Joint Bank Account ? ? ?

[TonyC]

Hi all,

Not sure if anyone can answer this...but i thought i would put it out there.

I share a bank account with my mother...as she gets older, i was concerned about people ripping her off. (i already had a Dentist, take her to the bank and get her to sign over a check to him for dental work...its a long story but).

So i was added to the bank account so that it now requires 2 sigs to get any money.

I was wondering, if my being on the bank account, along with my mother, was good enough to avoid probate?

What about taxes on that account when she passes...will i have to pay taxes on the account when this event occurs?

thanks for your constructive input...

~T

 

[leevena]

We went through a similar event a few years ago. One of the siblings was on the checking account and had signing authority also. The first issue you need to be concerned about is co-mingle of funds. Our accounting was very clean and easy to follow because all debits and credits were for the parent and could be proved very easily. These consisted of the SS deposit, pension check deposits and a few odd ball amounts. Expenses were mortgage, utilities, property taxes, medicare supp, etc.

The sibling on the account did not have any issues with taxes for themselves. When the parent passed away we simply stated the amount in the account to the probate court, told them about the sibling and there was no problem. After 9 months we closed probate and disbursed the funds, including the amount in the bank account.

As for taxes on the amount of estate, that is different from state to state. But the amount in the checking account, if it was all your mothers, is part of the calculation for estate tax purposes.

 

[xrac]

I am not an attorney but my understanding is it depends upon how the account is title. If the account is set up as tennants in common the account would be frozen and would go through probate. If it is set up as joint tennants with right of survivorship then ownership of the account with pass to the surviving tennant.

 

[briko3]

I am not an attorney but my understanding is it depends upon how the account is title. If the account is set up as tennants in common the account would be frozen and would go through probate. If it is set up as joint tennants with right of survivorship then ownership of the account with pass to the surviving tennant.

Yep...and THAT is usually based on the type of account it is and who the co-owner is. Most banks won't allow you to title it that way if it's not a spouse.

 

[Franz Kafka]

Depends on what state you are in and how much probate-able estate your mother will leave behind. In Cali, below $150K of probate-able estate gets excluded from probation. If the bank allows joint tenancy, none of it gets probated. If you're talking about estate taxes, you don't need to worry about it unless she has millions.

 

[Cornelius]

You might want to speak with an Attorney who deals with Elder law because what if at some point LTC issues crop up? You might also want to consider having some Powers Of Attorney paperwork done in case it's not in place now.

One more thing. I think in Cali. the limits are $20,000 in personal property or $100,000 in asset.

This is site just posted for purposes of information.
http://www.estateprobatelawyer.com/probate1.htm

 

[Franz Kafka]

One more thing. I think in Cali. the limits are $20,000 in personal property or $100,000 in asset.

This is site just posted for purposes of information.
Probate Basics

The new increased amount of $150K became effective as of 01/01/2012.

 

[turkjey5]

depends on the state. In PA we have an inheritance tax. If the joint acct was created within one year of the owner's passing, the co-owner (and presumably a non-spousal heir) pays tax on 100% of the total acct value. If the joint acct was created more than one year before death, the survivor, if non-spouse, pays tax on 50% of the acct, period, no matter who put what into it. It still goes through probate. The only way to avoid probate that I'm aware of, w/o setting up a trust, is to do a POD or pay on death designation. How that would work with a joint acct, I don't know, simply call the bank, they are used to doing these. The acct would still be liable for estate taxes, should any be due (and inheritance taxes in PA).

 

[g-squared]

The sibling on the account did not have any issues with taxes for themselves.

Didn't the sibling have to declare the amount of funds that were disbursed from the account after probate as income on her personal tax return in the year the income was received?

I believe the OP would have the same issue when/if he were to inherit the money in the jointly titled account.

 

[Jack_Merton]

I agree with, Cornelius. The state has a say in how this is regulated. May want to check local laws.