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Publications | April 9, 2014
2 minute read

Putting Adult Children on Bank Accounts is Risky

To be or not to be (the joint owner of a parent’s bank account), that is the question. And here’s the answer: Naming your adult child as a joint owner of your bank accounts is risky.

If you’re adding the child to the account because you need help with your banking, you run the risk that the child will claim to be the sole owner of the account after your death, which may be contrary to your wishes. If you’re adding the child to the account because you want him or her to receive the account funds when you die, you run the risk that your other children – whose names you left off the account – will try to thwart your intentions after your death.

In the Soltys Estate case, mom and dad put daughter Kathleen’s name on several bank accounts as a joint owner. After mom and dad passed away, their other children, Dennis and Marlene, claimed the parents only put Kathleen on their accounts for convenience, not because they wanted her to own all the funds after they died. Following a trial, the St. Clair County Probate Court agreed with Dennis and Marlene and ordered Kathleen (through her estate) to give one-third of the account funds to each of her siblings. On appeal, the Michigan Court of Appeals agreed with the Probate Court’s ruling. (Docket No. 311143, decided Jan. 7, 2014.)

The moral of the Soltys case is this: If you want to put someone on your bank accounts as a joint owner, you must clearly express what you intend to happen to the account funds at your death.

The law presumes that a surviving joint owner gets the remaining account funds when the first joint owner dies – but that presumption can be overcome by evidence that the first joint owner actually intended something different. Dennis and Marlene overcame that presumption by testifying that mom and dad always told them that the three children would be “treated equally” as to their parents’ assets (among other evidence).

And it’s not enough to just tell somebody your intentions. That person might forget, remember your words incorrectly, move away or die. Even if the person is available for trial and has a perfect memory, the Michigan hearsay rule only permits such testimony to be admitted if you made the comments to the witness before you added the joint owner to your accounts.

Put your intentions regarding joint accounts in writing. Your will is an excellent place to state what you want to happen to your joint accounts at death.