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Trust and Estates Attorneys

Impact of DC Probate on Joint Accounts

There are a few different ways in which assets may pass following a person’s death. Which of these ways goes into effect will depend on the circumstances of the particular situation. One possible way that assets could pass is through joint ownership, or a joint account. A DC probate lawyer can play a big and important role in assisting someone going through the probate process, who has some claim to assets through a joint account. This can be a complex process and it is advisable to work with an experienced lawyer under those circumstances.

Each bank and financial institution handles the administration of joint accounts differently. There may be a review of the account ownership to determine whether the account was intended to be a true joint account, or an account established for convenience only to assist with banking.

Joint Accounts and Probate

Assets pass in four ways at a person’s death in DC. The first way that they pass is by beneficiary designation. The second way that they pass is if an asset has been pre-funded into a trust. The third way that assets pass is by ownership or titling, such as joint ownership. The fourth way that assets pass, which basically only leaves assets in the decedent’s sole name, is according to the terms of the decedent’s last will and testament or pursuant to the District of Columbia laws of intestacy. The assets that are in the decedent’s sole name, without a beneficiary designation or joint owner, comprise a decedent’s probate estate.

Often joint accounts are assets that pass by operation of law and pass outside of the probate proceeding. Generally, this can be complicated and may not be advisable depending on a person’s overall estate plan or overall wishes.

The negatives of joint accounts in many situations is that an estate may be subject to administration expenses or taxes. If many of the assets of a decedent pass by operation of law, there may not be enough liquidity in an estate to pay the funeral expenses, administrative costs, or taxes due.   

Maintaining Access to a Joint Account Before Probate

Whether or not a person maintains access to a joint account even before he or she probates the will, differs on a case by case basis. For example, if it is a true joint account, individuals may have access to that account at any time and there may be little to no ramifications if that joint owner uses the account for his or her own benefit.

One of the ways to avoid the issue of ownership for many individuals who begin to lose capacity or begin to lose the ability to do their own banking, is for the individual to execute a Power of Attorney. The Power of Attorney would allow another person to assist the individual with his or her bank accounts. Joint ownership without careful consideration of an overall estate plan can result in unintended beneficiaries or an insolvent estate.