My client is a Power of Attorney (POW) for his mother who became incompetent this fall. As the POW, he asked me to track her income/expenses starting this fall and to prepare regular financials which he can give his siblings.
The issue I'm having is that my client has some personal loans and mortgages that his mother has co-signed. Since these are HIS loans/mortgages (not hers), he is making all the payments on them. She receives monthly bank statements on these accounts since she has co-signed on them. As a co-signer, his mother is equally liable for those accounts in the event that her son can no longer make his payments. As such, those accounts have to be recorded on the mother's financial statements. How do I do this without making his payments into those accounts appear as income on his mother's financials, and also not coming from any of her accounts? I've hunted online, but can't find any clues to answer this.
I'm thinking I need to show the starting value for each account as of the date the POW was activated, and then show the regular changes in these accounts (interest charges and his payments (and/or expenses) into the account), to reflect the ending balance each month, so that the family has an idea that their mother could be liable for these costs if something happened to his brother and he couldn't make the payments. I've considered creating a Clearing Bank Account in which to receive HIS payments to these accounts and then transfer the payments to the applicable loans. However, when I go to "Banking => Make Deposits" into the Clearing Account, specifying the son as employee for Quickbooks purposes), I'm also asked to specify a "FROM" account, which again stumps me, as it again would need to be a temporary account, possibly a Shareholder account??? Also I don't think we want to specify an interest expenses account to track the interest charged on these accounts, or do we?
Thank you.
Gerry
