Bank account in joint names

[Sammie1900]

I’ve been on these boards for a few years as my mum has had Alzheimer’s since 2012 and have always had helpful advice. My dad (no longer married to my mum), although not too bad in terms of mental capacity, is worried that this is declining and therefore set up LPA, myself and my sister being attorneys. As he is losing a grasp on his (rather complicated) financial affairs, it was suggested that my sister put her name on his bank account in case of later problems. They went off to the bank with the LPA and did this.
My question is: my sister seems to think that because her name is on the account, she will still have access to the money when my dad dies. Obviously she has not contributed to the account at all, the money which goes into the account is purely my dad’s from pensions/investments.
I have LPA and deal with my mum’s bank account, I have always assumed that I am merely administering it and if she were to die the money would be part of her assets and therefore frozen until the will was sorted out.
Please note that I am in no way suggesting anything malicious is afoot here, there are a number of siblings and we are all working together to help my dad (my stepmother has Alzheimer’s and is out of the picture as far as money management is concerned). Obviously if my dad died and my sister needed money from the account this would be used on behalf of my stepmother (and eventually, the whole family via the wills).
Does anyone have any legal knowledge or experience of this situation?

 

[lemonjuice]

My question is: my sister seems to think that because her name is on the account, she will still have access to the money when my dad dies. Obviously she has not contributed to the account at all, the money which goes into the account is purely my dad’s from pensions/investments.

She is quite correct, in that on the death of a joint account holder all monies automatically go to the other person.

This happened to me, because my mother set up a joint bank account after the death of my father over 20 years ago and when she died everything automatically came to me. There were no queries by the bank as I was the other 'named account holder. I just went in showed them the death certificate and within a week or so everything was in my name only. I had checked online that this was likely to be the case beforehand. I also never contributed to that account at all either, just administered it to pay for Mum's needs and therefore have as yet done nothing with that account other than use it as her 'in administration' account to pay out any expenses incurred post death.


So yes she would have access before anyone else.

 

[Jessbow]

Inn my experience, the POA should go on the account as just that ( and not as a joint account holder) which is a subtle difference.

In the eventuality that the PWD passed away its quite clear that the money forms part of the estate of the PWD, not the attorney.

 

[lemonjuice]

have LPA and deal with my mum’s bank account, I have always assumed that I am merely administering it and if she were to die the money would be part of her assets and therefore frozen until the will was sorted out.

This is different because you are not named on the account, but acting as PoA for your mother.

 

[lemonjuice]

Inn my experience, the POA should go on the account as just that ( and not as a joint account holder) which is a subtle difference.

In the eventuality that the PWD passed away its quite clear that the money forms part of the estate of the PWD, not the attorney.

Quite correct but in our case the account became a joint account years before my mother got dementia. My father had always dealt with all money matters and being an only daughter she needed to rely on me to do that for her. I never had a card but merely looked after the account for my mother, setting up DDs etc , and later transferring money to her current account from her savings to make up the shortfall between her income and her NH fees.

Yes I consider it part of her estate and have quoted it as such on the papers. hence now referring to it as 'the administrative account'. It just made it easier to pay out people as her account wasn't frozen and I was dealing with arrears to HMRC at the time of her death and they won't wait for money to be available.

 

[Beate]

Hm. Sammie, your sister might have just subtly disinherited you. The point of an LPA is to manage someone's financial affairs in their name but their money is still theirs. The attorney might have a debit card for that account in their name, but always with the word POA before or after their name.

Adding someone's name to an account is a completely different thing. Anyone can have someone else added while they still have mental capacity to do so, it doesn't need an LPA to do that but it automatically makes your money their money too, in an assessment 50% is classed as theirs, and if you die, the money automatically passes to the other account holder. So if that was money originally to be inherited by the both of you, it no longer is.

Plus, more alarmingly, it raises the possibility that Social Services might class this as a deliberate deprivation of assets if someone who knows they might one day need care, basically takes half of their savings out of the equation by making them someone else's. In your function as the second attorney, I would seriously question this.

 

[lemonjuice]

Hm. Sammie, your sister might have just subtly disinherited you.

Mmm, I didn't want to mention that but that was my thinking too.
In our case it was all transferred long before she lost capacity, I was the only daughter and I had strict (verbal) instructions from my father about how to split any money left should he pre-decease my mother, which I shall honour when everything's settled.

. In your function as the second attorney, I would seriously question this.

This is good advice for you to question the wisdom of your sister being a joint account holder as opposed to just applying for PoA. Being PoA still enables one to deal with all financial affairs on someone else's behalf.

 

[Sammie1900]

Thanks everyone for the helpful replies, that’s definitely cleared things up a bit. I did make a point of saying in my initial post that all the siblings are working together and nothing is done without all of us both knowing and agreeing, so saying that my sister has “subtly disinherited me” - well if so she wasn’t very subtle about it! The main aim is to be able to access money if needed rather than having the account frozen.
I was also worried about the point raised by Beate about deprivation of assets, but given my parents’ general state of health and finances that question may well never arise.
My dad has been very clear that he wants everything to be divided equally between the siblings, and we’re all on board with that.

 

[Beate]

I understand that but it's not the point of an LPA to make a bank account a joint one. The whole point is for the attorney to be able to access and manage the donor's finances that are still in the donor's name.
To be honest, we had another case recently where the person wasn't sure what had actually happened at the bank appointment and thought someone's name had been added to the account, when in fact the bank had correctly registered the LPA against the account and issued the attorney with a POA bank card. Please for peace of mind find out what actually took place, because a joint account really is not what should have happened.

 

[Sammie1900]

It is my dad’s account and my sister’s name has been put on it. I think the fact that they took the LPA into the bank is a bit of a red herring, as I don’t think the account has been changed to a POA account (I know how these are titled as I have one for mum). I will find out exactly how things stand though.
Dad still has full capacity, but is getting to the point where he isn’t bothered about dealing with the bank himself so this would just make things easier (he isn’t part of the internet generation).

 

[jenniferpa]

Then in that case your sister could have been added as a 3rd party to the account. It permits you to operate the account but it doesn't make it joint. Are you sure the account is now joint?

 

[Beate]

Adding a name to an account doesn't make it in any way easier than registering an LPA on it. Both allow you to operate the account, but adding a name changes the whole account into a joint one which is NOT what you want for all the reasons I have given already. Your sister should take her name off and do it the correct way as an attorney.

 

[lemonjuice]

Adding a name to an account doesn't make it in any way easier than registering an LPA on it. Both allow you to operate the account, but adding a name changes the whole account into a joint one which is NOT what you want for all the reasons I have given already.

I agree and it was one of the 'cautions' the bank advised when my mother set up ours. The bank manager pointed out that any debts she incurred would become mine too and vice versa and was one reason I had as little as possible to do with the account other than setting up automatic payments whenever possible. and kept paperwork on any cash transactions, in case anything were ever to be investigated.
Much easier to manage as PoA,which I did for those last 7 years,a although 'technically' I didn't need the PoA, but in my mind and legally I ensured everything was above board.

 

[Sammie1900]

Then in that case your sister could have been added as a 3rd party to the account. It permits you to operate the account but it doesn't make it joint. Are you sure the account is now joint?

jenniferpa I don’t know - I will check.

Adding a name to an account doesn't make it in any way easier than registering an LPA on it. Both allow you to operate the account, but adding a name changes the whole account into a joint one which is NOT what you want for all the reasons I have given already. Your sister should take her name off and do it the correct way as an attorney.

Beate, but what if my dad were to die? Would she not still be able to access the account, whereas with LPA we would not as the account would be frozen?

I agree and it was one of the 'cautions' the bank advised when my mother set up ours. The bank manager pointed out that any debts she incurred would become mine too and vice versa and was one reason I had as little as possible to do with the account other than setting up automatic payments whenever possible. and kept paperwork on any cash transactions, in case anything were ever to be investigated.
Much easier to manage as PoA,which I did for those last 7 years,a although 'technically' I didn't need the PoA, but in my mind and legally I ensured everything was above board.

Lemonjuice - how would you have been responsible for debts if it was just a current account? And what do you mean by “technically you didn’t need the POA?
This is more the kind of thing I am worried about - I don’t want my sister to land herself with debts or responsibilities which will put her in a difficult position at any time. I am more worried about this than the hypothetical situation that she may take the money - maybe you think I am naïve to believe this, but as these boards show the majority of people in this situation are just trying to do the best for their parents rather than defraud other people.
Thanks once again for everyone’s input - I know how busy everyone is and this discussion has been really helpful.

 

[lemonjuice]

Lemonjuice - how would you have been responsible for debts if it was just a current account? And what do you mean by “technically you didn’t need the POA?

It was over 20 years ago now and I can't remember exactly what 'any debts' entailed. I just remember the bank cautioning against it as we were jointly responsible.

As for the 'technically didn't need PoA' , because it was an account in joint names I didn't need any 'permission' of the other account holder to do anything I wanted with any monies. I had complete access to all the money, not just 'half' of it, if you see what I mean.

But because I always knew it was my mother's account, it just happened to have my name on it, I went in and showed them the registered EPA when my mother lost capacity and thereafter administered it in my capacity of PoA. Although the Bank would not have queried any outgoings as I was a 'named person on the account' and any cheques, DD payments etc, I had a perfect 'right' to sign under my own name. However any investigations by SS, HMRC etc could have wanted to go through any outgoings with a fine toothcomb, to ensure I had done nothing untoward with 'my mother's money. Hence the importance of keeping records.

 

[Beate]

Yes, an LPA dies with the donor - after death the executor of the will or admin of the estate will have to deal with that though all banks usually release money for a funeral on production of the bill. It's a normal situation and not that difficult to deal with - it took me just one visit to the bank after OH's death with the death certificate to release the money as in his case no probate was needed and I, the former attorney was accepted as the administrator of his estate. Banks deal with this every day.