Joint account

Bagsof

I want my son to open a savings account (not ISA) so that I am able to transfer funds into so that he has access in the event of something happening to me. He doesn't want the funds to go into his account because he doesn't see this as his money and I may need it back. Is this the best idea or should we have a joint account?

NottinghamKnight

A joint account would make you financially associated so if one of you had issues with finances and credit it would reflect on the other. What are you hoping to achieve with this, is there a specific set of circumstances that you know or foresee or is this just some random thoughts? If you are older and foresee a capacity issue then you could look at power of attorney for example.

colsten

A savings account does not create a financial association as far as credit files are concerned - -  for the simple reason that savings accounts will not be recorded by the credit reference agencies. You may, however, need a joint current account into which to make withdrawals, and from which to make deposits. This current account would need to be a joint account, in the smae names as the joint savings account, and therefore you would create a financial association

If you hold a joint savings account with your son, the money in it is his, just as it is yours. Either of you can withdraw  some or all of the money. You will need to read the T&Cs of the relevant account(s) to establish how the bank / building society will handle the passing of one of the account holders. Some close the account, pending the handling of the estate. In others, the account becomes a sole account upon presentation of a death certificate.

Bagsof

Thank you for your response. Now that it has been explained to me perhaps a joint account is not the best option.  I am still working and in good health. I did suggest monthly deposits into his ISA account but he would like  to keep track  of funds I have transferred. Not sure if I can set up power of attorney if I have no health problems?

jonesMUFCforever

1. Make sure you have made a will
2. Yes give Power of Attorney to him.
3. Get him to open a new account (anywhere) then when he has given you the sort code and account number you can arrange transfers to him at will.
4. Just one caveat - what if you fall out?

colsten

You cannot pay directly into another person's ISA as the funds have to come from accounts in their name. Not that cash ISAs are a good idea these days, as people have £1,000 tax-free interest allowance, and ISA interest rates are even more abysmal than interest rates for normal savings accounts.

You can set up a PoA any time you like. In fact, it's best if you do it sooner rather than later. A PoA won't be able to be used until you lose mental capacity - which might be never, hopefully. Also, a PoA dies with the person who has granted it.

If you want to give your son some money, do it sooner rather than later. If you die within 7 years of handing over the money, it will form part of your estate and it might be subject to inheritance tax, depending on the size of your estate.

On the opposite end of the spectrum, if you give money away and then need to claim benefits, or require care, you could be subject to deprivation of assets (google it).