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WHAT IS A CONVENIENCE ACCOUNT? ESTATE TOOL

22
Jul

By Jason Stern

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As a NY estate lawyer practicing estate law in Forest Hills, Queens our offices have seen and dealt with it all. From our NY estate lawyers’ 40 years of combined experience litigating and handling NY probate matters we have seen the good, the bad and even the ugly. The bad usually entails an opportunistic criminal taking an elderly person susceptible to fraud to an attorney for an attorney drafted will. The will almost always names this opportunist as the executor and primary beneficiary of the victim’s NY estate. The ugly is when the opportunist goes a step forward making themselves joint beneficiary on the victim’s banking accounts.

In these cases, a NY probate lawyer is called upon to both object to the fraudulent will and recover any and all monies improperly removed from the victim’s estate. In most instances this can be avoided with some vigilance and the right NY probate lawyer.

How does this happen?

Near the end of one’s life when an elderly person is isolated from the world and too infirmed to even do their own banking they may be coerced into appointing another person as their power of attorney, agent. Unfortunately this power is usually accompanied by catastrophic results. A power of attorney is the most destructive instrument you can create, often bestowing unlimited power over your finances to another. What is even worse is once created it is very hard to undo.

Rather than granting another person power of attorney over your finances an experienced NY estate lawyer should recommend a convenience account. Under NY estate laws and NY banking laws funds are allowed to be placed in segregated accounts for purposes of paying bills out ofconvenience. Hence, convenience accounts.

convenience account is an alternative to either granting someone power of attorney over all of your assets or making someone a joint beneficiary on your bank accounts. The issue with joint bank accounts is they are intended as a gift with rights of survivorship to the individual whom they are bestowed upon. As such whatever funds you place in those accounts are no longer part of your NY estate assets but remain outside your probatable estate after you pass. Therefore whoever is on the account is granted ” rights of survivorship” and would get to keep whatever monies are held in those accounts.

Unlike the joint account, the convenience account does not grant anyone rights of survivorship over your assets. As such, any and all assets within your convenience account come back into your NY estate and are treated as probatable assets passing to your heirs after you are gone. Convenience accounts thereby afford a principle the right to bestow upon an agent the power to pay bills and expenses out of that account for their benefit without gifting the money away to the agent.

Unfortunately many do not know they can elect to create a convenience account and often unwittingly set up joint bank accounts with rights of survivorship out of ignorance and desperation instead. In such instances it is incumbent on a NY estate lawyer to establish a presumption that the estate accounts were created and used as convenience accounts and should be included in the decedent’s estate as opposed to joint accounts with rights of survivorship.

Retrieving NY estate assets wrongfully misappropriated by greedy opportunists is intricate and complicated work. Only a select few NY probate lawyers have the experience and capabilities to succeed in this arena. As an experienced NY probate lawyer my advice is to often forego the creation of blanket powers of attorney in favor of convenience accounts. While the moneys in the account may still be misappropriated by a disingenuous agent, there will at least be a cap on the amount of estate assets lost. Additionally, any and all monies remaining in the convenience account at the time of death would automatically revert back into the decedent’s NY estate.

If you or a loved one are thinking about planning their estate, feel free to speak with a NY estate lawyer at the Law Offices of Jason W. Stern & Associates for a free consultation at (718) 261-2444. Our NY probate lawyers have more than 40 years of combined legal experience handling estates for New Yorkers like you in the counties of New York, Queens, Kings, Bronx, Orange, Dutchess, Westchester, Rockland, Nassau and even New Jersey.