Bank account for a relative

[jelly-baby]

My brother wants me to open a bank account for him to keep his savings in. He is in a lot of debt and doesn't want his creditors to know about any savings. He is going to give me �200 a month to put in the account (it is legal earnings from his overtime, which is not taken into consideration with his debts as it is not regular money).

How does this affect me? We know about the fact that if I die it will be part of my 'estate' so we've discussed that. If I gave him details to access the account online, would he be able to quickly draw the money out if something did happen to me?

Will it look suspicious that I am putting this money into an account every month or is the amount to small to be of any significance? (I do work full time so I have a salary coming in regularly).

Please don't make any comments about him being dishonest and that he should pay his creditors, I just want to know if this could have any affect on me.

Thanks.

[dzug]

It could have tax implications for you - particularly if you earn enough to pay higher rate tax, when you would be liable for the extra.

It could also affect you if you need to claim any means tested benefits that might depend on savings, or if you fall into debt yourself, or if you are married and get divorced and your ex-wife wants a share.

It shouldn't look suspicious though.

[jelly-baby]

It won't push me anywhere near the higher rate, and I'm not married or planning on claiming any benefits so maybe it will be ok.

Thanks for your reply.

[vicalncraig]

Its dishonest and he should pay his........only kidding! This should not effect you in any way, but if for any reason any questions were asked, simply claim he is paying you back for a previous loan you made to him.

[jelly-baby]

Yeah I did think maybe something like that would be ok to say, or that he had bought something from me. Thanks.

[THECORBYLOON]

If you are telling us not to say yir brother is dishonest and should pay his creditors you must think that yirsel. Why is he not paying his creditors first?

[Hard@it]

This could be a test of brotherly love

[WoWo]

What if you in good faith give him the cash card to get access to his "money", he witthdraws it all and then takes the account overdrawn? Your debt not his.

You say "He's my brother, he wouldn't do that".

I say "He has a history of debt and has no problem with being dishonest".

I'm sure there are also legal problems with this i.e. you may be breaking the law.

[WoWo]

"Please don't say he won't do it,because there have been many family members who have had similar problems,as all too many such questions here have proved."

In fact you only have to look at the answer directly bellow this and 3 above it to find out why this is a bad idea.

[jelly-baby]

He wouldn't have access to the account.

thecorbyloon - when you can spell, you can answer my questions.

he is paying his creditors but not as much as they want him to, hence the account. The interest is frozen on the debts and he is paying a minimal amount. He wants to save the money in a high interest account then pay the debts one by one. Then he will at least have some money from the interest.

[THECORBYLOON]

jelly-baby, please point out the spelling mistake(s) in ma reply.

[lady_p_gold]

Well regardless of Corbyloon's spelling it was still a reply to your question, even if it was not to your liking, so whether or not your brother is dishonest, you are certainly rude, sounds like a dodgy family all round.

[THECORBYLOON]

lady_p_gold thanks for that but jelly-baby needs to look up the word "dialect" before he or she passes any comments on ma spelling......

He or she obviously has doubts about the proposal but I'm not allowed to make any further comments.......

[sense4all]

As an aside to TheCorbyLoon as ma Grannie an' the Paisley Posse wid sae " Sodgers wi' big guns beat sodgers wi' pretty dresses!" (being practical is more important than being presentable!)

[stevie21]

If the money's paid into a savings account (as cash) and only ever withdrawn as cash then it's near impossible for the account to go overdrawn or default so I wouldn't worry too much about that.
Also, in principle I don't really see any moral problem with having �100 and investing it to earn the interest so that you can pay �105 to someone you owe rather than just giving them the straight �100.

Although with finance I'm usually one for sticking to all the rules I don't see any problem here.
In saying,
"he is paying his creditors but not as much as they want him to" do you mean they've agreed a minimum payment but would like a little more or that he's just not agreeing to their minimum?
I'd at least pay the minimum they ask if he can afford to save �200 a month.