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Joint Acct - LOI made prior to one's death

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And I would bet that a fair number of banks would have heartburn with that particular transaction coming from the agent, even if Person A is still alive and the bank generally accepts the agent's authority.  

 

Let's face it.  Person A lacks the cajones to do the right thing and discuss the whole situation with Person B.

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And I would bet that a fair number of banks would have heartburn with that particular transaction coming from the agent, even if Person A is still alive and the bank generally accepts the agent's authority.  

 

Let's face it.  Person A lacks the cajones to do the right thing and discuss the whole situation with Person B.

If A is alive or presumed alive there's no reason the bank shouldn't honor the POA's requests to move around his assets.  A could even talk to his banker and make sure there would be no problem when the time comes.

 

No balls, Ahahaha!  You're right about that.

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If A is alive or presumed alive there's no reason the bank shouldn't honor the POA's requests to move around his assets.  A could even talk to his banker and make sure there would be no problem when the time comes.

 

 

Person A had best not presume the bank will honor the POA since no law requires the bank to do that.

 

And again, if the child uses the POA after Person A dies and fails to tell the bank that Person A is dead, the child will open himself up to all kinds of potential legal problems, including the possibility of criminal prosecution. Surely Person A's aversion to dealing with Person B wouldn’t be so great as to be willing to commit fraud against the bank to achieve his/her goals, right?

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Person A had best not presume the bank will honor the POA since no law requires the bank to do that.

 

And again, if the child uses the POA after Person A dies and fails to tell the bank that Person A is dead, the child will open himself up to all kinds of potential legal problems, including the possibility of criminal prosecution. Surely Person A's aversion to dealing with Person B wouldn’t be so great as to be willing to commit fraud against the bank to achieve his/her goals, right?

 

No, no fraudulent aims here, just trying to find ways to work things out within the law.  What I'm saying is that a POA could be a viable option if things end up where person A becomes terminally ill or has a heart attack and on life support or other such conditions that may allow for some "warning" before A dies, the POA could, during that time, legally and rightfully make requests on the principal's behalf, including liquidating a portion of the CDs and transferring the cash to a separate account as is A's right to do as an owner, while A is alive (it was his money to begin with anyway). 

 

The bank should have no reason to not carry out the instruction unless they were notified A was dead; furthermore, the POA would not try to execute this transfer of assets at the bank if he/she knew A was dead (that's illegal).  Again, this POA remedy would be one way to achieve what A wants and only come into play if there should be a window of time before A dies, in which the POA could carry out the request.  If he ends up recovering, and the money was still transferred largely out of B's name, then A or the POA can put the money back into the account if need be or just have to deal at that point, with telling B why A desired things to be that way.  

 

If A ends up dying in a different manner, like just suddenly on the spot, then this remedy wouldn't work.  If B dies before A, well, the problem takes care of itself nicely. 

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Well...  Remember that Person A is still married to, shall we call her, "Person C."  He's just been "living in sin" with Person B for 30 years.   :rolleyes:

30 years?  Where did you come up with that number?

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Well...  Remember that Person A is still married to, shall we call her, "Person C."  He's just been "living in sin" with Person B for 30 years.   :rolleyes:

 

Person "C", as A's spouse, is in line to inherit significant assets that are held solely in person A's name.

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30 years?  Where did you come up with that number?

We are talking about the person described in you previous thread as...

 

Let's suppose a 72 yr old married man has been living with his 72 yr old "mistress" for some 30 years.

 

Aren't we?

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Just because B knows about the CDs doesn't mean B will find out if A cashes out CD and puts it in an account in his/her own name (or puts in a trust) and then (if not in trust) makes a beneficiary designation to a trust.

A is free to tell B that (s)he didn't understand that when A dies, the money is left to B outright by operation of contract without any safety for A's heirs, and that's not the intention.

A needs to grow a pair, it seems, or accept that the money may go to B outright.  (All this assumes that the money won't be needed for bills in advance of A's death.)

A ought to be discussing with estate planning counsel.

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I asked my banker this morning and rights of survivorship, letters of intention to the bank etc. do not mean anything, as far as the bank is concerned. Whoever is named on the account has the power to withdraw the whole amount. The bank doesn't want to get involved in deciding who is legally entitled  what.

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The bank should have no reason to not carry out the instruction unless they were notified A was dead...

 

Banks tend to be very conservative on this sort of thing. If the bank officials have any doubt at all about the validity of the POA, the bank isn't going to honor it. The POA raises additional risks that the bank may be drawn into litigation if a problem arises concerning the actions taken with the account, and banks try to keep those risks as low as possible. Person A should not simply assume the bank will honor it. Person A ought to ask the bank to see what it would require to honor it. And even then, there are no guarantees since no law requires the bank to accept a POA.

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Banks tend to be very conservative on this sort of thing. If the bank officials have any doubt at all about the validity of the POA, the bank isn't going to honor it. The POA raises additional risks that the bank may be drawn into litigation if a problem arises concerning the actions taken with the account, and banks try to keep those risks as low as possible. Person A should not simply assume the bank will honor it. Person A ought to ask the bank to see what it would require to honor it. And even then, there are no guarantees since no law requires the bank to accept a POA.

 

A would likely meet with the POA and banker to make sure that the POA was verified and fully accepted and that any anticipated transactions wouldn't be a problem.  I think Banker will do what he can (within the law) to help.  He doesn't want A and A's considerable assets going elsewhere.  ;/)  Speaking of law, after doing some research, it appears that, in NJ, banks and their employees are not held liable for acting in good faith on a POA in these kinds of situations.  As long as they don't get notified of A's death beforehand (which would nullify the POA), they are free to honor the agent's withdrawal/transfer request(s).

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Speaking of law, after doing some research, it appears that, in NJ, banks and their employees are not held liable for acting in good faith on a POA in these kinds of situations.

 

 

There is a technical term for what that means to the bank:

 

Squat.

 

But good luck to Person A in all this scheming...

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This will not end well. Too much scheming.

LOL @ "scheming"...it's A's money, A put B's name on it.  A has unfettered access to control the account.   A or A's authorized agent/POA can lawfully transfer monies so ling as A is alive. A bank would have no reason to not carry out the wishes of A's authorized agent (w durable POA), unless they were notified of A's death.  If A should become terminally ill or is near death but still alive, it is fully within the law for A's agent/POA to carry out A's directive.  It seems pretty straight forward, and quite legal to me.

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A bank would have no reason to not carry out the wishes of A's authorized agent (w durable POA), unless they were notified of A's death. 

 

Banks tend to be very conservative. They don’t want to get caught in the middle of legal squabbles if they can avoid it. Even if the bank wouldn’t ultimately be liable for honoring the POA before A’s death, the potential for being drawn into litigation increases when you put an agent into the mix. I’m not saying the bank won’t do it — that will depend on the bank officials that are presented with it at the time. But no law requires a bank to accept a POA, so there is the risk that the bank may not accept it. Person A certainly should contact the bank to see what it would take for the bank to be satisfied with the POA. It may have its own form for that, for example.

 

If A should become terminally ill or is near death but still alive, it is fully within the law for A's agent/POA to carry out A's directive.  It seems pretty straight forward, and quite legal to me.

 

Legal, yes, assuming (as is common) that both acccount holders individually have the right to withdraw funds from the account with consent from other. But that doesn't mean it’s free of problems. Person B, being blindsided by this near A's death, may well start protracted litigation with A's agent, A's estate, and the bank over this. That's the risk you run in keeping your plans secret from Person B.

 

And, as I mentioned before, there is the risk that the child to whom the money goes after A’s death won't honor A’s wishes to help provide for B during B’s lifetime. I’ve seen it happen a number of times that someone the decedent thought they could absolutely trust to honor the decedent’s wishes to distribute with regard to the distribution of money or property the person inherited instead just keeps it for himself. Person A is kidding herself if she thinks that’s impossible, especially when you have already said the child and Person B evidently don't get along real well.

 

Finally, the way you propose to do this may have adverse tax consequences if the child does in fact use the money he/she inherits to provide for B that could be avoided by doing it some other way. Depending on the amount of money at stake and the applicable state laws, that could be significant.

 

All this to say that Person A really ought to meet with an estate planning attorney to do this right. She may have to deal with Person B, but that's probably better for everyone involved to know what the deal is from the start rather than leaving Person B to feel he got screwed and abandoned by Person A at the end. 

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Banks tend to be very conservative. They don’t want to get caught in the middle of legal squabbles if they can avoid it. Even if the bank wouldn’t ultimately be liable for honoring the POA before A’s death, the potential for being drawn into litigation increases when you put an agent into the mix. I’m not saying the bank won’t do it — that will depend on the bank officials that are presented with it at the time. But no law requires a bank to accept a POA, so there is the risk that the bank may not accept it. Person A certainly should contact the bank to see what it would take for the bank to be satisfied with the POA. It may have its own form for that, for example.

 

 

Legal, yes, assuming (as is common) that both acccount holders individually have the right to withdraw funds from the account with consent from other. But that doesn't mean it’s free of problems. Person B, being blindsided by this near A's death, may well start protracted litigation with A's agent, A's estate, and the bank over this. That's the risk you run in keeping your plans secret from Person B.

 

And, as I mentioned before, there is the risk that the child to whom the money goes after A’s death won't honor A’s wishes to help provide for B during B’s lifetime. I’ve seen it happen a number of times that someone the decedent thought they could absolutely trust to honor the decedent’s wishes to distribute with regard to the distribution of money or property the person inherited instead just keeps it for himself. Person A is kidding herself if she thinks that’s impossible, especially when you have already said the child and Person B evidently don't get along real well.

 

Finally, the way you propose to do this may have adverse tax consequences if the child does in fact use the money he/she inherits to provide for B that could be avoided by doing it some other way. Depending on the amount of money at stake and the applicable state laws, that could be significant.

 

All this to say that Person A really ought to meet with an estate planning attorney to do this right. She may have to deal with Person B, but that's probably better for everyone involved to know what the deal is from the start rather than leaving Person B to feel he got screwed and abandoned by Person A at the end. 

Thanks for the reply.  You raise some concerns, but I don't see them as large risks.  Perhaps it could go the other way, and the bank or B could be held liable if they prevent A or A's agent from managing the account, especially if B subsequently makes a grab for all of it. 

 

I don't think there's a big threat as far as B potentially bringing suit.  B has no contract or proof of any financial arrangement between B and A.    A is the origin of the assets in question, which I think may be a significant aspect if things went to court. A would be doing a legal transfer to another account, as is within his (ok it's a him! and B is a her!) right as an owner (or as A's POA would do on his behalf).

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