Convenience Accounts vs. Joint Checking Accounts

It’s a common scenario: an elderly person needs some assistance with managing finances and paying bills. The easiest way to accomplish that is to add someone with greater stability to their bank accounts, usually a younger family member or close friend.

The problem with that, though, is that the joint account holder has full access to the account. They can withdraw funds as they please without any notice or accountability. And when the older person dies, the entire account becomes the joint holder’s in full — regardless of what any will says.

These stories often end in strife. The account holders inevitably arrive at disagreements about how the account is being used, or the deceased’s family are surprised and upset when the contents of the account aren’t dispersed according to the will.

That’s why an alternative to the joint checking account is becoming increasingly popular: convenience accounts. They work just like joint accounts, except the other person has a legal duty to only use the funds for the original holder’s benefit. And when that person dies, the account goes to the estate, meaning the will controls.

Convenience accounts have been available in about half of the country since the late ‘80s / early ‘90s, but they didn’t get a lot of attention until The New York Times began to sing their praises in 2011. Now Newsday has a new piece, recommending convenience accounts as a kind of protection for elderly Americans.

Of course, convenience accounts are just one piece in the larger estate-planning puzzle. Still, they can certainly prove both useful and protective for aging account holders.

If you’d like to learn more about setting up a convenience account and how one can play into a larger plan for your future, the experienced Phoenix elder law attorneys at can help. Call us today.

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