The Unintended Consequences of Being a Joint Owner of Someone’s Bank Account

Did you know there is more to “Estate Planning” than just Wills and Trusts?  

Let’s say a family member or friend asks you for help with her finances, such as writing checks to pay bills.  For example, mom is travelling remote areas of the world for the next six months without access to computers or banks, or grandma is becoming confused about her bills, or your elderly neighbor broke her wrist and can’t write checks.  Worden Thane’s Estate Planning attorneys can help.    

Montana law authorizes a bank account owner to grant a non-owner authority to sign on the account.  A person with signatory authority does not have ownership rights to the bank account, but can sign checks and withdraw money.  Banks will usually require both you and the account owner to be physically present to make this change to the account.  

When you get to the bank, a banker may suggest that you be added to the bank account as a joint owner instead of a signer.  However, before agreeing to this, be aware that jointly owning the bank account may have unintended consequences for the account owner, and you.  

First, as a joint owner, your written consent is required for any future changes to the account. Obtaining your consent would be problematic if, for example, you were in an accident and could not communicate for a period of time, and your friend or family member needed to name a different signer for the account.  

Second, as a joint owner, the funds will be subject to claims from your creditors.  Your family member or friend can defend against this by establishing the funds do not belong to you; but, shemay not have the ability or resources to sort this out, putting all of her funds at risk.  

Finally, as a joint owner ‘with right of survivorship,you will become sole owner of 100% of the funds at the other account owner’s death.  However, the other account owner may have wantedthe funds to be shared among your siblings, other family members, or in the case of the elderly neighbor, her family.  If your joint ownership is not with right of survivorship, and you pass away, the surviving account owner has to establish that all of the funds belong to her and should not become part of your estate.  Again, this is an added hassle that puts your family member’s or friend’s funds at risk.

If the account owner has granted you a financial power of attorney, you can bypass the risks with being joint owner on the bank account, and instead, take that power of attorney document to the bank for authorized access to the owner’s account, and checks, for paying bills.  

Worden Thane’s Estate Planning attorneys are available to discuss the alternative ways you can assist a family member or friend with their finances, and help you determine the best approach.  

More From Our Blog

A Little Bit about Worden Thane’s Pet Family

By: Jennifer Shannon and Dawn Donham The practice of law is hard The answers are never black and white, the deadlines are strict, and sometimes our client’s fate comes down to aRead More

Estate Planning – What Does It All Mean?

By: Amy M. Scott Smith

If you’ve ever read articles online about estate planning, or met with an estate planning attorney, your head might be swirling trying to make sense of all of the various terms thatRead More

Worden Thane Thanksgiving Traditions

At Worden Thane, we believe it is of the utmost importance to celebrate the holidays with loved ones and dedicate time to sitting back and taking it all in We create time and space forRead More

Contact Worden Thane P.C.

While this website provides general information, it does not constitute legal advice. The best way to get guidance on your specific legal issue is to contact a lawyer. To schedule a meeting with an attorney, please call or complete the intake form below.