Seniors often need some help with their daily finances and may add a child or adult grandchild as a joint owner of savings or checking accounts to write checks and make sure bills are paid. But there can be problems.
The person named as the joint account holder has full rights to the money and can withdraw and spend for any reason. Also, that person becomes the sole owner when the older person dies, no matter what that person may have wanted.
A story in Newsday details the case of a 95-year-old woman whose granddaughter — the joint account holder — went through $100,000 in savings in two years. And there was nothing illegal about it.
There is a way around the problem, however. The grandmother could have set up a convenience account, allowed in some states. It means the other joint account holder can only legally use the money to benefit the original owner. And when the older person dies, the money goes into his or her estate.
The article suggests asking your bank if such accounts are allowed in your area. It notes that banks do not publicize such accounts.
If you have questions about elder law, feel free to all us for a consultation at (626) 696-3145.
