• Troyer & Good, PC

Joint Ownership of Property – Bank Account

Updated: Feb 12, 2019

Not all of your property will necessarily pass under your Will. Property may go automatically to another person if you have joint ownership. Who receives joint property on your death may depend entirely on the terms of a joint bank account, deed, or other contract. It is important to understand the consequences of joint ownership of property.

joint bank account

Joint Bank Account. Married couples often have a joint bank account. It’s also common for a person, especially someone older, to place funds in a joint account with a child or other trusted relative. Many times, this is done for convenience when the elderly person has difficulty going to the bank or anticipates an illness or incapacity. The elderly person usually has no intention of giving the child or relative any rights to take and keep the money now. Sometimes, the joint account is created to make a gift of what is left in the account at the older person’s death.

Indiana law makes certain presumptions about joint ownership. The three most important presumptions are the following:

  1. Ownership of a joint account is according to the amount each has contributed to the account.

  2. Any party to a joint account may withdraw all or part of the funds without the consent of the other.

  3. When one of the joint account owners die, any money remaining in the account belongs to the survivor named in the account, even if the Will says otherwise.

Another potential problem with joint accounts is it makes the account vulnerable to all account owner’s creditors.  For instance, if you add your child as a joint owner to your bank account and he or she gets into a car accident and gets sued, the child’s creditor can come after the money in the joint bank account.  For these reasons, you should open a joint account only if you trust the other person you name as joint owner and only after considering other options such as creating a Power of Attorney.

Also, if after your death, your bills and expenses cannot be satisfied by other assets in your estate, your joint bank accounts are not available to cover allowable expenses and taxes. When you need assistance with financial affairs and property management, a Living Trust and Power of Attorney may be better alternatives than joint bank accounts. The Power of Attorney ceases to operate at death, but a Living Trust continues to function by a Trustee. Call our office for advice on these matters before naming a child or other loved one as a joint owner.

Source: Indiana Laws of Aging by Indiana State Bar Association
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