4TH BIGGEST MISTAKE IN ESTATE PLANNING (Part 1) – HAZARDS OF JOINT OWNERSHIP OF BANK ACCOUNTS

 

  1. Each joint owner owns 100% of the entire account.

               One of the biggest hazards of joint ownership is the right of each owner to withdraw all of the money from the joint account. Joint ownership means each joint tenant possesses 100% ownership of the account. So you can open a bank account and deposit all of your own money into it, but as soon as you add another person’s name to the account the money becomes just as much theirs as it is yours. Unfortunately, withdrawal from jointly owned accounts is not dependent upon who the money truly belongs to – each joint tenant has the ability to withdraw what they please. Consequently, 100% of the assets of the joint account are liable for debts of the joint tenants. For example, suppose Mom has a bank account that has $5,000.00 in it. Suppose her son has a judgment against him for car repairs totaling $4,500.00. Mom adds son’s name to her account. Now, son’s creditor can withdraw $4,500.00 satisfy the debt – regardless of the fact that Mom is not the one in debt. Of course, these issues are difficult to sort out and can lead to litigation between joint tenants, which can be very costly for both parties involved.

               Call (248) 643-9530 or email info@zeiglerlaw.com for a consultation.

For more information visit our website http://www.zeiglerlaw.com/how-to- avoid-probate.html

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