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Joint tenancy:Parent’s accts were set up joint with sibling/POA for convenience of POA paying bills

Assuming POA wants to honor parent’s original intentions (in will) to split estate per stirpes? I know legally POA does not have to share whatever is in joint accounts.

And if there can be proof that the accounts were ONLY set up 'FOR CONVENIENCE', does court/probate hold that in account as well?

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In my experience and understanding with joint bank accounts, the "joint ownership" is the key. Once the account is set up as joint the two individuals (or more) are equal owners. So upon death of the original account holder, the account is owned by the surviving holder. This is not part of the estate, it overrides the will. Unless the account is set up so that it reverts back to the estate, it belongs to the joint account holder. It is not looked at as inheritance. This is why parents are warned against putting a child on an account without fully understanding what they are doing. And as Soverytired said, unless you have a 5 million dollars estate, there are no inheritance taxes. I could be wrong but this is my understanding.
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If it is truly a joint account, was the account set up while your mom was still legally competent? Or actually, maybe I should take a step back and ask has your mother become legally incompetent? Your profile says she is forgetful but the dementia is mild. Is she incapable of making her own decisions? Or, is it possible that your mom named your sibling some years ago and put the sibling on the account at that time? If the account was preexisting, it probably is joint and any balance at time of death would go to your sibling because your sibling is a joint owner. However, the value of the account would be included in the estate and the will should indicate whether the estate would pay taxes or the individual or some combination. If the will does not state, then it could be the individual is responsible but you should check individual state laws. (see an attorney) In any event, until the end of 2012, there is a $5 million exemption (which considers the entire estate including any real estate) and amounts over that can be taxed up to 35%. (This is the extension of the Bush era tax cuts which may or may not last past 2012.) So, in the overall perspective, a convenience checking account is likely not going to make a huge difference in whether there are excess assets over the exemption amount. The point is, I think, that if you are uncomfortable with your sibling's handling of the account, then you need to see an attorney to challenge the POA. If you are just feeling left out, I understand completely, my mother has named my sister as POA...but those were/are her wishes and sometimes we just have to accept these things even if they seem inequitable. If you think there is something bad going on, though, challenge it. Hugs to you, I am sorry. My sibling relationships have been devastated by this aging thing, too.
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From what I understand the accounts are joint with right of survivorship, not sure because sibling/POA won't tell us, and mother doesn't have a clue (nada, zip).
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Maybe I should have specified inheritance taxes (it would be after death), after accounts roll to 'surviving' joint owner? Thanks everyone!
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Soverytired - Fabulous spot-on answer!

NoVoice - as Carol said, POA is good only when they are alive. Upon death POA ceases and everything switches to whomever is named executor of the estate as per their will and goes to probate. If they had a true living trust, there is no probate.

HOWEVER, most people will have an account or a couple of accounts (if there is real $$) that are POD accounts. Pay on Death accounts transfer ownership to whomever is named POD so the accounts & the $ within can be used for final expenses or for management of the estate before executor is named in probate.

Probate can take a while as executor can take time to get paperwork needed, (like inventory, etc) for filing. How it needs to be done, whether the executor needs to post a bond and what the time-frame for completion...etc, is determined by the state in which the deceased was resident of. Probate are open-courts with everything public record, so if you are concerned about your share or how assets are being distributed then you go to court for the hearing(s). There will be a required legal posting that the estate is being done and anyone with an interest needs to submit their interest within a period of time - this is posted in the local newspaper and more than one time. Again all this is state specific.
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I believe if the accounts were set up for convenience, it would indicate that on the account. Then the amount in the account would go back to the estate. You would have to ask the bank about how these accounts are set up. My brother is on Mom's as joint owner, so it is his money when she dies and up to him to share with me. So I hope he is honest..........
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If the POA set up the account correctly, it should be a trusted account that can only be used for the benefit of the parent - to pay the parent's bills and health care. From that standpoint, the POA would have signature authority on the account but would not have joint ownership of the account and any balance in the account would become part of the estate and be distributed in accordance with the will. Think of it as a corporation's checking account - a corporation may have several check signers in its accounting dept, but those people have no ownership of the corporation's assets. If the POA did not set up the account correctly, you could legally challenge that now because that's an abuse of a POA's discretion. If by "gift taxes" you mean estate tax, whoever inherits (in accordance with the will) would pay the tax, however, there is a credit provision that would operate to allow a fairly generous exemption of assets. If by gift taxes, you mean gifts made while the parent is still living, if the gifts made exceed $12,500 per year, the parent is responsible for the tax on the amount over the exemption. There is a relationship between gift taxes and estate taxes because the gift tax is to prevent people from giving away their estate during their lifetime to avoid estate taxes. That's why the tax liability for the gift (that exceeds the exemption) goes to the giftor, not the giftee, thus reducing the giftor's assets.
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The Power Of Attorney is no longer a legal document once the person who assigned it dies. It's only for use while that person is alive. The will would then take over. If you are talking about gift taxes while the elder is alive, these must be substantial gifts and you may want to talk with an attorney in your state. State laws vary, so it's always good to get a legal opinion if there is a lot of money involved.
Take care,
Carol
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