Adding your spouse’s name to a bank or investment account is a good way to minimize the amount of probate fees that will be payable on your death as the account will pass to your spouse outside of your estate by right of survivorship.
Adding your children’s names can be more problematic. The issue that arises on your death is whether you intended the money to go to that child or your intention was for that child to share the money with their siblings after your death, i.e. the joint tenancy was only created to avoid probate fees. At law this would be called a resulting trust. A resulting trust arises where someone gifts property to someone else with the intent that the person will hold the property until a certain date and then return it to the other person or to their estate.
In order to avoid this controversy when creating a joint account it is important to ensure there is collateral evidence of your actual intention. Your intentions could be spelled out in your will by adding a clause that says:
“All joint tenancies which I have created during my lifetime are true joint tenancies and it is my intention that the joint tenant receive the property on my death as their sole and separate property” OR “it is my intention that all joint tenancies created during my lifetime not be construed as passing the beneficial interest in my property to the joint tenant and that the beneficial ownership of the property which is placed in joint tenancy remains mine.”
Deborah A. Todd