In my Atlanta estate law practice, I work with clients on a regular basis regarding accounts owned by a parent who added another person (most often a child) prior to the parent’s death (i.e., joint accounts). The problem that arises is that, upon the death of the parent, Georgia statutory law presumes the parent wanted the child who was added to receive all funds in the account, but other children of the parent typically do not believe such an outcome was intended by the parent. Therefore, the other children seek to pull those funds into the parent’s estate where it will be divided according to the parent’s will or Georgia intestacy laws, in which case the other children are likely to receive some portion of the funds.
Joint accounts between parents and children are problematic because of the several ways the parent’s actions can be interpreted. Did the parent really intend the child to receive all of the funds in the account when the parent died? Maybe. Joint accounts can be useful estate planning tools, but if the parent does not tell his other children about the account and makes no mention of the account in his will or some other document, the other children understandably question the result.
Perhaps the parent added the child simply for the convenience of having another person available to write checks and perform other transactions. Parents who are facing a long-term illness often add a child for convenience, knowing that the illness may eventually lead to their incapacity. Having a child as joint owner avoids an interruption in the use of the account funds. I suspect parents in these circumstances either do not fully grasp that their child will receive all funds remaining in the account to the detriment of the other children or trust the co-owning child to be fair and either divide the money with the other children or pay it into the parent’s estate.
I would advise anyone thinking of adding her child to an account, whether for estate planning purposes or for convenience, to consider alternatives. If for estate planning purposes, designate the child a pay-on-death beneficiary of the account instead, or make a will that specifically provides for the distribution of the funds in the account. If for convenience, ask the bank to add the child to the account as power of attorney only, not as joint owner. If both, do both: use a POD designation or will provision, and add the child as power of attorney. The result will be a clear indication of the parent’s intent with regard to the funds and the avoidance of unnecessary litigation.
If you have questions about how to set up your accounts or any other aspects of your estate, or if you are facing a problem with a joint account left behind by a parent or any other person, please email me or call my firm 404-467-8613 to speak with an experienced Georgia probate attorney. I look forward to hearing from you and helping you get the result you deserve.
