By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
A big problem with jointly owned bank accounts is it gives the joint owner, who did not contribute any money to the account, the belief that the account funds are immediately available and will automatically pass to the surviving joint owner.
Idaho law states otherwise. Idaho Code Section 15-6-104 defines who owns funds in a joint account after the death of a co-owner.
15-6-104. RIGHT OF SURVIVORSHIP. (a) Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent if an intent to give the account can be shown by the surviving party or parties. …
What does this mean in the real world? For example, a mother has a checking account with $30,000 of her money and puts a child’s name on the account for convenience. The child contributed nothing to the account. When the mother dies, the funds do not automatically belong to the child. The checking account will be part of the mother’s estate and distributed according to her estate plan and if there is no plan, then according to the Idaho Code.
Why not give the money to the joint owner child? The mother did not express an “intent” in writing to give the funds to the child.
How can “intent” be expressed and this problem be avoided?
- If the mother really wants the child who is on her checking account to receive any remaining checking account funds at the mother’s death, she could make the account a “Paid On Death” or “P.O.D.” account.After the mother dies the child gives the bank the mother’s death certificate and the bank will give the funds to the child who is listed as the P.O.D. recipient.
- The mother could also have a written statement in her “Last Will and Testament” or her “Revocable Trust” that states any jointly owned accounts are to be distributed to the surviving joint owner.
Many put another name on their bank accounts, not thinking of the mess created when a joint owner dies. Look at your own accounts to make certain you don’t create unintended problems after you are gone.
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