Who will inherit your joint bank accounts

Older people who think they may need assistance in managing their day-to-day finances often keep money in joint bank and investment accounts with an adult child. That makes it easier for the child to step in and help when needed.

Problems can arise, however, when the parent dies. Does the money in the account then belong to the senior’s estate or to the child who acted as joint owner? Lawyers say many families fight over the parent’s intention. One dispute went all the way to the British Columbia Supreme Court in the summer of 2002.

Avoiding such disputes is not difficult. The senior should attach a memo to his or her will stating how each joint account should be dealt with. The memo should also be updated as accounts are opened and closed.

Here are some other tips to simplify everyday cash management:

Consolidate accounts to eliminate duplication. It’s easier to monitor one or two accounts than eight or nine.
Use chequebooks that automatically make a copy of each cheque written. For joint accounts, consider whether a cheque should require the signature of both individuals. Otherwise, see if the financial institution can alert the second joint owner before processing any unusually large withdrawals on the part of the other joint owner.
If possible, automate cash management by signing up for direct deposits and by paying bills electronically.