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  1. #1
    Join Date
    Oct 2020
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    eastern WV
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    2

    Default A Question About Bank Accounts

    My question involves estate proceedings in the state of: NYS
    If this is in the wrong forum, please forgive me but I see nothing that seems a better place to do this. Please correct me.

    Does putting a family member on your bank account mean that, if you die, (no will) the funds in the account belong to that person. AND that they do not owe any taxes for the funds becoming theirs?
    This is from a conversation where someone has done this with the understanding no tax issues are involved. Her kids just get to keep the funds.
    I believe that there are tax issues to address.
    Barry

  2. #2
    Join Date
    Sep 2020
    Posts
    178

    Default Re: A Question About Bank Accounts

    If there is enough money for tax issues to arise, then the account holder would already have plenty of experienced professionals advising her.

  3. #3
    Join Date
    Jul 2018
    Posts
    2,730

    Default Re: A Question About Bank Accounts

    Quote Quoting Nomatch1
    View Post
    Does putting a family member on your bank account mean that, if you die, (no will) the funds in the account belong to that person.
    For starters, what does it mean to "put[] a family member on your bank account"? Are you talking about making this family member an authorized signer on the account? Are you talking about making the family member a joint owner of the account? Are you talking about making the family member a pay-on-death beneficiary?

    Also, there is no "if you die." You will die. It's only a matter of when.


    Quote Quoting Nomatch1
    View Post
    This is from a conversation where someone has done this
    Done what?


    Quote Quoting Nomatch1
    View Post
    I believe that there are tax issues to address.
    Why do you believe this? Do you have any basis in law for believing this? I'm not suggesting you're not right, but I'm just wondering how it is that you formed this belief.

  4. #4
    Join Date
    Mar 2013
    Posts
    18,304

    Default Re: A Question About Bank Accounts

    Quote Quoting Nomatch1
    View Post


    Does putting a family member on your bank account mean that, if you die, (no will) the funds in the account belong to that person. AND that they do not owe any taxes for the funds becoming theirs?
    Depends on what you mean by "putting a family member on your bank account."

    If you make that family member a joint owner the money not only goes to that person when you die but that person co-owns the account and can take the money and run while you are alive.

    Best to make the person a beneficiary on the account. No access while you are alive. Automatically goes to the beneficiary when you die. No federal taxes on the inheritance unless the amount in the account exceeds the exclusion amount which is over $11,000,000. The NYS exclusion is $5,800,000 for now.

  5. #5
    Join Date
    Oct 2014
    Posts
    8,238

    Default Re: A Question About Bank Accounts

    Quote Quoting Nomatch1
    View Post
    I believe that there are tax issues to address.
    There certainly might be tax issues depending on the details of the person's estate, his/her income, the size of the account, and exactly what is done. "Putting a family member on your bank account" can mean several different things, so it matters exactly what you mean by that: are you making the family member a joint owner of the account, a pay on death (POD) beneficiary of the account, or something else?

  6. #6
    Join Date
    Oct 2006
    Posts
    16,441

    Default Re: A Question About Bank Accounts

    Quote Quoting Nomatch1
    View Post
    My question involves estate proceedings in the state of: NYS
    If this is in the wrong forum, please forgive me but I see nothing that seems a better place to do this. Please correct me.

    Does putting a family member on your bank account mean that, if you die, (no will) the funds in the account belong to that person. AND that they do not owe any taxes for the funds becoming theirs?
    This is from a conversation where someone has done this with the understanding no tax issues are involved. Her kids just get to keep the funds.
    I believe that there are tax issues to address.
    Barry
    If the accounts are simply standard checking or savings accounts with a few thousand or even a few tens of thousands there are not going to be any tax issues to address. If the accounts are something other than that, then more information would be needed to address whether or not there could be a tax issue.

    Generally, anything that passes to a person outside of an estate is not going to have a tax issue to the beneficiary unless the person who had passed away would have a tax issue with those same funds. Most assets also get a stepped up basis to fair market value so no capital gains there. Taxingmatters addressed estate tax issues. An IRA would be an example of something that would have a tax issue to address.

  7. #7
    Join Date
    Oct 2020
    Location
    eastern WV
    Posts
    2

    Default Re: A Question About Bank Accounts

    Apparently not.

    Pretty well under those limits.

    Wait, it is when and not if???I have been lied to.
    No basis in law, just looking out for a friend who is unsure. Better careful than not.
    I made her promise to not put more than 5.8M into that account, her kid might run off with that much.

    Ladies, gentlemen, thanks for your effort and time.

  8. #8
    Join Date
    Mar 2013
    Posts
    18,304

    Default Re: A Question About Bank Accounts

    Quote Quoting Nomatch1
    View Post

    Wait, it is when and not if???I have been lied to.
    If somebody told you that you'll never die, yeah, you've been lied to.

  9. #9
    Join Date
    Nov 2013
    Posts
    7,052

    Default Re: A Question About Bank Accounts

    If the account is a retirement account and you designate a beneficiary (POD), that beneficiary will have to withdraw a certain amount each year (according to their age) and pay income tax on it.

  10. #10
    Join Date
    Apr 2020
    Posts
    12

    Default Re: A Question About Bank Accounts

    Do you have to put a checking account into a Revocable Living Trust, of can you designate a beneficiary with the bank?

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