Durable Power of Attorney Can Be An Effective Mechanism

In estate planning, it is not just “what you own” that is important, it is also, “how you own it.” One couple owned all of their assets as joint tenants, including their bank accounts. They titled their accounts this way in case one spouse became incapacitated –the other could then easily access the accounts to pay bills and manage the account.

Some of the joint tenant assets were set to go to the beneficiary instead of the spouse when the original owner died. Some of the bank accounts even had payable-upon-death (POD) designations. A problem could arise if one spouse had an account listing someone other than the spouse as the POD beneficiary. Since the account is jointly owned by both spouses, the money would go directly to the spouse upon death instead of to the designated beneficiary.

One way around this is to list your spouse as a durable power of attorney for your account instead of as a joint account holder. That way, the spouse can still have access to manage the account if you become incapacitated and upon your death, the account would properly pass to your designated beneficiary.

See Laura Medigovich, Your Finances: Asset Titles Can Make or Break Estate Planning, recordonline.com, June 24, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.