Case Study 6 - The dangers of making someone a co-owner of a bank account as joint tenants with right of survivorship.

Answers for Kentucky Residents

The following answers are based upon Kentucky law as of April, 2006. Laws are subject to change, so please ask an attorney for answers to specific questions.

1. The bank account may be subject to Jane's (her youngest child’s) creditors.

Kentucky Answer: True.

Two persons owning a joint account with right of survivorship each have access to funds in the account, which funds may be available to their creditors. The original purpose of the account does not protect Mary from Jane’s creditors.

2. Jane could withdraw the entire amount in the bank account and deposit it in another account in her name only.

Kentucky Answer: True.

Jane has full authority to withdraw and dispose of the funds however she wishes.

3. Mary has made a gift of one half of the account to Jane.

Kentucky Answer: It depends.

Although she has made no intentional gift, Mary has legally made all funds available to Jane for whatever purposes.

4. At Mary's death, what will happen to the bank account she co-owns with Jane?

Kentucky Answer: B.

Jane will get all of it.

Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties to the account as against the state of the decedent unless there is clear and convincing written evidence of a different intention at the time the account was created.

5. Instead of opening a joint account with right of survivorship with Jane, Mary had the following options:

Kentucky Answer: D. All of the above (A, B, and C).

A. She could have opened a personal agency account naming Jane as her agent.

B. She could have executed a durable power of attorney naming Jane as her agent.

C. She could have signed a card at the bank giving Jane authority to make deposits and withdrawals from her account.

Return to Advance Directives Case Study 6.

View the Communicate Your Advance Directives for Health Care learning lesson.

Credits

Adapted for use in the Legally Secure Your Financial Future: Organize, Communicate, Prepare program.

Content Development
Reviewed for use in Kentucky by:
Matthew Holland, law student,
Louis D. Brandeis School of Law, Samuel L. Greenbaum Public Service Program
University of Louisville, Kentucky.

Supervised by:
Ron Marstin, Urban Managing Attorney,
Legal Aid Society, Louisville, Kentucky.

This information is provided as a public service and is designed to acquaint you with certain legal issues and concerns. It is not intended to be a substitute for legal advice, nor does it tell you everything you may need to know about this subject. Future changes in the law cannot be predicted, and statements in these materials are based solely on the laws in force on the date of release noted on this page.

This document is for non-profit educational purposes only. This document may not be used by a profit-making company or organization. When used by a non-profit organization, appropriate credit must be given to the Cooperative Extension Legally Secure Your Financial Future: Organize, Communicate, Prepare education program. Materials for this program were developed by a team from six land-grant universities. The program is included in the program toolkit of the Cooperative Extension Financial Security in Later Life national initiative. For more information go to: http://www.csrees.usda.gov/fsll.