Joint account

Why don't you ask the bank?

Re: Joint account


In this country, a joint account can be accessed equally by the account holders. It would make no difference if one of you was in a nursing home.

I'm pretty sure this will work the same way where you are, but yes, you should check with your bank.

Re: Joint account

Surrender them to whom?

Each owner of a joint bank account is the owner of the entire account. In other words, if Robert Xyz and John Xyz are co-owners of the account, then Robert owns 100% of the account and John owns 100% of the account. Robert could withdraw all of the money from that account today and John could do the same. Not a very good setup if you don't trust the other person on the account. That's one of the disadvantages of joint accounts. On the other hand, it's also one of the advantages. It's a useful way to transfer funds from parent to child without having the money go through probate. Many seniors, for instance, will fund a checking account held jointly with their children as a way of passing the money without it going through the estate.

Of course, the IRS is wise to this particular maneuver, and it will scrutinize these kinds of accounts to make sure that they are not used solely for the purposes of avoiding taxes on the transfer of wealth. Whether other agencies (such as Medicare, which is probably what you're asking about) consider the money in a joint account to be part of the parent's assets in determining eligibility for assistance is another matter. I suggest you call the relevant agencies and ask.

Are you in the U.S., wenchris? If you are counting on Medicare for nursing home expenses, there could be a problem. There is some sort of assets test. They include the house in the calculation, from what I understand. Should you start shifting ownership, I believe it needs to be more than two years before the event to avoid the transfers being considered shams. This is pretty much word of mouth; I'm only trying to give you a few points to investigate.

If you go this route, your father is not going to like it. You probably won't like it, either.

This is pretty standard. In the UK, for government-funded elderly-care programmes, the value of any house wholly owned by the recipient of the care, and any savings over a certain figure (about £16,000, $32,000, I think) are taken into account, and giving the asset(s) away to avoid them being assessed can be classed as "wilful divestment", after which the assets are treated as still being in the possession of the care recipient, and the fees calculated accordingly.

Roger,
I believe it was recently changed to 5 years (asset shifting). That was the last I saw anyway.

wenchris- Welocme to A2K!

As far as I know a person cannot hold an IRA account jointly. The child can be named as a beneficiary, though.

Right. It used to be three years, but too many people were shifting assets around to avoid the money being used up to fund the parent's stay in the nursing home.

Yes I am the beneficiary on the IRA, was just trying to get the point across.
Thanks for the info Mr Xyz

I stand corrected.

Roger, I am not even sure when it got changed. If, and that is a big if, I remember right, it was really recent like 2006 or 2007.