It’s easy to misunderstand how joint bank accounts work and understanding the risks of joint accounts is important when making decisions. In this Elder Law & Estate Planning Minute, Wes Coulson discusses a common estate planning mistake and the risks of joint accounts.
Common Estate Planning Mistake #2: Risks of Joint Accounts
Hi, I’m Wes Coulson and this is your Estate Planning Minute. This is another in our series on Common Estate Planning Mistakes.
This one is, if you will, one of my pet peeves. That is, that it’s easy to misunderstand how joint bank accounts work and the risks that are involved with joint bank accounts. Where do I start. For the first one, there are a lot of people who may have a Will that gives their estate to their three children in equal shares, and they put their oldest one’s name on all the bank accounts a joint tenant, which they think is for convenience. Well, the law doesn’t look at it that way. The law says you’ve left all of those assets when you die to that child. And, you know what? If that child decides not to share, well, too bad so sad for your other children. Worse than that, the money might not even make it through during your lifetime.
When you add somebody else’s name to your accounts as a joint tenant, you expose that money to every bit of financial risk that might befall them. So, if they get sick and have uninsured medical expenses, if they lose a job, if they develop a gambling habit, if they get in a wreck and get sued, that money legally is every bit as much theirs as yours and creditors can come after and successfully take every last penny of it, not their share, but every last penny of it. We discourage people from putting their kids’ names on accounts as joint tenants. If you come to see me, I will be happy to tell you about the much better alternatives. Thanks.
For more about Estate Planning, visit these articles:
- Safeguarding Your Estate Plan
- What’s the Difference Between Estate Planning and Asset Preservation Planning?
- Misconceptions About Wills
- Wills, Living Trusts and Powers of Attorney: How often should they be updated?
- Common Estate Planning Mistake: Failing to appreciate how assets pass upon death
Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (877)995-6876 or Contact Us and we will get in touch as soon as possible.