People in New Jersey and all over the country have a lot of ideas on how to set up their estate plans to make things easier on their loved ones. Conflicting advise may be given from people in varying fields of expertise. There are several ways to set up an estate plan that can help loved ones avoid estate litigation. Utilizing a durable power of attorney is one option.
In another state, a man was told by his banker that adding his son as a co-owner on his bank accounts would be a great way to pass assets directly to his son when he dies or for his son to handle any financial affairs for him if he were to become incapacitated. It may sound like a good idea, but it has a lot of potential problems. This is certainly not a suggestion an estate planning attorney would make, and here is why.
First off, if this gentleman has more than one child but only lists one son as a co-owner, when he dies, his son will get everything in the account — which could lead to family drama. It does not matter what he has written in his estate plan at that point. Secondly, if the son were to get a divorce or fall on hard times financially, the money in the account may be considered marital property and be subject to division or opened up to creditor claims. Finally, this gentleman will not have the power to stop his son from just taking his money.
In New Jersey, a durable power of attorney grants a designated individual power to access a principal’s bank accounts when doing so is necessary. It will not give the agent unlimited power. It does not give the agent ownership of the bank account. By going this route, one’s assets and family members can be protected and estate litigation possibly avoided.