An elderly parent who is a widow/widower frequently believes the children will live in a harmonious, caring and sharing relationship after the death of the parent. While this may prove accurate, it frequently is an unrealistic fantasy and there is no guaranty the parent’s expectations will be met. Attempting to explain this to a parent is often met with the response: (1) “my children have a wonderful relationship and care deeply for one another”; or (2) “I trust my child completely to carry out my wishes”. It has been proven time and again, the relationship between/among siblings changes once both parents are deceased! Nowhere is this more clearing illustrated than in the case of the greedy child.
For simplicity and ease of administration, the parent names a child as a joint owner on a bank account or bank accounts. The parent’s explanation for this action is the child can access the funds and pay the parent’s expenses should the parent become incapacitated and unable to do so. The parent explains: “I know my child will use the funds for my benefit while I am living and after my death my child will divide the remaining funds equally among my children.” Once the parent is deceased, however, the greedy child will remember the arrangement differently! “Mom/Dad wanted me to have the funds remaining in this account because I was the caregiver.” With limited exceptions my clients tell me this will not happen with the parent’s child. My experience as an attorney since 1970 proves otherwise!
Unfortunately, in Arizona when an account is titled jointly, ownership of the funds remaining in the account at the death of one owner pass to the surviving joint owner. There is no legal obligation to “share” the remaining funds with the siblings. The parent’s will has no bearing on ownership of the remaining funds. The parent’s trust has no bearing on ownership of the remaining funds because the account is owned individually by the parent and child; not by the trust! Ownership in both instances passes outright to the child.
There are estate planning techniques available to meet the parent’s plan (have a child who can pay expenses of the parent if the parent becomes incapacitated and see the remaining funds are shared by all the children). The solution is NOT joint ownership.
The attorneys at West, Longenbaugh and Zickerman can provide simple alternatives which accomplish the parent’s objectives. Contact us for assistance. We provide big firm representation and small firm caring for our clients.