Death, Taxes, and Bank Accounts: The Surprising Truth Your Banker Won't Tell You

What happens to your bank accounts when you die? It's a deceptively complex question that goes far beyond the surface-level solution of "just add a beneficiary." In this eye-opening conversation, attorneys Greg and Jordan McIntyre unpack the hidden dangers lurking in common estate planning strategies that could leave your hard-earned assets vulnerable.

The father-son legal team dismantles the popular misconception that joint ownership with rights of survivorship provides foolproof asset transfer. As they reveal, this approach can unexpectedly expose your accounts to creditor claims during probate—a risk many financial advisors never mention. They offer a smarter alternative: utilizing power of attorney relationships while maintaining beneficiary designations, providing management capabilities without the liability exposure.

But the discussion goes deeper, addressing the elephant in the room that basic estate planning often ignores: long-term care needs. With 70% of Americans over 65 requiring some form of long-term care during their lifetime, the McIntyres explain why simple beneficiary designations fail to protect your assets when they're most vulnerable. They introduce specialized trust strategies that maintain your access to funds while shielding them from catastrophic care costs.

The attorneys also raise important questions about the readiness of beneficiaries to receive inheritances and how trusts can provide structure and protection for younger heirs. Their holistic approach emphasizes that true estate planning prioritizes your needs while living, not just asset distribution after death.

Ready to gain clarity on protecting your financial legacy? Schedule a free consultation with McIntyre Elder Law by calling 1-888-999-6600 or visiting mcintyrederlaw.com/scheduling. Your financial security deserves more than a simplistic solution.

Episode Transcript

Greg McIntyre (00:00):
Hi, I'm Greg McIntyre at McIntyre Elder Law.
This is the Elder Law Reportand today our subject is how do
you pass a bank account or bankaccounts if someone passes away
or if you die?
How do you pass along your bankaccounts?
Then you can talk about how doyou pass along investment

(00:20):
accounts, like stock accounts,things like that, and the answer
may seem straightforward, butit's not, and I'll tell you why
and I'll tell you where yourpitfalls are, depending on what
you choose To assist me today orto lead me, I don't know one or
the other.
I am very proud to introduce onthis Elder Law Report once
again my son, fellow attorneyand associate in our firm,

(00:42):
jordan McIntyre.
Hey, jordan,hey, Dad, I'm attorney Jordan
McIntyre with McIntyre ElderLaw.
You are, you are hey.
So, jordan, hey, you've metwith a ton of clients.
You know the law surroundingthis.
What's a straightforward waythat you can pass a bank account
, let's say my checking savingsaccount, maybe I have an
investment account at a bank,stock in it or something.

(01:03):
How can I pass those accountsto my children if I die?
Easiest way is to namebeneficiaries on those accounts
so you could name payable ondeath.
Or investment accounts willhave what's called transferable
on death, pod or TOD on theaccounts.
That's an easy, straightforwardway to pass it right?
I think so, and you would thinkthe answer would stop there.

(01:26):
But wait, there's more.
There's a couple of stages ofthis and I'll tell you where
there's liability in a couple ofareas and I'll tell you what I
prefer, based on my experienceand advice.
Okay, how about just based onmy experience?
And again, disclaimer, I'm notyour attorney, unless you

(01:46):
actually hire me, okay, but I ama licensed attorney in the
state of North Carolina with alot of experience around this.
So let's say that's the easyanswer.
Hey, we're just going to putbeneficiaries on this, all right
.
Also, I hear all the time withhusband and wife, for example,
or a parent and a child.
Hey, I put it as us, as jointowners with rights to

(02:10):
survivorship.
Jordan, in your consultations,do you see that regularly?
I do, okay.
So what do you know?
A pitfall of joint owners withrights to survivorship?
Because I do.
I think you're going to tell us.
I'm going to tell you, okay, apitfall of joint owners of
rights to survivorship, and whyit's not.
The thing that I prefer is ajoint owner with rights to

(02:34):
survivorship account, a bankaccount, an investment account
is subject to claims ofcreditors if a probate estate is
opened in North Carolina.
And here's why If you look atan application for a probate
estate, at the very top in theaccounting part you list all

(03:00):
your joint owner with rights tosurvivorship
accounts.
about the accounts that thedecedent held?
Why?
Why would you have to put thoseon a probate estate filing if
they passed automaticallyoutside the probate estate?
Why would you do that?
Why would you have to do that?
Do you know, jordan?

(03:20):
I think they're still subject toany type of claims right.
They're not the first pot ofmoney or assets that are subject
to claims, the assets that aregoing through the probate estate
, because, remember, those arebeneficiary accounts if they
have PODs or TODs which passoutside of probate, or their

(03:40):
joint owner with rights tosurvivorship account which pass
outside of probate.
But what it is is, if there'sclaims that come in, the probate
is stayed Okay and the moneyand assets flowing through the
probate estate are not enough tosatisfy those claims, that is a
secondary source, a secondaryplace where the court makes the

(04:04):
executor or administratorpersonal representative, the
person who's over the estate,makes them go to collect that
money to supplement the assetsin the estate to pay the claims.
So really, what you're doing byputting joint owners rights
survivorship on accounts, ispotentially subjecting those

(04:25):
accounts to the claims ofcreditors in a probate matter,
even though they pass outsidethe probate estate.
So that's your danger andliability there.
Made a mistake?
So that's your danger andliability there.
I prefer to see an agent undera power of attorney, a general,
durable power of attorney, foryou to get on an account that
way for a sibling, a parent,anyone you're helping and

(04:48):
assisting with managing affairs.
That makes you their agent.
They have the ability to nameyou the agent and then you
operate the account and helpthem and then you could still be
the payable on deathbeneficiary, but you're not a
joint owner with rights tosurvivorship.
Therefore not subjecting thataccount to the potential claims

(05:10):
of creditors in a probate matter.
That's an end around that andthat's what I prefer and that's
what I recommend to my clients.
Also, asking how to pass bankaccounts outside of probate is
not a simple and straightforwardquestion, because I need to

(05:33):
know more.
To answer the questionadequately, I need to know what
is your healthcare situation.
Do you have long-term careinsurance.
What's the value of your liquidassets?
How much money do you have thatyou can allocate to paying

(05:54):
toward long-term care if youneed it?
The reason that's so importantto me, and it should be to you,
is that there's a 70% chancethat everyone over the age of 65
in America right now is goingto need some type of long-term
care during their life.
There's in-home assisted livingor nursing home care and that's

(06:23):
a huge percentage.
I told you there was a 70%chance that, I don't know,
something was going to happen toyou.
You'd probably be inclined totake action.
So simply placing a beneficiaryon a bank account or an
investment account, that's stillyour asset.
It's not protected inside of atrust like a convertible trust

(06:47):
or an irrevocable trust.
Let's say it's a specializedirrevocable trust, a Medicaid
asset protection trust.
You could place it there andstill have the use and benefit
of it and then be able to shutthe safe door and protect it,
and then it's not consideredyour asset in an application for
a benefit to pay for long-termcare.

(07:08):
That might be a wiser strategy,given the 70% chance or
likelihood of needing long-termcare if you're over 65.
So you have to understand that.
Just avoiding probate andavoiding claims of creditors,
including a benefit, doesn'thelp you qualify for the benefit

(07:30):
itself.
It doesn't in any way get thatoff the books for you or help
you protect that account.
It just makes it easier to passalong if you die.
And then there's otherconsiderations and thoughts.

(07:53):
Okay, how much money is that?
What do you want to do withthat money?
Are you leaving that money to ayoung person?
Should that money be set aside,say in a trust, to pay for a

(08:13):
collar and then maybe give itout over time to help
grandchildren, instead of cursethem with a lot of money at a
young age?
All these and moreconsiderations go into a consult
when you sit down with anestate planning or elder law
attorney, or you sit down withmyself, or I would say, many may

(08:35):
, but he's bigger than me, he'sa lot taller than me.
He's still the master.
No, no, yes, but he's still themaster, no, no.
Look, I'm so proud to be ableto work with you, jordy, me too,
and you know, if you want tosit down with myself, jordan, or

(08:58):
one of our very, very educated,learned and experienced estate
planning and elder law attorneysand talk about the best way to
pass your assets I'm even moreconcerned about you while you're
alive, and I say that all thetime.
So that's really where you needto focus.

(09:18):
How am I going to take care ofmyself, not have my assets
frozen if something happens tome, be able to pay for long-term
care?
And then the next part is hey,once we've got that squared away
, how are we going to let whatwe've worked hard for during our
lives help our families if wepass away?

(09:39):
So we'd love to offer a freeconsultation to you and your
family to sit down and discussthese things and get clear on
them.
Clarity is king.
That's my number one thing, andI would love to help you reach
clarity in these things in yourlife.
You can exercise that freeconsult by calling

(10:00):
1-888-999-6600 or by goingonline and scheduling directly
on our calendars atmcelderlawcom slash scheduling.
That's mcelderlawcom slashscheduling.
And thank you and Gordon, thankyou.
I appreciate you doing this.
Yeah, come see me in Shelby,come see me in Charlotte.

(10:22):
See you guys.