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Joint Accounts With Children Can Cause Big Family Problems

On Behalf of | Jul 18, 2012 | Assets, Estate Planning, Family Inheritance, Firm News, Joint Account |

Sharing The Account With A Designated Child

When Mom or Dad is in failing health, the adult children may think it is a good idea to put one or more of them on the parent’s account and make it a joint account. The idea is that the designated child can deposit the parent’s income, pay their bills, and divide up the funds in the account between their siblings when Mom or Dad dies.

What Can Happen With A Joint Account?

This can be a very dangerous thing to do, as a recent Minnesota Supreme Court case showed.

In that case, the daughter Maureen was put on Dad’s certificates of deposit. The family thought Maureen was named on the accounts just to handle his income and expenses. Maureen deposited none of the money that went into the CDs.

However, when Dad died, much to the shock of her six brothers and sisters, Maureen claimed that the joint accounts were her personal property and not part of the estate.

How Did Her Siblings React?

The siblings sued Maureen to try to get the CDs put into the estate.

The siblings argued that Dad had always said that all the kids were to get equal shares of his estate. They introduced a copy of his will that also said the siblings were all to get similar portions of the estate.

A jury listened to the evidence and concluded that Dad wanted all of the siblings to share equally. The court concluded that Maureen should put all of the certificates of deposit back into the estate.

The Supreme Court Makes A Decision

The case went up to the Minnesota Court of Appeals and ultimately to the state Supreme Court. The high court ruled that Dad never said or wrote anything that specifically said that the CDs belonged to all the children. The Court concluded that the Joint Accounts all belonged to Maureen, in spite of the jury’s decision.

The court’s decision was criticized, due to the fact that many families do this as a matter of convenience and do not think the parent intends to benefit only one child.

The message of this recent court decision is that families should meet and discuss arrangements for a parent’s financial care before going to the bank or credit union to make these kinds of major changes to any accounts. When considering an estate plan for an elderly Loved One, it is always wise to discuss the legal implications with an experienced estate planning attorney.

The contents of this article are for information only and are not to be interpreted as legal advice. For personal legal advice you should consult with an attorney who is experienced in probate law or estate planning. The U.S. Treasury Department requires us to advise you that any written tax advice cannot be used and is not intended to be used by any taxpayer for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Written advice from our firm relating to any Federal Tax matters may not, without our express written consent, be used in promoting, marketing or recommending any entity, investment plan or arrangement to any taxpayer.