Common Misconceptions About Joint Accounts And Joint Ownership

Elderly parents will often put their money into bank accounts held jointly with their adult children, or transfer real property into a joint tenancy with one or more of their adult children. Sometimes, this is done for expediency so that an adult child can help manage the asset. In other cases, this is a planning technique used to avoid estate administration tax when the parent dies.

Whatever the motivation behind the transfer, there is a persistent misconception that the asset passes to the surviving child when the parent dies and does not form part of the parent's estate. In fact, there is a legal presumption that such assets belong to the deceased parent's estate. The adult child bears the burden to rebut the presumption and to prove the parent intended to gift the asset to the adult child.