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McCurrie McCurrie
& McCurrie, L.L.C.

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Kearny, NJ 07032-3010
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Power of attorney vs. sharing bank accounts with kids

New Jersey readers, who want to make sure their elder years proceed smoothly, might choose to set up joint accounts with their spouse or children instead of looking for a more solid solution like a power of attorney. These accounts provide a way for kids to pay their parents' bills or medical expenses as well as take care of any day-to-day needs that might arise.

While no one can dispute the convenience of such a method, these well-meaning individuals might be creating unforeseen problems down the road, both for themselves and for their children or caregivers. A recent article published in Elder Law Answers explains the drawbacks of relying on solutions like these during one's elder years.

The first drawback talks about the various risks associated with joint accounts. These risks can include anything from one child withdrawing money without consulting his siblings or parents to creditors of one of the account holders having access to the funds.

The second disadvantage revolves around a possible disparity between the amount of funds children might inherit following death. Specifically, the article explains that if not all children are named as a joint account owner, the unnamed kids might get a lesser share of the inheritance. Most parents expect their kids to share equally, but this doesn't always happen, resulting in possible contention between siblings.

Finally, the article discusses the ever-present threat of unexpected events that might mess up those carefully laid out joint account plans. For instance, if the child or children die before the parent, the estate might have to pass on to conservatorship. Another example is, if in the process of paying daily expenses, the bank accounts are basically emptied, which could happen if too many fingers are dipping into the pot.

A better and safer solution is speaking with an estate planning attorney or even a financial professional about creating a durable power of attorney. This allows parents to protect the inheritance they plan to leave their offspring while also making it easier on their children.

Source: Elder Law Answers, "Three Reasons Why Joint Accounts May Be a Poor Estate Plan" Jul. 18, 2014

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