Adding name to bank account rather than mentioning in a will

Oakshade

Oakshade

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A parent in their wisdom is making individual adult children co signatories on bank accounts (basically making them joint accounts) so their children have access to the funds after they have passed. The accounts are not mentioned in the will. Is this a sensible approach? There is no question or trust issue of the children accessing the funds 'early'
 
I stand to be corrected, but I don't think this works from a CAT point of view. The Revenue aren't stupid and will look at the source of the money. If they see that the child has not contributed to the money in the account, it will form part of the estate for CAT purposes. If this was allowed, every parent would have joint accounts with their children for everything; property, investments, bank accounts. Only the stupid would pay CAT in this scenario.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Anecdotally have heard of people doing this as the account doesn’t go through probate.
 
Oakshade said:
A parent in their wisdom is making individual adult children co signatories on bank accounts (basically making them joint accounts)...
Click to expand...

This isn't the case - there is a difference between being a signatory on the account and being the owner of the account. If the name on the account is a joint name, then it isn't a joint account.
 
All very cloak and dagger................

I deal with elderly people regularly and I'd very often suggest that, especially if cognitive difficulties may arise, that it would be helpful if family members had access to bank accounts. When my own mother was getting on, it was an easy way to manage her finances.

Of course, there is always the possibility that a family member would clear out the account(s) but that is very rare in my experience.

Every will will set out what is to happen to the Testator's estate on their death- if the bank accounts are not mentioned, and if they are expressly joint accounts , then technically, yes, they pass outside the estate BUT Revenue expressly ask in the Inland Revenue Affidavit if there are any joint property/ accounts and why they are joint, who provided the funds etc.,etc.

So, back to the OP's post - is this a sensible approach? Doesn't it all depend on why?

It may be for the reasons set out above- it might even be to defraud Revenue but, without knowing the specifics, it is impossible to say if it is a sensible approach.

And Revenue are smart cookies. If they think there is something fishy about an estate , they can audit the file.

I've only ever had a Probate file audited once but it is not a pleasant experience even when everything is above board.

mf
 
As EmmDee says, there's a big difference between a co-signatory and a joint account holder.
 
It's prudent for an elderly person to put a POA in place, especially if there is any question of dementia etc. However, if they are simply doing a tax dodge here, when they die, the other account holder could have a tax liability if the funds in the account were not earned by the remaining account holder.
 
Nobody puts bank accounts down on a will though surely ? They just say divvy out the dosh accordingly. They would let family know about accounts in general. This sounds like the guys I know in the 80s who would be hatching all sorts of plans (No offense to the OP) when information was not so public. Think Bertie with no known bank account for example. I think it's a good idea if they want family to be able to access funds immediately after death for funeral and sundries but they would be foolish not to declare the accounts.
 
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