Joint bank account with mum?

della11

My mum has asked me if she can add me to her current account to make it a joint one. The reason being that she has a terminal illness and obviously this would enable me to do her banking for her without having to go to the trouble of lasting power of attorney.
She also says that when she is 'gone' this would mean that these funds would not be tied up in probate. Have got the necessary forms from the bank. Her Will is straight forward, an equal split between myself and my sister. Inheritance tax is not an issue as estate well under the threshold.
Are there pitfulls to this plan?

fluffnutter

What's the objection with getting lasting power of attorney? It allows you far more control and support than simply having a joint account. E.g. does she own a house? What are her desires regarding her welfare should she be unable to look after herself? What about her bills? Savings account? Investments? Pension? You won't be able to help with any of these merely by holding a current account together. But you would if you were her attorney. It's really straightforward and costs nothing.

mintymoneysaver

I've got power of attorney for my mum, who's very much alive and well currently. but I'm still thinking of suggesting we get a joint bank account, with her having sole use of the card in case she ever has flu or something and needs a bill paying. She did it with my great grandad and it also meant that when he died not all of the money was tied up until probate had been sorted out, she could just use the joint bank account.

Icey77

My Mum set up an account after my Dad died to ensure that her funeral costs could be covered without difficulty to my sister and I.

It's a savings account with Nationwide and all 3 of us are signatories but any withdrawals require 2 signatures.

This has reminded me that I need to remind her to set up a lasting power of attorney too, my grandmother set one up a few years ago with my Mum and I as the named persons.

I think the PoA are relatively inexpensive for the heartache and chaos they avoid later on if they are needed to be used. I would definitely agree with others that have suggested them.

Hope all goes well and you never have cause to use it!

fluffnutter

There's nothing wrong with a joint account; it's probably an easy way to have input on a day to day basis. There are pitfalls of course, but these relate primarily to relationships breaking down and one person stitching the other up. Plus you might run into tax implications if the sums in the current account are very large. I doubt these potential hazards will be relevant to you and your mum, della, so you could probably go ahead with confidence.

I still think you should get lasting power of attorney though. My MIL asked my OH and me to look into this the other day, so I've been reading up on it. It's so straightforward.

dandy-candy

First off I'm really sorry about your mum - mine died last April of cancer.
If you open a joint account make sure your sister knows about it. We didn't find out that mum had a joint account with our sister until mum was very ill in a hospice and it caused a lot of distrust. It is useful however as you will have access to the money for any expenses and funeral costs which you normally can't access until probate is granted. You of course will still have to declare it on the IHT forms.

suki1001

When someone dies, if you are lasting power of attourney, you can't use the bank account and it goes to the control of the solicitor, so they can deal with the estate. They pay the funeral fees and any outstanding expenses.

So, I'm not sure how this would work with a joint account. Does she just want you to keep the money after she dies, or will there be other beneficiaries of your mother's estate?

fluffnutter

suki1001 wrote: »

When someone dies, if you are lasting power of attourney, you can't use the bank account and it goes to the control of the solicitor, so they can deal with the estate. They pay the funeral fees and any outstanding expenses.

So, I'm not sure how this would work with a joint account. Does she just want you to keep the money after she dies, or will there be other beneficiaries of your mother's estate?

I'm pretty sure the money is equally owned by each signatory. So, in the case of a joint account, the money would automatically become the OP's and wouldn't form part of the estate. This, of course, would be a huge benefit.

dandy-candy

fluffnutter wrote: »

I'm pretty sure the money is equally owned by each signatory. So, in the case of a joint account, the money would automatically become the OP's and wouldn't form part of the estate. This, of course, would be a huge benefit.

Actually you have to declare how much of the money belonged to the other half and that does form part of the estate, but you just written in the paperwork. You still have access to it and spend it if need be, they just expect you to pay any IHT due on it (if it's over the threshold)

McKneff

dandy-candy wrote: »

Actually you have to declare how much of the money belonged to the other half and that does form part of the estate, but you just written in the paperwork. You still have access to it and spend it if need be, they just expect you to pay any IHT due on it (if it's over the threshold)

No you dont, fluffnutter is correct.

On a joint account, if one of the joint holders dies the money automatically becomes the other holder(s)

No question.

fluffnutter

dandy-candy wrote: »

Actually you have to declare how much of the money belonged to the other half and that does form part of the estate, but you just written in the paperwork. You still have access to it and spend it if need be, they just expect you to pay any IHT due on it (if it's over the threshold)

Are you sure? The money is jointly owned so how can you determine how much belonged to whom.

This is from the government's website:

Money in joint accounts
The deceased person may have held money with another person in a joint bank or building society account. Normally this means that the surviving joint owner automatically owns the money. The money does not form part of the deceased person's estate for the purpose of administration and therefore does not need to be dealt with by the executor or administrator. However, a deceased's person's share in joint property is treated as part of their estate for inheritance tax purposes, both on death and on gifts made during their lifetime.