Pros:
-A joint checking/savings account with right of survivorship allows the parent and adult child to share the ownership and responsibility of the account, and allows for efficient asset transfer to the surviving owner upon death.
-The surviving owner is also generally allowed access to the account in cases of incapacity or extended absence of the other owner.
-The adult child in the account will maintain full ownership of any assets in the account after the death of their parent, without the need for probate.
Cons:
-Ownership rights with the joint account belong to the two parties equally and could make it difficult to manage the account with the two parties in disagreement.
-Upon the death of one of the parties, the remaining party will take sole ownership of the account and have authority over withdrawing or using the funds, presenting potential ethical issues, especially if the parent’s intention was to have the child split the funds with other family members.
If you have questions about joint accounts and how they fit into your overall estate planning, give us a call at (940) 692-7800.