Will there be any difficulty withdrawing funds from joint accounts that my mother and I share?
I take care of my 86-year-old mother's financial needs and investments. She's a widow who lives alone and values her independence. She has checking, savings, and CD accounts for a total value of approximately 450K. All of the accounts are set up as joint accounts in her name and mine. My stepbrother and I would be her only survivors. Unfortunately, my stepbrother lives across the country with his family and has no involvement in her care or life. My question is that since the bank accounts are in both of our names would I have difficulty withdrawing any amount necessary should her health care needs increase or change? The second question is, would my stepbrother have any right to any remaining bank funds after my mother leaves us? (He does not believe mom has any money and she does not want me to tell him). I realize that a will would help solve these questions but mom just does not believe in them. She is a stubborn person and I can't even persuade her to move in a senior center for companionship and to be properly looked after. Luckily, she does not required any special care at this time but in time I would expect that she may. I appreciate getting your feedback.
Assets that are held in joint names generally pass to the surviving joint owner upon the death of the other joint owner. This means that when your mother passes away, whatever assets remain in the various joint accounts would become payable to you alone -- you would have no difficulty getting access to the funds.
Joint property isn't generally subject to the jurisdiction of the Probate Court. All you would have to do is just withdraw the funds from the various accounts. However, there is one exception to this rule. If your mother designated you as a joint owner merely for convenience purposes and did not intend to have the assets pass to you upon her death, the joint accounts would be part of her estate and your stepbrother would have a claim for half of his mother's joint accounts.
It would be helpful for her to write a document that indicates what her intention is as to the joint accounts. Another point to keep in mind: if she requires long-term care in a nursing home in the future, the joint checking, savings and CD accounts would all be considered her assets if she were to apply for Medicaid.
In addition to Attorney Weismans comments, many nursing homes expect and outright require you to apply for medicaid. It's one of the ways they can find out your asset position. The full cost of nursing facility care is insane and essentially out of reach for nearly everyone. Assuming a long term facility is needed,it is essential to look carefully at medicaid forms and to read them very carefully.ANY time you apply for government help you are essentially telling the government especially medicaid that not only can they account for and review all her assets, but that they can periodically review her asset accounts to determine continued elegibility. They are semi famous for this. My parents paid $1000 per month for my fathers nursing home care because they were deemed "wealthy" Because on the day medcaid "checked" thier account they had a lot of money in it. It was 2 days after thier regular retirement payments arrived by direct deposit. Because my mother hadn't removed all their money, medicaid labeled them wealthy by thier standards. Well who bothers to withdraw all their money the day it arrives? No one except people on assistance. My mother managd the family finances for over 50 years and had an exemplary credit rating (over750) until the aplication for medicaid. Should the day for medicaid be looming large for anyone, I recomend a consultation with an attorney well versed in government assistance programs.
You should also be aware that if for some reason you passed away before your mother, the amount in the checking account would be considered part of your estate for tax purposes.
Recently dealing with the same situation with a client of mine who was investigated by the Area of the Ageing, I agree with Steve Weisman. I, however, suggest that you keep all receipts on the activity of this account so that if you are ever audited you have the proof as to where the money went. Since you are the care giver of your mother you may also receive payment as a caregiver through a Personal Service contract between you and your mother. This agreement states you get paid a certain amount, that is agreed upon by your mother and yourself, daily to do what you already do for her. I suggest that the money you receive for such payment be put into another account with your name on it for her future needs. Now not only have you covered yourself by having receipts for the account, you have safely and legally moved money from the joint account into a seperate account with just your name thus reducing probate on some of that money and lessening the amount in her Estate.