I’d like to share the story of my client, "Mr. Jones".

A widower, he realized the house he and his wife raised their family in was becoming difficult to maintain. He decided to sell and move, putting the proceeds in a joint account with his son, Jake, allowing Jake access to the funds as needed. Following Mr. Jones’ eventual passing, the plan was to split anything left between Jake and his brother, Bill. Harmless, yes? Not so fast.

A joint account could cause multi-generational harm. For example, once the assets are in Jake’s possession, they are subject to his creditors, lawsuits, etc. Jake owns a capital-intensive business, which has previously required him to borrow. If he has trouble paying creditors, his father’s funds are at risk. Jake also has teenage children who drive. That means those funds are vulnerable to their potential poor driving.

When Jake’s children apply for college, all assets must be disclosed in their scholarship/financial aid applications. In doing so, the expected family contribution may increase due to this account. Additionally, school selection is often influenced by cost. The kids could be saddled with excessive loans, or select a second-choice school, because of this account.

The plan to split residual money sounds reasonable. However, following Mr. Jones’ death, his funds will belong to Jake outright, with Bill unable to access the account without approval. If Jake chooses to give Bill half, anything above $15,000 will be a taxable gift for which Jake is liable. Jake could also decide not to share. This could cause a rift between brothers and a fractured family. What’s more important, the ease of a joint account or one’s family?

My goal in sharing this story is not to argue that joint accounts are inherently harmful; it’s to show potential consequences, and encourage you to discover alternative methods. With our experience and resources, we were able to help the Joneses accomplish their goals while preventing collateral damage. Let us help you too.

Keith Barberis, Financial Advisor of Raymond James Financial Services, is located at 7550 Wisconsin Ave Suite 420, Bethesda, MD 20814. Steward Partners Global Advisory LLC and Barberis Wealth Management at Steward Partners maintain a separate professional business relationship with, and our registered professionals offer securities through, Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Steward Partners Investment Advisory LLC. He can be contacted at 240.800.3447 or at keith.barberis@stewardpartners.com.

Views expressed are those of Keith Barberis and not necessarily those of Raymond James or RJFS, and are subject to change without notice. Information contained herein was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. There is no assurance these trends will continue or that forecasts mentioned will occur. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. The examples throughout this material are for illustrative purposes only. Actual investor results will vary. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. Ad Approval #2474268