Unexpected Ramifications on Having a Joint Account

By Bernard A. Krooks, Certified Elder Law Attorney

Clients ask this question very often or they advise us that “I’ve put my son Bill on my accounts because when I die, I know he’ll need money to pay for his household expenses right away. I trust him and he has always done the “right” thing. He’ll divide what’s left equally among all his siblings, in accordance with my wishes” 


At first blush, this might seem like a pretty straight-forward arrangement; however, there are considerable risks associated with this plan.  Putting someone “on” an account usually means “Joint with Rights of Survivorship.” For this type of account, when any of the owners dies, the assets will automatically transfer to the surviving owner (or owners).  While this may seem easy and convenient, there are things that can go wrong. For example: 


There’s a chance your co-owner won’t use the funds for immediate expenses as you anticipated. Because the assets automatically transfer to the surviving owner(s), the survivors don’t have to abide by your wishes. In fact, these assets will pass to the co-owner(s) even if your will or trust says otherwise.  Moreover, regardless of your intent, the survivor(s) can refuse to use it how you intended or even take the money out and use it however they want. In any event, even if some of the funds are used as you intended, what’s left belongs to the co-owner(s). Sometimes, co-owners agree to follow the decedent’s wishes; other times, they do not. You will have no control over whether they do or don’t. 


During your lifetime, if a co-owner runs into trouble with creditors, your account could get caught in the middle. If it can be proved that the account assets belong to you, the creditors likely won’t be able to seize it. But it can take time, energy, lawyers, and money to sort out ownership. 

During your lifetime, a co-owner could find themselves in a tough spot and use the funds for their own benefit or even empty the entire account. Again, you can file a lawsuit and prove it’s all your money. But by that time, there may be little to recover. Plus, most people don’t like suing their own family members. 


Once you have added a joint owner, depending on how the account is set up, you may not be able to remove them whenever you want. They may have to agree to give up their interest. 


Of course, one way to minimize the risks mentioned above is to keep the balance in the joint account low. This way, you are limiting your risk of the assets not being used according to your wishes to that low amount. 

Instead of a joint account, many clients consider a transfer on death “TOD” or in trust for “ITF” account. This designates the person to receive the account at your death. They have no interest or control during your lifetime. At death, the account transfers upon presentation of a death certificate. While this may avoid many of the drawbacks of a joint account, the person receiving the funds can still do whatever they want with the money after your death, and not as you intended. 


An even better solution would be to create a living trust and name a co-trustee. The co-trustee’s access to accounts would continue if you became incapacitated and after your death. Plus, as remaining sole trustee, they will be legally required to follow the terms of the trust – your wishes. They would have to manage trust assets for your benefit during your lifetime and for the benefit of your beneficiaries after your death. 


If you still worry about access to funds for immediate expenses and want to “add” someone to your accounts, you might consider putting in writing what your intentions are with respect to the funds in this account.  Although such a document might not be legally binding, it may still carry some weight among family members since you have expressed your wishes in writing. 



Bernard A. Krooks, Esq., is a founding partner of Littman Krooks LLP. He was named 2021 “Lawyer of the Year” by Best Lawyers in America® for excellence in Elder Law and has been honored as one of the “Best Lawyers” in America since 2008. He was elected to the Estate Planning Hall of Fame by the National Association of Estate Planners & Councils (NAEPC). Krooks is past Chair of the Elder Law Committee of the American College of Trust and Estate Counsel (ACTEC). Mr. Krooks may be reached at (914-684-2100) or by visiting the firm’s website at www.elderlawnewyork.com.