Joint accounts, also known as “the common person’s estate plan”, seem like an easy solution to evading probate and transferring funds to family members. However, there are some precautions that one must take to assure a joint account does not affect other aspects of the elder law planning process.
One aspect that could be affected is Medicaid coverage. When applying for Medicaid, the state bases eligibility on the applicant’s assets. Some states disregard the fact that there are two names on the account and work under the assumption that all assets belong to the applicant. Such an instance would require additional forms of proof to verify the correct amount of assets that belong to the applicant. Adam Tobin is experienced Medicaid planning and can help you determine the best course of action for your family.
Additionally, transferring assets out of the joint account or removing a joint owner from this account can be viewed as an improper transfer of assets. Depending on the amount of assets, this could make one or more of the account owners ineligible to receive Medicaid for a certain time period. Even if a spouse is taken off of the account because they are entering a nursing home, this is considered an ‘improper transfer’ and can negatively impact your eligibility.
Finally, joint accounts are accessible to all the account owners’ creditors, so if one of the account holders incurs significant credit card debt and is sued, collectors can take any money from the account, no matter which account owner contributed it.
Due to the setbacks associated with having a joint account, a trust may be a better alternative to protect your family assets. To learn more about Massachusetts living trusts and the options that are best for you and your family, it is best to consult with an experienced elder law attorney. Contact Adam Tobin today to learn more about trusts and estate planning.