I recently learnt about several cases that have raised concerns about protecting the rights of seniors who are holders of joint accounts.

In one scenario, an adult male discovered that his estranged wife had emptied his bank account while he was working overseas. He explained that upon returning to the island he visited his commercial bank to check on his account. The customer service representative was uncertain how to break the news to him that his account had only a meagre amount.

I have seen senior citizens cry in distress because close family members who they trusted as joint account holders breached their trust by withdrawing considerable amounts of money from their accounts. Some seniors, however, call or visit their banks to check on their accounts just to make sure that their life savings are intact.

What are the pros and cons of seniors holding joint accounts?

Some seniors will name adult children as joint account holders for several reasons. It is convenient to have a trusted family member attending to important personal matters on their behalf should the need arise. For example, paying medical bills, buying groceries, and covering other important expenses that seniors are not longer able to do by themselves because as some people age they are likely to have health challenges or cognitive decline.

Having a joint account holder may be necessary. Some seniors are not au fait with technology and therefore rely on their children to make withdrawals or fund transfers on their behalf. An alert child can detect or spot any fraudulent transaction, misappropriation of funds, or transaction errors much more easily than some seniors. Should the senior die, the ownership of the funds passes to the surviving account holder. The ease of access to the funds allows for costs such as funeral expenses, hospital bills, or outstanding debts to be paid. A joint account supersedes the probates of a will, making it a convenient method to transfer the assets of the deceased. Once proof of death is established, the joint account holder has immediate access to the funds.

But there are also drawbacks to a senior and adult child sharing a joint account. Either party can withdraw funds without consent. Creditors may also gain access to funds in the account. With a joint account, both the primary and joint account holders have equal access to the funds. Inheritance challenges can occur in instances where siblings who were not joint account holders seek a share of the funds in a deceased joint account.

Some people, however, refuse to add joint account holders to their accounts. It’s simply a matter of trust. In such cases, I encourage these people to ensure that they put in place a will that will guide the disposal or distribution of their estate.

Some seniors have a family member as a joint account holder on the basis that the loved one is the only family member in Jamaica or the closest to them geographically. This can end up as a terrible mistake. My advice is to choose a joint account holder based on trust. It doesn’t matter if the trusted family member lives overseas. If they will visit the island to plan and attend your funeral, it means they can conduct business on your behalf while you are alive, regardless of distance. There are people whose joint account holders reside overseas, while others have given the power of attorney to trusted individuals who are living overseas. A power of attorney is a legal document that allows someone to act on your behalf. It gives the person the right or power to act or make decisions should you become incapacitated. The power of attorney allows for medical and financial decisions to be made. The document is signed by both parties. I recommend that copies of the power of attorney be kept at all institutions where accounts are opened.

Account holders must understand the pros and cons of having joint accounts. Some adult children, family members, or trusted friends can be influenced by their spouses or other persons to withdraw funds. Other joint account holders may also be spendthrifts. There are those who may need funds to maintain a gambling habit, supplement household income, or fund a drug habit, while there are others who are prudent money managers. Careful assessment must be made in choosing a joint account holder who has your best interest at heart. Always remember that a joint account holder can withdraw funds at any time without your permission. The funds once withdrawn cannot be recalled. But there is hope. A joint account holder can be removed by closing the account. A new account can be opened with or without a new joint account holder.

Seniors who seek to open a joint account should seek legal advice. Financial guidance from a professional and experienced financial advisor is also crucial.

Grace G McLean is a financial advisor and retirement specialist at BPM Financial Limited. Contact her at gmclean@bpmfinancial or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at livingaboveself@gmail.com