SMART MONEY: Surviving spouse acquires joint checking account
April 28, 2013 3:50 AM

DEAR BRUCE: My sister and her husband had a joint checking account. My sister signed a “paid on death” form and put my name as the receiver. The bank did not say anything about him signing.

Naturally, to make the situation more confusing, she died before he did, and now the bank says the “paid on death” form is no longer admissible since their money became his money. Is this correct? — M.J., via email

DEAR M.J.: I am not sure what it is you signed. A “paid on death” form with your name on it as a receiver? I frankly do not know what that means. And why the bank had an obligation to say anything to him about signing is also something I am having a problem understanding.

However, given the fact that she is dead, when the bank says the “paid on death” form no longer applies since their money has become his money, it is probably the case. If there is substantial money involved, you may wish to consult an attorney. I am not certain what has happened up until now, but I suspect that when she died the money became his, and that’s the end of the story.

DEAR BRUCE: I have one son, two grandchildren, one daughter-in-law and a step-grandson (all one family). I have worked extremely hard to amass the monies I have right now, and I am hoping there is a way I can prevent the daughter-in-law and step-grandson from ever getting any of it.

If I leave money to my son, would it automatically go to his wife?

If his wife gets any, she will give it to her son (the step-grandson, age 22), and I don’t want him to get any.

Do I have to make out a trust for the grandchildren to get my money after I die (I’m 68) and leave my son out completely, that way avoiding her getting any of it? Should I specify an age for my grandchildren to get it?

I know it sounds confusing, but it’s my money and I think I should be able to do what I want with it. Any suggestions? — C.H., via email

DEAR C.H.: You can do with your money pretty much what you choose. You can’t cut out a spouse, but that’s not a problem here.

If you don’t want your daughter-in-law and step-grandson to ever get their hands on your money, then don’t leave it to your son. Just leave the money to your grandchildren. You can do this by way of a trust, which pays at a certain age or upon your death or on any other condition that you wish to impose.

It’s your money and it’s your call, but by all means do it properly, either in a will or in a trust. Even if you do have a trust, you still want to remember your grandchildren in the will for other things that you might own, but remember, it’s your call.

Also, in your will, you should make it very clear that you didn’t overlook your son, his wife or the step-grandchild and that you specifically wanted the money to go to your two grandchildren. You should also explain to your grandchildren what you are doing and why. Make it clear that you don’t want them to give any of the money to the mentioned folks after your demise.

Send questions to bruce@brucewilliams.com or to Smart Money, P.O. Box 7150, Hudson, FL 34674. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided. The Bruce Williams Radio Show can now be heard 24/7 via iTunes and at www.taeradio.com. It is also available at www.brucewilliams.com.

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