Is it illegal to open a bank account for someone else to use

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Updated: 

February 24, 2021

If anyone, including a spouse, family member, or intimate partner, uses your personal information to open up an account in your name without your permission, this could be considered identify theft. Some examples of personal information that someone might use are your Social Security number, credit card and banking account numbers, usernames, passwords, and patient records. Fraudulent uses of this information may include opening new credit accounts, taking out loans, stealing money from financial accounts or using available credit.1

Each state law defines identity theft differently. The National Conference of State Legislatures lists the statutory citation for identity theft laws in each state. However, to read the actual language of the law, you’d have to Google the statutory citation for your state. If you have been a victim of identity theft, the Identity Theft Resource Center may have helpful information. Note: WomensLaw.org is not affiliated with either website and cannot vouch for their services; we provide this for your information only.

You can also report identity theft to the police or through the Federal Trade Commission website on identity theft or by calling 1-877-ID-THEFT (438-4338). To read more about steps you can take if you think you have been the victim of identity theft, visit the federal government’s websit.e

1New York State Office for the Prevention of Domestic Violence

Informal help with money management 

If you are still able to handle your banking and bill-paying but would like some help going through the bills and budgeting, a friend or family member can review your bills with you and help you figure out which ones to pay and when. Under this arrangement, you still sign your checks and no one else is authorized to make account transactions.

If you have no friends or family members to help you with informal money management, there are organized programs that provide trained staff members or volunteers to help. To locate a money management program in your area, try contacting your local Area Agency on Aging .

You may also be able to find a money management program along with other resources for Older Americans by contacting the Eldercare Locator or by calling 1-800-677-1116.

If you get help from a money management program, check on whether the program has insurance or bonding so your money is protected in a worst case scenario involving mismanagement or theft by the person assisting you.

Joint account
If you would like to enable a friend or family member to write checks and make deposits on your behalf, you may open a joint account. Generally, everyone whose name is on a joint account can write checks, withdraw money, and make transactions. Similarly, if one of the account holders owes money, the creditor can try to collect from money in the joint bank account.

If the money in your joint bank account belongs to you, is not meant to be a gift to the joint account holder, and is meant to be folded in with your other assets for distribution according to your will or estate plan, you may be taking some risks by opening a joint bank account because:

• Your friend or family member can withdraw money for his or her own use or mismanage your money
• Creditors of your friend or family member may use legal processes to try to satisfy their debts from your money in the account
• When you die, depending on the terms of the account and state law, money in the joint account may be distributed by the bank to the friend or family member whose name is on your account, without regard to the provisions of your will or other estate planning provisions

Convenience account
A “convenience account” or “agency account” enables you to designate a family member or friend to help you by depositing or withdrawing money and writing checks. A convenience account does not change the ownership of the money in the account or give your helper the right to keep the money when you die. Note, however, that any friend or family member you designate to help you can both deposit and withdraw money from your account, which exposes you to the risk that they might withdraw your money for their own use.

Tip: Ask your bank about opening a convenience account or agency account. Often bank employees don’t mention these options or may not know they exist. You may need to speak with a manager.Explain that you want an account in which the money remains yours but someone else’s name will be on the account to help you with bill paying and other transactions. Be sure to say that you don’t want the other person to have the “right of survivorship” if you don’t intend for your money to become your helper’s money upon your death.

Power of attorney (POA) for finances
You can name a friend or family member to act on your behalf by creating and signing a document called a power of attorney (or “durable” power of attorney). In that case, your bank account can remain in your name only, but the person you name in your power of attorney – your “agent” – can help you with banking. If you or your agent shares a copy of the power of attorney document with bank employees, they should honor the document and allow your agent to stand in your shoes to handle your bank transactions.

Again, give considerable thought before you grant anyone power of attorney, as he or she might withdraw money from your account for reasons that you do not specify.