A cautionary tale of multi-party accounts

On Behalf of | Jan 16, 2013 | Estate Planning/Probate |

Recently, a client contacted our office to assist her in distributing her father’s estate. Her father had a number of kids and requested that his estate be divided equally between them. Nothing fancy – sell the property and distribute it equally to each child. Well, as it turned out, her father also kept a joint account with one child listed as the joint owner. This account was supposedly to be used to help him pay bills and keep up with his finances. The account held a significant amount of cash. What her father apparently didn’t realize was that the account automatically transferred to that one child upon his death. Thus, that child will likely receive significantly more assets than the other children when the estate is wrapped up.Some folks intend for this to happen. Multi-party accounts can be an effective way of transferring assets without going through a probate process. However, failure to keep the above scenario in mind can result in a lot of hard feelings between family members.If you have multi-party accounts, take a hard look at how you want your assets to pass on your death. Preventing such a situation is not difficult; you just need to be proactive addressing such issues in your estate plan. If you have questions about this issue, please stop in or call us at (320) 763-3141.