Private Client
Maia and Koa are a couple living in the Auckland, with two grown up sons (Etera and Wiremu). Koa passes away. Of course, as many couples do, Maia and Koa had a joint account that held the bulk of their savings. On Koa’s death, all the funds in the joint account passed by survivorship to Maia.
Assets that pass by survivorship (which also include properties held as joint tenants) do not form part of a deceased’s estate. This means that the division of those assets will not be determined by the survivor’s will and family members will not have a claim to those assets under the deceased’s estate pursuant to the Family Protection Act 1955.
Unfortunately, Maia isn’t free to enjoy these savings, as ill health intervenes. Maia decides to appoint her son Wiremu as her Enduring Power of Attorney in relation to Property (EPOA) and asks her bank that it be activated, so that Wiremu can assist her with her banking as her property attorney. Wiremu takes Maia to the local branch of her bank with a certified copy of the EPOA to get himself named as a signatory on the account. The bank takes the copy but doesn’t note that Wiremu is merely an attorney and signatory under the EPOA – they just name him as a joint account holder, which is surprisingly common.
As a joint account holder, the bank is now unlikely to question the transactions that Wiremu makes, thereby creating a situation with less “checks and balances” in place to protect Maia and her savings. When Maia dies a year later, the whole amount in the account passes by survivorship to Wiremu and is not part of her estate.
While this example is fictional, the situation described is all too real. When going to the bank and lodging an EPOA, checking whether a name has been registered as a joint account holder or signatory is vital. It is also important to consider your asset ownership structure and the effect that may have on your estate planning. Brookfields can help you navigate these legal issues and ensure that appropriate documents and/or procedures are put in place so that your wishes are carried out.
