have direct access to the funds. They can be either owners or authorized signers. When the owner(s) dies, however, the funds may be frozen (depending upon the state) pending notification of the state tax authorities, and if all the owners die, the authority of any authorized signers dies with them. Choose the owners carefully, and consider a Payable on Death designation. This idea of a family emergency fund sounds like a great idea.
Published on BankingQuestions.com 11/02/06
|
| |
|
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
