What Is the Authorized Signer on a Checking Account?
You can make your close relative or friend the authorized signer of your checking account. This acts as a way of giving them access to your asset without necessarily changing of ownership. In case of unforeseen cases such as disability and illness, older people prefer entrusting their close relatives as authorized signers of their finances.
Authorized signer, even if they are not the owner of the account, they are allowed to check the account information.
Definition of
Authorized Signer
Usually, authorized signers can sign checks, deposit and withdraw funds without the permission of the owner. But all the transactions made must be for the user and not for the personal use of the signer. However, the authorized signers are not beneficiaries and cannot be the owner of the property incase of demise of the owner.
Obligations of
Authorized Signer
Even though authorized signer is not responsible for paying fees that result from overdrafts, they are not supposed to sign for checks when they have prior knowledge that funds are unavailable. But there can be exceptions where the signer agrees to be liable.
An account owner can file a lawsuit in cases where the funds are used for other purposes rather than what is stipulated in the contract. The authorized signer may be required to refund the owner the total amounts. Banks are not allowed to monitor the purpose of why the authorized signer is withdrawing money for.
Rights and
Responsibilities of Authorized Signer
The signer can check balances of the account and withdraw fundson behalf of the owner. He also has the power to freeze the account or stop the processing of fraudulent checks. An account can be closed through a written letter from the signer. The signer has the legal obligation to be honest and transparent to the owner at all times.
Hiring and Revoking
of Authorized Signer
Filling up of the application is required when you are adding a signer to your account. Social Security cards and picture identification by both parties is needed. In case of an internet-based bank, follow the procedure and assign the financial obligations to your trusted friend or family.
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