I want to leave bank accounts to my children when I’m gone. Can’t I just make the children joint owners?
That idea sounds better than it truly is. Yes, you would avoid court proceedings when you pass. But you’d put yourself at risk, at a time when you might need your money yourself. Your accounts would be exposed to your children’s divorcing spouses, bankruptcy, liability for legal actions, or, last and doubtless most uncomfortable to think about, your children could simply spend your money without your permission.
The best way to resist temptation is to avoid the opportunity in the first place.
Plan for the Future of Your Finances
While you are alive, it is essential to designate a person you trust to pay your bills when you can’t. With our comprehensive power of attorney document, your trusted person can take care of your finances when you aren’t able. Avoid downloadable internet versions. Come see us instead. You don’t want banks and insurance companies rejecting your document as insufficient when you most need it!
Then, for when you pass, make your bank account “payable on death” (POD). You remain sole owner of your account during your lifetime. Then, when the time comes, the POD designation is a simple and no-cost way to leave your money to your heirs.
Just gather your heirs’ contact information, Social Security numbers, and birth dates. Then visit the bank, ask for their POD forms, and fill them in with the people or charities to whom you would like to leave your money. Tell your heirs what you are doing, and where your accounts are located, so they will know to come forward to claim the money at the appropriate time.
Power of Attorney
If your power of attorney is powerful and detailed enough, you can be confident that your trusted person will take care of your finances if you become disabled. For when you pass, you will have your POD in place to transfer your money to your heirs at that time. No fees, no court costs, and your accounts are covered. That’s a much better plan than a joint account.
For help with your planning needs, contact our Chicago office at (312) 641-9500. We’d be honored to help make sure your plan is what you want and that it is properly documented.