Clients add adult children on bank accounts “to avoid probate”. Harrison Pensa estate lawyer Cate Grainger explains parents lose control over joint accounts.
Every few months, I come across a client who has added an adult non-dependant child on their bank and investment accounts “to avoid probate”. The trouble with this approach is the parent loses control over the now-joint accounts. The adult child joint account holder has complete access to the funds and can withdraw them at any time without the permission or knowledge of their parent.

Additionally, the accounts are now exposed to any creditors of the child: if the child gets divorced or is sued, the accounts may be at risk.

Estate Administration

And, when the parent dies, Estate Administration Tax (formerly “probate fees”) may still have to be paid. These joint accounts are subject to the presumption of resulting trust. This is because equity presumes a bargain so, absent proof the accounts were truly meant to be gifted to the child, the accounts revert to the deceased parent’s estate and do not pass to the surviving joint account holder.

If you intend that your accounts will be gifted to your child on your death, you may want to consider signing a Declaration of Intention or Deed of Gift. This will rebut the legal presumption of resulting trust.

Feel free to call or email me with any questions!

Cate Grainger is an Estate Lawyer in London with the Harrison Pensa. Her practice focuses on estate planning, estate administration, corporate succession strategies and not-for-profit law. Contact Cate by email.