Estate planning can be a minefield of legal issues. A recent court case highlights the problem of determining the intent of joint bank and investment accounts. In this case, a father transferred his accounts jointly to himself and his daughter. After his death, the daughter’s siblings took action against her over their father’s property. These jointly held funds became a hotly contested issue as to whether they formed part of the estate and should be divided, or, whether the father had intended his daughter as the sole beneficiary of his money.

You too may have considered transferring your property to joint ownership. This is often done as a convenience to allow children the ability to manage your money in the event of incapacity. Or you may want specific children to inherit certain property. But… what actually happens when you die? Does it go to that child, or to your estate to be shared by all of your children?

The court has viewed joint accounts in two ways. The first is where the property goes to the joint owner upon death. The second is where the property is actually held in trust for the estate and distributed to the heirs.

What does this mean to you? Well, the court can only rely on the facts as presented, whatever they may be. There could be uncertainty in how the court would view the joint accounts. The best way to avoid uncertainty is to have your intention clearly stated.

So, how can you avoid this minefield? Write a letter that clearly states your wishes and give it to your lawyer, or add it as a codicil to your will. Alternatively you can make a note on the bank’s joint account records that, at the death of one of the joint owners, the money will go to the joint survivor and not your estate.

Considering that the father had died in 1998 and it took until 2005 for the courts to make a decision, it only makes sense to be as clear as possible. Consider all the possibilities. Make sure you are actually leaving your money to the right person.

This is a monthly article on financial planning. Call or write to Rick Sutherland CLU, CFP, FDS, R.F.P., of Fundex Investments with your topics of interest at 798-2421 or E-mail at rick@invested-interest.ca.