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The Hidden Danger in Joint Bank Accounts

A woman in New Jersey had her bank account frozen because her daughter filed for bankruptcy.  How can this happen? The woman had a joint account with her husband and when he died, she put her daughter’s name on the account to take over management of the account in case she became incapacitated or too ill to manage it herself. The daughter did not list the account on her bankruptcy forms but Wells Fargo discovered her name as co-owner of her mother’s account and froze the assets claiming they were available to pay the daughter’s debts because they belonged to the daughter.

Mother Did Not Give up Ownership or Control

The mother never intended to transfer the account while she was alive to her daughter. She only wanted to provide a mechanism for her daughter to pay her bills in case she was ill. The mother’s pension and social security benefits were directly deposited into the account so the mother had no way to access her only income once the account was frozen.

The mother is now suing Wells Fargo for their actions. The case is a good illustration of what sometimes seems like a simple, inexpensive solution to estate and disability planning can be an expensive legal nightmare.

Getting Legal Help

Experienced Estate Planning Attorney Elga Goodman has helped many families protect their assets while also protecting their loved ones. Before you establish any joint accounts or turn control of assets over to another, contact us to talk about your options. Call us today at 973-841-5111.

Posted in: Estate Planning, New York Estate Planning