Читать книгу Protect Your Elderly Parents - Lynne Butler - Страница 27

Although this particular alternative is fraught with potential problems, it can be a good solution for a limited number of families. Using this alternative should be approached with a great deal of caution. Think it through carefully.

The basic idea is to put an asset that is currently owned only by the elderly relative, usually a bank account, into joint names. The dependent adult would be one of the joint owners and another person, usually a child of the dependent adult, would be the other owner. The purpose of doing this is to allow the child access to the bank account so that the dependent adult’s pension and other cheques can be deposited and monthly bills can be paid. The advantages of taking this approach are that it is quick to set up, simple to operate, and there is no court involvement.

Sometimes, however, this arrangement is much more to the advantage of the child than the dependent adult. There is a huge risk that the dependent adult’s money could disappear and this risk should be very carefully considered. Many an otherwise honest person has dipped into his or her parent’s funds to cover short-term losses, only to find he or she could not replace the money. In other cases, if the child owes money to a third party, the joint bank account could be garnished to satisfy a debt, causing the parent to lose his or her savings. There is little or no protection for the dependent adult in any of these situations if he or she has voluntarily set up a joint bank account with the child.

The other major problem with jointly held assets is the distribution of those assets when the dependent adult dies. Any asset that is jointly owned, such as a joint bank account, gives both owners a right of survivorship. This means if the dependent adult and his or her child jointly own a bank account, when one of them dies the other one automatically owns the whole bank account. This can have serious ramifications within a family and can be the cause of bitter disputes, particularly if it interferes with an estate plan contemplated by the dependent adult. Consider all aspects of this approach, including how it looks to other family members, before going ahead.

For example, if Mr. Smith owns $15,000, he might put $5,000 into a GIC in his own name and the remaining $10,000 into a joint bank account with his son, Jim. Even though Mr. Smith’s intention was only to give Jim access so that he could help with the banking, when Mr. Smith dies, Jim will own the $10,000 in the account. If Mr. Smith has three other children who will share the $5,000 GIC between them, they might be quite upset at the fact that Jim has received so much more money than they have. Perhaps Mr. Smith trusted Jim to divide the money among his siblings. Or, maybe he wanted Jim to own the money. You will have only Jim’s word for it. This could lead to a bitter, expensive dispute if the siblings believe that Jim influenced, or attempted to influence, their father for monetary gain.

It is never a good idea to ask an elderly relative to put his or her home (or other real estate) into joint names with yourself or any other person without ensuring that the elderly relative sees a lawyer on his or her own to discuss the transaction first. You should not attend that meeting with the lawyer. Let your elderly relative handle the matter on his or her own. If the elderly relative does not understand the transaction or its effects well enough to explain them to a lawyer on his or her own then clearly your elderly relative does not understand what it means to sign over title to the home. Legal documents should not be signed by individuals who do not understand what the documents are and the effect they will have.

A useful legal document sometimes used in conjunction with putting assets in joint names is a bare trust. This brief document simply states that although the asset is in joint names, the elderly relative does not intend that his or her child will own the property after the parent’s death. The document specifically states that the child’s name was only put on the asset for convenience. It is not a good idea to try to draft a trust like this on your own; it is better to have that done by a lawyer. It can be done quickly and inexpensively by a lawyer.