When you open an account at a bank or brokerage firm, you have a choice of opening your own, individual account or a joint account with another person. Many times, couples who are married choose to open a joint account so that they can both have access to the account. While this often works fine, there are many situations where joint accounts can derail your estate plan, resulting in your assets not passing according to your wishes, as stated in your Will.
Here’s the key fact: under Georgia law, if you have a joint account with another person, the entire balance in that account at the time of your death passes to the other joint owner. So, the entire account goes to that person, even if your Will leaves everything you own to someone else.
This may be fine – if you’ve been married for years and have children together, you may want everything to pass to your spouse first, and then to your children. Or maybe you have no children and just want everything to pass to your spouse. Having your accounts titled jointly will accomplish this, and may avoid probate in passing the assets to your spouse. But what if the facts are different?
Joint accounts can result in some very unpleasant surprises. Unfortunately, we have seen this happen in numerous probate cases handled in our office. Two situations that are particularly dangerous are the elderly client who adds a child’s name to his or her accounts, and the second marriage situation where all assets are held jointly by the two spouses.
Typical Elderly Client Scenario: Your mother is getting up in years and needs help paying her bills and keeping up with her finances. There are two children. You live out of state, so your sister, who lives nearby, offers to help mom with all of this. Mom decides that the best way to do this is to “add my daughter’s name to my accounts.” So, they go to the bank and mom adds your sister’s name as joint owner of all of her bank accounts. Your mother’s Will leaves all of her property to her two children in equal shares. Unfortunately, no one explains to your mother that her bank accounts will pass 100% to her daughter who is now the joint owner of the accounts. When mom passes away, the Bank pays all of the money in the accounts to your sister, and you receive nothing.
Typical Second Marriage Scenario: Your father is lonely after your mother’s death, so he re-marries at age 65. Like many married couples, he and his second wife decide to put all of their accounts in joint name. Your father’s Will leaves a portion of his estate to his second wife, but the majority to his children from his first marriage. Unfortunately, if dad dies with his assets titled this way, everything will go to his second wife and nothing will pass to his children unless his second wife decides to share the money with them. Since she has children of her own from her first marriage, she intends to leave everything to her own children. Result – dad’s children have been disinherited.
When we work with clients on their Wills and estate plans, we always review the total picture – including how all of your assets are titled. It’s critical to do a comprehensive review of what you own and what names are on each account or each real estate property. Otherwise, your true final wishes may not be honored. If you go to an attorney and they just draw up a Will for you without looking at the big picture, your family could end up with an unpleasant surprise.
If you want to be sure your assets are titled correctly, and that the terms of your Will are not superseded by joint account titles, the attorneys at Baker Law Group are here to help. Just give us a call at (770) 992-4325 or email us: email@example.com