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
Posted by: Frank | Sep 29, 2021 11:09:02 AM
I had a joint account with both of my ex-spouses. That was a train wreck both times. The first thing they went for was the cash in the joint account. I have a joint account with my daughter now who I trust completely. I work overseas and I'm constantly away from home. It has been very helpful many times. Definitely not for everyone but it works for me.
Posted by: Lorna Moore | Sep 29, 2021 3:39:02 PM
I would set up a joint account with one of my children and not worry at all about any one of them abusing the account. I know they would be trust worthy and honest and would take care of my money probably better than I would. I had a joint account with one son previously in which I looked after his money while he was traveling and he trusted me with his money and it worked out well so I know we could do it the other way and have the same result.
If you raise your children to respect and honor you and you respect and honor them, there should be no problems with money in your old age.
Posted by: mortgage help | Sep 29, 2021 10:41:57 PM
Having a joint account with only one other older family member will really start a fight to those other family member who you did not have a joint account. There will really be a fighting or misunderstanding to happen if you won't talk about it and give your reasons. And also there are some cases that the children who the parents trusted with the joint account will abuse the trust that was given by their parents.But there's more of the advantages of it..Its up the those who are joining account if they'll abuse it or not.As long as it will be great if there will be no abuses to the trust.
Posted by: annie | Oct 1, 2021 12:34:58 AM
I had a joint bank acct and power of att'y with my fathers accounts. It worked for my family (2 other siblings) because I lived closer to them and the whole family trusted me. I can see how it could be abused or cause hard feelings in a family...it did work for us. I sent or showed my family all the acct'ing and having this did make life so much easier when he died.
I will do the same for my kids, it is important to give had over this trust and responsibility.
Posted by: Anon | Oct 1, 2021 1:26:16 AM
I was unaware that once you made your account joint with someone they could not be removed and you are forced to close your account and reopen a new one if you want an account in just your own name again. This was a severe pain for me at my local Scotiabank.