Thu | Jun 17, 2021

Possible solutions to the joint account dilemma

Published:Monday | June 25, 2012 | 12:00 AM
McGregor

In my last piece on June 11, I identified some concerns which may arise when one tries to direct what is to become of funds held in a joint bank account.

This week, we consider some possible solutions:

1. At the time of opening the account in joint names, state in writing your intention for doing so. For example, in many cases involving older persons who are physically impaired, a younger family member's name may be placed on the account "for the sake of convenience". If this fact is clearly stated in a letter or directive to the bank, it may prevent speculation after the death of either account holder.

2.By the same token, if it intended for the funds remaining in the account to be passed to the surviving account holder, this fact could be stated in a letter or directive to the bank at the time the account is opened.

3.With an account in your sole name, you could create an Enduring Power of Attorney that will allow another person to attend to all matters related to that account in the event that you become incapacitated.

4.While I am not certain whether bank accounts 'Payable on Death' exist in Jamaica, in other jurisdictions it is an effective tool to avoid some of the pitfalls of holding a joint bank account. With accounts 'Payable on Death', you maintain complete control over the account during your lifetime, and when you die, the account is payable to a surviving beneficiary, without the need for probate. The 'Payable on Death' beneficiary could be the executor, trustee or testamentary guardian appointed under your will and you could state that the funds are to be held on trust for the benefit of your children. You could exhaust the funds in the account if you wish, or change the 'Payable on Death' beneficiary at any time, because the beneficiary has no right to the funds in that account until you die.

5.Although the establishment of joint bank accounts is often touted as an estate planning tool to avoid estate duties, opening the account in your name alone will enable you to freely pass on the proceeds of that account to any beneficiaries of your choice. The savings in terms of estate duties may not be worth the risk of having your instructions misunderstood after you have died.

This list is by no means exhaustive; and for one person or one account, the solution may lie in employing a combination of the solutions. What is clear, however, is that the answer may not be as simple as it appears at first glance

Sherry Ann McGregor, partner and mediator, Nunes, Scholefield, DeLeon & Co. attorneys-at-law and notaries public, 6A Holborn Road, Kingston 10. Send feedback and questions to lawsofeve@yahoo.com or lifestyle@gleanerjm.com.