Elders: Be Careful With Joint Bank Accounts

Contributed by Frank May.

Although it is common for older folks, as a matter of convenience, to add a child’s name as joint owner on bank or credit union accounts, there is significant danger of unexpected or unintended results at death, or during life, if significant funds are deposited in such accounts. A statute and case law in Connecticut provide a strong presumption that any funds held in joint name will belong to the surviving account owner when one owner dies. The funds will not become part of the deceased person’s estate and will not pass to beneficiaries under the terms of a will or by statutes governing intestacy (dying without a will). The deceased person’s plans for his or her estate may be significantly upset if significant funds are on deposit in joint accounts.

Disputes between and among surviving children are more likely to arise if one child is a joint owner, as that child will own the assets in that account unless other children can prove, by “clear and convincing evidence”, that the decedent did not intend that result or that the named child committed fraud related to the account (Connecticut General Statutes §36a-290. “Clear and convincing” proof requires more than a “preponderance” and less than “beyond a reasonable doubt”. The facts required to prove a different intent must be “strong, positive, free from doubt and full, clear and decisive”. It is a difficult burden of proof to meet. See for example Geci v. Boor, 178 Conn. App. 585 (2017).

During life there is also the ongoing risk that any child who is a joint owner of an account holds the power to withdraw any funds in the account for his or her own use, which may occur without anyone else being aware. The takeaway is to be cautious in depositing more than is needed for convenience in a joint account, and in choosing who will be the joint owner(s). A clear statement of intent while alive, perhaps in a will or sworn affidavit, may tip the scales towards protecting the intended beneficiaries who are not joint owners, but it is not a foolproof method of avoiding an unintended result or intrafamily strife, and it provides no protection against inappropriate withdrawals during life. It is best to not use joint accounts or keep the balances limited to what is necessary for ordinary living expenses.

To discuss the implications to your estate or family of adding a child’s name as joint owner on your bank or credit union account, or how best to manage such an account to minimize the risks, or any other estate planning, probate or elder law issue, you can contact Frank May at 860-659-0700 for a consultation.