Dear Clients and Friends:
Joint bank accounts are very common and there are some very common questions that go along with them, like the following:
Would setting up an account as a joint account permit both parties to do business with that account?
The answer is probably yes, but it doesn’t have to be.
A joint bank account or investment account is a very common way to set up an account with your spouse, your children, or perhaps someone else important in your life. When you first set up the account you will make important decisions as to who will have access to the account while you are living and who will own the account upon your death.
Your typical joint account allows each of the joint owners to have access to the account, without the signature of the other joint owner. However, you do not have to set it up this way. Talk to your financial institution and attorney and decide if this is really what you want. Alternatively, you could set up the account with the signature of both owners necessary to transact business.
Also, a typical joint account is set up to have the surviving joint owner become the sole owner at the death of the first to die, avoiding probate. However, you can set up a joint account as a “convenience account,” where both joint account holders have access to the account (i.e, to pay bills), but the survivor may not inherit the account.
For example, let’s say that you have two children (son and daughter) but your daughter is the one that helps you pay your bills on a weekly basis. Making the account joint with her would be helpful to her to pay your bills but you may not want her to inherit the account at your death. You want everything to go 50/50. A convenience account in this case would be helpful because your daughter can help you but still share the account with her brother. Of course, you could trust her to do that, and most children are trustworthy. Most, I said.
Alternatively, you could keep the account in your name alone and give your daughter a durable power of attorney over the account to transact business.
The bottom line is that you should not rush into creating a joint account. Weigh the dynamics of your relationship with your joint owner and the relationship your joint owner may have with his or her siblings.
I hope this helps! Please forward this information to your friends and relatives to share these informative answers to some very commonly asked questions.
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Until next time,
peace, health and happiness,
Lawrence Eric Davidow