04-08-2005, 10:34 PM
Just goes to show how times have changed.
The simplest, least expensive tactic for dealing with
potential incapacity is to put some assets in joint
ownership, with right of survivorship. For example, you
might name your son John as joint owner of your bank
account so John can pay bills for you, handle deposits,
etc. However, there are problems with this tactic:
* At the death of one co-owner, the survivor automatically
inherits the balance of the account. That’s true no matter
what it says in a will. In the above example, John would
inherit your bank account while any other children will
be excluded.
* Joint ownership provides no protection against poor
judgment. If an elderly person decides to empty a joint
bank account to invest in some kind of a sham deal, there
is nothing a younger co-owner can do about it.
* The younger co-owner might spend the money improperly.
* Creditors of the younger co-owner may have access to
the joint account.
To reduce the need for joint ownership of a bank account,
arrange for automatic deposit of investment income and
Social Security checks as well as automatic payment of
utility bills. If some joint ownership is still desired,
limit the amount kept in the account.
Barb
The simplest, least expensive tactic for dealing with
potential incapacity is to put some assets in joint
ownership, with right of survivorship. For example, you
might name your son John as joint owner of your bank
account so John can pay bills for you, handle deposits,
etc. However, there are problems with this tactic:
* At the death of one co-owner, the survivor automatically
inherits the balance of the account. That’s true no matter
what it says in a will. In the above example, John would
inherit your bank account while any other children will
be excluded.
* Joint ownership provides no protection against poor
judgment. If an elderly person decides to empty a joint
bank account to invest in some kind of a sham deal, there
is nothing a younger co-owner can do about it.
* The younger co-owner might spend the money improperly.
* Creditors of the younger co-owner may have access to
the joint account.
To reduce the need for joint ownership of a bank account,
arrange for automatic deposit of investment income and
Social Security checks as well as automatic payment of
utility bills. If some joint ownership is still desired,
limit the amount kept in the account.
Barb