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My parents let my sister be the heir to their 4 million dollar fortune, and be the joint owner of their bank accounts. Should I be worried?

Dear Quentin,

I just learned that my parents (over 80 years old) designated my sister as the trustee of inheritance, and as the heir to their estate and will. They also put her name on all of their financial accounts “in case something happens to us.”

I have no reason to suspect my sister of any nefarious motive, but listing her as a joint owner on their account could seem to be a problem for me in case they died. What are the pros and cons of this arrangement?

Their real estate is probably worth about $ 4 million. We have five other brothers and sisters who are not currently aware of this arrangement. Can you provide any resources or articles that I can show my parents about better ways to accomplish their financial curator goals?

Son cares

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Dear child,

People usually don’t do anything nefarious, until they get the chance to do it and / or have their own financial trouble. Of course, that may not be the case with your sister, but your parents should be fully aware of what it means for one of their children to be co-owners of their bank accounts, If their only intention is to ask your sister for help with the bills.

Is she a co-owner of this account or a co-signer? If it’s old property, your sister is a joint owner and can spend the money she wants. She will likely be held responsible for debts on that account after your parents die. If it’s the second person, your sister has the right to sign the check on behalf of your parents. To complicate matters, not all banks have the same definition for “co-owner” and “co-signer”.

Many people do not understand the difference between co-signature and co-owner. There are many instances where children are listed as co-owners (rather than as authorized signers) on accounts that emptied parents’ bank accounts before and after their death. Sometimes, they fail to keep enough (or any) of the receipts, and have been falsely accused of emptying a parent’s account.

Many people do not understand the difference between co-signature and co-owner.

In the letters I have received regarding this matter,Damage is often done, often caused by a combination of the three “Gs” – grief, hatred and greed – when long-smold sibling rivalries flared. People do things they might not do if their parents are there to see it. You were right to make sure your parents’ actions matched their wishes.

There are also “what if”: What if your sister died first? The account would also become part of her estate, with a share divided among her children, possibly related to the payment of state inheritance taxes. Your parents’ accounts can also be “paid for death” or “transferred at death”, avoiding publicity and often wasting time the authentication process. Read more here.

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