Taxation & Estate Planning

Convenience Accounts

By Joel A. Schoenmeyer

Here's a piece of legislation that might actually help(!).

For a long time there's been an issue involving a decedent and joint accounts. Mom is elderly, and you (daughter) help her out with her banking. Mom adds you to her checking account with a $50,000 balance. Did Mom mean for you to...

1. Simply write checks on her behalf, for her convenience? OR

2. Inherit the account upon her death?

You might say #2; your siblings might say #1. In any case, it's a mess. But maybe P.A. 96-123 will help. As estate planning and probate guru Patricia Brosterhous explains it:

Effective January 1, 2010, a ?depositor? (primary account holder), can create such an account for the purposes of permitting a ?convenience depositor? access to pay or deposit funds for the convenience depositor. Deposits made to such an account will not affect the title, the depositor shall not be considered as having made a gift, and the convenience depositor shall not have any right of survivorship in the account.

Full post as published by Death and Taxes Blog on September 18, 2009 (boomark / email).