Question: My stepfather is ill and wants to add me to his accounts. My mother has recently passed leaving behind medical expenses. Will having my name on his accounts obligate me to pay for his/her unpaid bills/medical expenses?
Answer: You should not become personally liable for your parents’ debts simply because you are added to the account as an owner. However, that is not to say that adding you to the account is the best way to go and doing so could cause a number of problems which are beyond the scope of this email. The better plan in this case could be to have your father make outright gifts to you (if this can be done without causing other negative implications) or have him add your name to the account as an accommodation party (so you can write checks for example). It is possible that adding you as joint owner on the account may be a good plan as well (where the account becomes yours upon his death). It just depends on what you all are trying to achieve.
Bottom Line: Your step father should first figure out what he is trying to achieve from an estate planning, elder law and tax perspective and then consult with an attorney to help him figure out how to get there. This is precisely the type of situation where doing one thing may be problematic in other ways. How’s that for a precise answer!?
As always, if you have questions or would like to know more about retirement plans and beneficiary restrictions please contact Steven E. Shane at:
firstname.lastname@example.org | 301.575.0313.
Steve provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.