Would you set up a joint account with one of your adult kids?
As parents age, it's not unusual for them to open a joint bank account with one or more of their adult children.
In some cases, this is simply to allow someone else to do the banking and pay the bills, with no thought of that child receiving the money upon the parent's death. Others do it to avoid provincial probate taxes, fully intending that the child on the joint account gets the money directly.
Too often though, the parent's intentions are unclear. Confused parents may say one thing to one child and give a conflicting story to another. And then the fighting starts.
Worse still, joint bank accounts are increasingly being used as a vehicle to defraud older Canadians, warn estate planning experts. In the wrong hands, a joint account is the perfect method for unscrupulous adult children looking to bleed an estate.
The courts don't assume a parent or grandparent intended to give a gift to a child or grandchild from an investment account or piece of real estate held jointly, explains Rhonda Sherwood, a Vancouver-bassed advisor.
"The child or grandchild has to prove the deceased intended to transfer the title to the property or that asset on his or her death, which would be difficult to do without written instructions or a power of attorney."
In the meantime though, a joint account can give them the same cheque-writing and withdrawal privileges.
Have joint accounts backfired in your family? How do you handle family finances when someone has to step in?
By Gordon Powers, MSN Money