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Estate planning vs. convenience banking

May 17, 2013

 

Estate planning versus convenience banking: Does setting up a joint bank account with your elderly parent confer an ownership interest in that account to you, or is it merely a “convenience” account in which you have no ownership interest upon your parent’s passing?

When an elderly parent adds the name of their child to a joint bank account, that addition can either confer an ownership interest in that bank account to the child, or it can be deemed merely a “convenience” account which does not confer any ownership interest at all to that child. Joint bank accounts are commonly considered to confer an interest in half of that account on the added party. However, when joint accounts are set up between elderly parents and only one of their children, such accounts can be the source of messy and avoidable estate battles. If the joint nature of the account is challenged during the administration or probate of the parent’s estate, the burden rests on the challenger to either (1) establish fraud, undue influence or lack of capacity or (2) show proof that the joint nature of the account was set up merely as a convenience and not with any intention of conferring an interest in the account on the child. Although the signature card can be key to resolving this issue, especially if it specifically states that the account is “with rights of survivorship”, it is not conclusive proof.

 

 

 

 

 

 

Prior results do not guarantee a similar outcome. All information posted is general advice only, based upon the rules of NYS, and is not intended to be a substitute for personal legal advice. Although information provided here was accurate as of the date of posting, laws change frequently and rules in other jurisdictions may differ. Therefore, readers should not rely upon these postings but should consult an attorney to discuss their specific factual situation.

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