What seniors should know about joint accounts

Q. Since I am elderly and handicapped, I added my daughter’s name to sign my checks so she can pay bills if I was hospitalized. Does this mean she owns half my accounts now? I wanted them to be payable on death to three family members. Also my daughter has bad credit. What will this do to my credit? And, I have one disfavored child and I don’t want her name on the accounts.
— Need help

A. These are great questions.

If your daughter was added to your checking account as a joint owner with rights of survivorship, then your daughter will inherit all of the money in the checking account when you die, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

Plus, your daughter can also remove all of the assets in the checking account and the entire checking account may be subject to the claims by your daughter’s creditors, Whitenack said.

“If the daughter was added to the checking account as an attorney-in-fact under the bank’s power of attorney form or by way of a general durable power of attorney, then the assetsbelong only to you and can be used only for your benefit,” she said. “Under these circumstances the daughter’s creditors cannot make claims against the money in the checking account and the assets in the account will go to those who were designated by you to inherit the assets in that account.”

Joint ownership of the bank account should not affect your credit score, Whitenack said.

She said adding POD to bank accounts means that the money in the accounts are payable on death to those named. The named individuals have no rights to the accounts so long as the account holder is living.

“A disfavored child might file a challenge with the court after your death arguing that he or she was omitted by reason of undue influence exercised upon you by the individuals who would otherwise inherit the money,” Whitnack said. “Therefore, you should see an attorney to have a will prepared and to discuss options for insuring that your money goes to the people you want them to go to upon your death.”

Email your questions to ask@njmoneyhelp.com.

Karin Price Mueller writes the Bamboozled column for The Star-Ledger and she’s the founder of NJMoneyHelp.com. Click here to sign up for the NJMoneyHelp.com weekly e-newsletter. Like NJMoneyHelp.com on Facebook and follow it on Twitter.