Often, older people will add the name of one or more of their children to their checking accounts or brokerage accounts. They might do this to make it easier for the children to help them with their financial affairs. Or they might think that it’s a clever way to avoid probate.
Joint Ownership In Raleigh, North Carolina
Joint ownership can be good in some cases, but there are a number of dangers in setting things up this way.
To illustrate, imagine that Anna has three children – Barry, Louise, and Todd – and she adds their names to some of her various accounts so they can help her with her finances. What could go wrong?
What Can Creditors Come After? Raleigh NC Lawyer Tips
A child’s debts. Suppose Barry loses his job, and runs up large debts. Since Barry is a joint owner of one of Anna’s accounts, his creditors could potentially come after Anna for repayment. Or suppose Barry owns a business, and personally guarantees a business loan. If the business goes under, Anna could be on the hook.
Joint Accounts in Raleigh Can Lead to a Lawsuit
A lawsuit. Suppose Louise causes an auto accident, and the injured driver sues her. The driver might be able to empty Anna’s bank account as well as Louise’s.
What About Joint Accounts in a Raleigh Divorce?
A divorce. If Todd gets divorced, his wife could potentially claim some rights over a joint account. If Todd’s wife makes a claim to divide an account, Anna might be required to trace and prove the entire history of her contributions to it. If she can’t do so, then Todd’s wife might have a claim on it.
A family fight. When Anna dies, any assets in her joint accounts will go to the co-owners named on those accounts. If Anna has a will that divvies up her other property, it won’t cover the joint accounts. If Anna intended to ultimately split her property evenly among her children, that might not happen – which could create animosity between the siblings. And even if one sibling wants to make things right and offers to even things up with the others, this might create gift tax problems that could easily have been avoided.
An estate planner can suggest alternative ways to avoid probate and allow children to help with finances.
Contact The Law Corner For Help with Your Estate Today!
The Law Corner Raleigh Estate Plans
There are four basic planning needs for all individuals independent of income, assets, debts, health, age or status. They are the Will or Will with Testamentary Trust, a Living Will,Financial Power of Attorney, and a Health Care Power of Attorney. These documents are perhaps the most important legal documents the average American will ever sign. Yet, the overwhelming majority of adults in the United States do not have one or the other. There are many misconceptions as to whether someone needs estate planning. To learn more, click the subject areas above. I am sure you will gain an understanding of the importance an estate plan plays in all our lives.
Thank you for visiting us on the web, we look forward to serving you. Call (919) 424-8319and schedule an appointment. Please make sure to bring any prior estate planning documents with you.
The Law Corner Attorneys help people all over Wake County to include the following areas: Knightdale, Wake Forest, Raleigh, Morrisville, Apex, Wendell, Zebulon, New Hope,Cary, Rolesville, Fuquay-Varina, Holly Springs, and Garner.