All Accounts in Husband’s Name Only
Currently my husband has all accounts in his name. He will not let me have any access and I have to ask to have any money. Practically, the bank has encouraged him to make the accounts joint. He won't. If he dies the will states that I receive all. Would I have pay inheritance tax? Is there anything that I can do to help him change this?
Great question. We should expand this into a planning article for this website so other people in a similar situation can be assured of finding it.
Let's take a look at some of the consequences and implications of your husband keeping assets in his name only. Remember, the laws vary considerably from state to state so these are only generalizations. Also, the documentation each bank or other institution uses can affect the consequences of each account. Here's some thoughts to discuss with Hubby:
- If someone scams hubby's identification (you here a lot about identity theft occurring), you'll have no other assets. If instead you and your husband split assets 50/50 and your accounts are under your Social Security Number, and his half of the accounts and assets will be under his name and his Social Security Number. If his identification gets scammed, then at least you have your assets and accounts unencumbered while trying to resolve his problems (and vice versa).
- If the IRS puts a lien on your husband's accounts, even if it is incorrect and you'll get it removed, having assets in your name and Social Security Number assures you of other
assets that are unencumbered by the IRS lien while trying to resolve the issue.
- My mom always told me not to put all my eggs in one basket. Some of the points in this answer are just a fancy version of that valuable "mom knowledge".
- If your estate is taxable, keeping all assets in one spouse's name assures that you'll maximize the taxes paid on the death of the last of you. Common estate planning techniques include dividing assets between spouses so that the assets of the first to die spouse are used to fund a trust for the surviving spouse so that the surviving spouse has use of the assets but those assets won't be taxed in the surviving spouse's estate on his or her later death. So, if you die first with no assets, you'll waste the tax benefits.
- If your husband dies before you (and hey, you can let him know its not because of what you'll put in your cooking, its what the statistics show), and you inherit everything, he is ultimately trusting you to intelligently use all of the assets anyhow, and to determine final distributions to children or other heirs. This proves a vital element of trust, so it wouldn't make much sense for him not to trust you now to own some of the assets. If he is worried (which it sounds like he isn't) that you'll give away all the assets he leaves you on your death to someone other than the children, you can both sign a will contract. This is a document (agreement) in which you both commit to carrying out agreed terms in each of your wills.
- If your husband ever becomes sick or disabled (and the likelihood of disability for any adult is surprisingly large) who will handle all the finances? Likely you. You and your husband should have durable powers of attorney authorizing each other, and further successors, to handle financial, tax and legal matters if either of you becomes disabled. If your husband will bequeath all of the assets to you, he would likely also name you agent under his power of attorney. If that is true, look at the lack of logic. Your husband seems to want to have control over the assets while he is alive and can monitor what you do, but if he is ever sick or disabled, you'd have control when he may not have the ability to monitor what you do.
- If your husband ever becomes incompetent and a court has to appoint a guardian, it is likely that the guardian might be you. Again, why should he not trust you know but trust you if he cannot monitor you.
- If your husband really cares about your welfare he should consider putting assets in your name now so that you learn and get comfortable making business, investment, tax and other decisions while he can guide you. Too many husbands (rarely wives) control assets to the point that when they become disabled or die their wives are put in charge and lack the experience to manage money, etc. The best bet would be to have him help teach you how to handle all aspects of the family finances and have a meaningful share in your name while you do so.
Now, all that being said, one of the key steps to managing money and spending is a budget. What you should or do spend, is something that we're not going to touch. And as for the bank advice for joint accounts, that may avoid probate (not usually a bid deal) it does not accomplish a number of the other points discussed above. Perhaps the most important thing is for you and your husband to work on this together and find solutions that work for the family.