Parents often think that by adding a child’s name to a joint bank account, they are making things easy for the family in the event they die. While a joint account holder does have the ability to access the account on which he or she is named, owning assets jointly with one child could cause many problems and can cost you or your estate a lot of money.
Assume that an elderly mother had a son and daughter. She lived with her daughter and added her name to a joint bank account. In her will, she split everything equally between her son and daughter. If she dies, the funds in the joint bank account belong to the survivor account holder named on the account — in this case, the daughter. The son now has the burden of proving by clear and convincing evidence that the mother did not intend for the sister to be the sole owner of the money and intended for it to be divided equally. Clear and convincing is not easy to meet and the son could have a tough time proving his case if the daughter decided to keep the money. But, because the mother and daughter lived together when the daughter’s name was added to the account, the daughter would have to prove that mom added her name to the account for a reason other than convenience. In other words, she would have to somehow prove mom wanted her to have the money in the account. So, in the end, this joint account did not make things easier on anyone, And litigation about it will cost.
If you want to give access to someone to your bank account, a better way would be to execute a power of attorney giving someone the power to pay your bills. This can accomplish the goal of access but clarify that the account follows whatever is set forth in the will.
In short, if you plan properly you can save you and your family a lot of money and aggravation.
Recent Comments