Joint Account Question

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winski58
Posts: 82
Joined: Mon Jan 28, 2013 2:59 pm

Joint Account Question

Post by winski58 » Mon Nov 13, 2017 2:36 pm

My credit union has a "Payable upon Death" option but not a "Beneficiary Option." In order to do the the POD will require that I open a new account and transfer my checking and money market accounts to the newly established account because I have a "line of credit" in my existing account.
Instead of doing this, I am thinking of adding my son as a joint owner.
Questions: Are the 1099's for interest for the money market accounts only sent to the IRS using the social number of the primary account holder? Any reason why this may not be a good alternative, other than trusting the integrity of my son.

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dm200
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Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Joint Account Question

Post by dm200 » Mon Nov 13, 2017 2:59 pm

winski58 wrote:
Mon Nov 13, 2017 2:36 pm
My credit union has a "Payable upon Death" option but not a "Beneficiary Option." In order to do the the POD will require that I open a new account and transfer my checking and money market accounts to the newly established account because I have a "line of credit" in my existing account.
Instead of doing this, I am thinking of adding my son as a joint owner.
Questions: Are the 1099's for interest for the money market accounts only sent to the IRS using the social number of the primary account holder? Any reason why this may not be a good alternative, other than trusting the integrity of my son.
1. "Beneficiary" designation ot titling usually is for retirement accounts or Life Insurance Policies. POD (Payable on Death) is the normal and usual designation for the types of credit union accounts you refer to

2. I am very surprised a new account would need to be set up. I do not see what the lne of credit has to do with it at all. I would, perhaps, "appeal" this and ask that the credit union's compliance specialist review any such requirement.

3. Remember that adding your son as joint owner fives him complete rights to any and all funds in the account, as well as the account balances being seized by creditors, judgments.

4. In a practical sense, it is almost always the case that the credit union reports to IRS using only your name and tax ID.

5. Remember that joint ownership of POD overrides your will and may have (depending on balances and details) "unintended consequences"

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Mlm
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Re: Joint Account Question

Post by Mlm » Mon Nov 13, 2017 8:59 pm

I was a joint account holder on my mothers checking account for several years. She wanted to add me in case any expenses needed to be paid in case she was unable. She gave me a blank check to hold on to so that I knew the account name and number.

When she passed I was grateful to have access to pay the funeral home before her estate was opened.

There was no interest paid on her checking account but I believe that any interest is credited to the primary account holder.
Reality has a way of catching up with you

Katietsu
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Joined: Sun Sep 22, 2013 1:48 am

Re: Joint Account Question

Post by Katietsu » Mon Nov 13, 2017 9:09 pm

If the amount is small then it might just be more convenient to have a joint account. If the amount is larger, then it is cleaner to go ahead and set up payable on death designations for all the reasons previously outlined. If making this adjustment is difficult, I would be concerned about using the credit union in general. I have added POD designations and it has taken about 30 seconds.

Alan S.
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Location: Prescott, AZ

Re: Joint Account Question

Post by Alan S. » Mon Nov 13, 2017 10:15 pm

Mlm wrote:
Mon Nov 13, 2017 8:59 pm
I was a joint account holder on my mothers checking account for several years. She wanted to add me in case any expenses needed to be paid in case she was unable. She gave me a blank check to hold on to so that I knew the account name and number.

When she passed I was grateful to have access to pay the funeral home before her estate was opened.

There was no interest paid on her checking account but I believe that any interest is credited to the primary account holder.
Perhaps equally important, you inherited the account directly and it did not have to go through probate.

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