Skip to Content

We are a Veteran Owned Business, providing 20% discounts for Veterans, First Responders, Elementary and High School teachers. Please contact us to set up a phone or Zoom meeting. Taking care of you and your family, It's What We Do!

Joint Ownership vs. POD Bank Accounts in Pennsylvania

Posted on Sun Nov 16, 2014, on Estate Planning

From our “Ask a Question” Mailbag: Joint Ownership vs. POD Bank Accounts in Pennsylvania

Most Recently Updated July 8, 2018.

“What is the difference between having my bank account owned by my daughter and I Jointly or Payable-on-Death? Will they both allow me to avoid probate in Montgomery County, Pennsylvania?”

Joint Ownership vs. POD Bank Accounts in Pennsylvania

Joint Ownership vs. POD Bank Accounts in Pennsylvania

Changing your bank account into a Joint-Ownership account with your daughter or making her the account’s Payable-On-Death beneficiary avoids probate, but these are different tools addressing different situations and goals.

What is Best for You?

First, think through whether avoiding probate is a wise decision for you. Pennsylvania law makes forming protective trusts for your children in your will rather easy and inexpensive. After your death, these trusts protect the money from your children’s spouses, creditors, and future taxes. By using a Joint Account or Payable-On-Death Designation to give the account directly to your daughter, these funds will now be unprotected from her spouse and creditors. If you think protecting your daughter’s inheritance from her creditors and spouse is a good idea, then contact me and we can talk about the value of a protective Pennsylvania dynasty trust.

If protecting the funds from your daughter’s spouse and creditors is not important, then a Joint Account or Payable-On-Death Designation might be a great idea, but they are certainly different tools.

Jointly Owned Accounts:

By making your account “Joint”, you are giving your daughter a current ownership interest in the account. Your daughter has the right to take all the funds from the account whenever she wishes and, at your death, she has the legal right to claim the entire account by “right of survivorship”. She does not need to file your will with the Montgomery County Register of Wills, but instead, she can simply empty the account because at your death she is seen to take the whole account by contractual agreement with you.

Joint ownership is simple, but it can cause problems. If during your lifetime your daughter has creditor problems or get divorced, the account is seen as partially owned by her. Your account is now dragged into your daughter’s legal problems. Further, if you want your account divided equally between your children, your daughter has no legal obligation to share this account. Often parents will make accounts “joint” for “convenience”. The parent only wants the child to help manage the money and pay bills. Unfortunately, the parent is not told that what they have really done is given the one child the right to take the entire account and not share with siblings. This can end up in the Montgomery County Orphans’ Court where you children dispute whether the account was for convenience or not.

Payable-on-Death Designations:

Unlike a Joint Ownership, by making your account “Payable-on-Death” to your daughter, you keep the ownership of your account in your name during your lifetime. Your daughter will only get the account at your death, hence the name “payable-on-death”.

If your goal is to give this account only to your daughter, then a POD Account is a more definitive tool. Your other children will find it more difficult to argue that wasn’t your goal.

To claim the account, your daughter need only bring you death certificate to the bank. The bank will then turn the account over to her without the need of involving the Montgomery County Register of Wills.

The Power of Attorney

If your goal is to allow your daughter to help you with paying bills and managing the account, a Payable-On-Death Designation will not help you. You can, though, give her check writing powers or give her a power of attorney over the account. Either technique will allow her to help you manage the account, but not expose your account to your daughter’s legal and marital problems.

More Planning Questions?

Financial Planning is only a piece of the Estate Planning process. By all means, if you want to learn more, please read my more detailed article, Estate Planning Everything You Need to Know.

In Conclusion: Joint Ownership vs. POD Bank Accounts in Pennsylvania

I hope that this article was helpful in explaining financial planning. Further, I included links to even more detailed information on my website so you can learn more. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!

Let our Estate Planning lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced estate planning lawyers.  By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!

Wills, Trusts, Probate, and Estate Litigation, It’s All We Do!

 

Tags:

Estate Planning, Estate Planning Attorney, Estate Planning Lawyer, Montgomery County, Pennsylvania, Power of Attorney

Peter KlenkPeter Klenk

What Our clients are saying

Klenk Law Logo
Stars

hinda schuman

very happy to deal with Peter Klenk law firm over many decades

Klenk Law Logo
Stars

Chris Nezu

Klenk Law is a professional and class act from start to finish. Peter, and all of his staff members are patient, clear, and trustworthy, all within the context of a user friendly, kind, and comfortable ambience.

Klenk Law Logo
Stars

Tina Krovetz

Fantastically easy and efficient team to work with getting our wills done. We will use Klenk again in the years to come. I highly recommend Peter Klenk.

Klenk Law Logo
Stars

Richard Test

Very knowledgeable and easy to work with. Also very competitive pricing. Recommended to me by another attorney. First class service from start to finish.

Klenk Law Logo
Stars

CEGM

Peters' firm has prepared and updated our Wills and Trusts for the last 15 to 20 years. They know the law and help with your decision making to use the law to your best advantage. Response time to your requests is very reasonable, and final reviews and signing is executed in a timely manor with a thorough coverage of the documents. Our most recent updates to our Wills & Trusts were somewhat complicated, in our opinion, but Peter and his staff handled them effortlessly. As you can tell from this review Peter Klenk's firm is top notch.

Let us put our expertise to work for you.

Free consultation within 24 hours.