Critical Joint Account Pitfalls: Essential Guide for Caring Daughters

12 July 2023

Taking care of aging parents is a noble, heartfelt responsibility. As parents reach a stage where they can no longer live alone, it becomes paramount for people to step in and offer necessary assistance. One of the most common ways children extend their support is by becoming co-owners of parent’s financial accounts or real estate properties. However, these decisions, born out of care and concern, come with potential risks. Understanding joint account pitfalls and seeking creative workarounds is key to protecting both parties’ interests.

Joint Bank Accounts: A Double-Edged Sword

a double edged sword representing one of the pitfalls of a joint bank account

Establishing a joint bank account with an aging parent can seem like a pragmatic solution, enabling seamless management of their finances. However, the convenience comes with several downsides.

Firstly, the joint account typically operates on the “right of survivorship” principle, meaning the remaining balance passes directly to the surviving account holder—bypassing probate. While this sounds beneficial, it can complicate estate plans. Furthermore, a joint bank account exposes your parent’s money to your financial liabilities.

Workaround: Consider using a Durable Power of Attorney. This legal document allows you to manage their financial affairs without becoming a joint owner. Alternatively, set up a “convenience account,” where you are given signing privileges, or a Pay-On-Death (POD) designation, which transfers the account directly to a named beneficiary upon the owner’s death, avoiding probate and protecting the funds from your creditors. Most banks will allow multiple pay on death beneficiaries, that way the account can be consistent with your estate plan.

Joint Tenancy and Joint Ownership in Common: Not Always a Walk in the Park

aging parent holding the hands of his daughter to represent joint Tenancy and joint Ownership

Jointly owning real estate with your parent can be fraught with challenges. Two forms of joint property ownership are common: Joint Tenancy and Tenancy in Common.

Joint Tenancy

In joint tenancy, the owners possess an equal, undivided interest in the property. Upon your parent’s death, you’ll inherit the property without it going through probate. However, this can inadvertently disinherit other heirs and expose the property to your personal financial troubles during your parent’s lifetime.

Tenancy in Common

In tenancy in common, each co-owner holds a distinct, transferable share in the property. Your parent can pass their share to anyone via their will, providing more flexibility in estate planning. However, disagreements over property management or the decision to sell can lead to legal complications.

Workaround: Consider setting up a revocable living trust, which allows you to manage their assets without joint ownership, providing a smoother transition than joint accounts and more flexibility for estate planning.

Other Joint Agreements

Joining other contracts, such as utilities or credit card accounts, with your parent can seem harmless, but they pose potential pitfalls as well. If your parent defaults on payments, you may be held liable, impacting your credit score. It can also complicate the estate settling process, potentially leaving you responsible for any unpaid debts.

Workaround: If a joint account is necessary for practical reasons, consider using it only for your parent’s day-to-day spending money, while keeping the bulk of their savings in accounts under their sole ownership, protected with a durable power of attorney or POD designation.


As we strive to take care of our aging parents, we must remain informed about potential financial and legal pitfalls with joint accounts. Joining accounts or properties with your parent can simplify some aspects of their care but may complicate others, especially estate planning.

Before making any joint decisions, it’s prudent to consult with an estate planning attorney to explore all implications. This not only ensures the well-being of your parent during their lifetime but also helps in executing their final wishes accurately, minimizing any potential disputes or complications

About the Author: Liz Johnson of Liz Ann Johnson Elder Law, PLLC is a licensed attorney practicing Elder Law in Washington State. With a unique approach to practicing law, Liz combines her legal knowledge with a vibrant personality to make the legal process enjoyable and accessible. Her practice includes Estate Planning, Long-Term Care Planning, Wills, Trusts, Power of Attorney, Advance Directives, Probates, and Medicaid Appeals, Liz brings a fresh and energetic perspective to the field, ensuring that clients not only receive legal representation but also have a positive and memorable experience along the way.” 

Liz Ann Johnson Elder Law, PLLC
P.O. Box 64147
University Place, WA 98466

Warning: Not Legal Advice

The content presented here is not intended to be legal advice. It is provided for informational purposes only and should not be relied upon as a substitute for professional legal counsel. Laws and regulations vary by jurisdiction, and the application of laws can vary based on individual circumstances. The accuracy, completeness, and timeliness of the information cannot be guaranteed. Consultation with a qualified attorney is recommended for addressing your specific legal concerns. By accessing or using this content, you acknowledge that it does not create an attorney-client relationship and that the authors and publishers are not liable for any consequences arising from your reliance on the information provided.

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