Joint Accounts Can Help You Avoid Probate

Did you know a simple way to avoid probate is to have a joint account? This is especially helpful with elderly parents. You may find yourself in a position where you have to manage their finances, or pay bills for them on their behalf and it is much easier to do so when you’re a joint holder of the account.

If you choose to do this, keep in mind these things:

1) Joint account means everything in the account belongs to both people to spend as they see fit, regardless of who made a deposit. The joint holders do not need permission from the other holders to withdraw money.

2) Creditors of one of the account holders may be able to attach to the money in the account.

3) Eligibility for government aid and assistance may be affected.

4) Gift taxes may be applied to the funds in the account.

Even with these things above, establishing a joint account can make life (and death) easier. Just make sure both you and your joint account holder are aware of these items before establishing an account together and you are in agreement about how the account is to be used.