Adding your kid’s names to bank accounts is a pet peeve of mine. A lot of times I get asked – why? My answer is always that it makes a mess of something that doesn’t need to be a mess. A financial power of attorney does everything that putting your child’s name on your account does, except transfer ownership (which, is not what people are trying to do anyways.)
Now I would like to illustrate with a recent decision from the Michigan Court of Appeals. The Case started in 2014, and the Court of Appeals reached a decision it in July 2017, so that means the case has been going on for three years to three and a half years.
The facts of the case are pretty simple. Mr. Edward Sadorski had five children that all survived him. His estate plan called for his estate to divided equally except his business that would go to one son who had spent thirty years working with him in the business. Two months before he died, he put one of his children’s name on an account he had at First State Bank. He selected the account with the right of survivorship, despite having other options on the form. His other children would testify that he did this for convenience and not to vest ownership in the one child. The lower court decided that the account should be shared by all the siblings despite questioning the suspicious nature of the testimony. The Court of Appeals affirmed and said the account belonged equally to all the children.
So, did the courts get it right? Ultimately, we don’t know. The paper evidence would suggest that given the option, Edward chose joint with rights of survivorship. We don’t know because Edward did not leave us anything to know why he had done it. The only person who can tell us if it right is no longer available. Whether or not the court got it right is really not the issue. The problem is all the time, money, and energy in court trying to resolve this issue.
Unfortunately, his happens all the time with bank accounts and other accounts. Instead, you can avoid this simply by not putting your kids’ names on your accounts. Alternatively, make a change to your estate planning documents – otherwise, you’re just leaving litigation behind. It is not just me check out another Attorney’s opinion and Forbes take
Dafoe Law, PLLC can help you with your estate plan. We work with our clients to check all their accounts, including bank accounts, to make sure they will work the way the clients intends.
Dafoe Law, PLLC is a Life Care Planning law firm serving the Estate Planning, long-term care, estate, and trust administration needs of clients in Saginaw, Bay, Genesee, Huron and Tuscola Counties. Dafoe Law serves Frankenmuth, Bridgeport, Birch Run, Reese, Millington, Clio, Vassar, Saginaw, Saginaw Township, Freeland, Thomas Township, Spaulding Township, Burt, Bay City, Essexville, Munger, Kochville Township, Caro, Cass City, Sebewaing, Unionville, Pigeon, Bad Axe. Travis I. Dafoe is a member of the National Academy of Elder Law Attorney and WealthCounsel. Dafoe Law, PLLC is also a member of the Life Care Planning Law Firm Association. Start estate plan