Case Study: If It’s in His Name, It’s His
If you are contemplating putting anyone else’s name (besides your spouse) on any type of financial account or deed, check with your estate planning attorney first. Why? Consider the following story that resulted in a lawsuit that took four years to resolve and caused much family turmoil:
What’s in a Name?
Years ago, John Wasniewski went to his brokerage office with $30,000 and opened an account. He set up the account in his son James’ name, listing James as the sole owner of the account. John even included his son’s Social Security number.
Even though John created the large account in his son’s name, he never told his son about it. In fact, the first James ever knew about it was 13 years later when his dad sent him an IRS Form 1099 from the account. Until that time, all the brokerage account statements had been mailed to John’s address.
A year before James found out about the account, someone went to the brokerage office and closed the account. The funds were withdrawn—all $30,000 plus $22,000 in interest—by someone other than James. The money was then placed in a new joint account in the name of John and another one of John’s sons.
James sued the brokerage company for allowing someone who didn’t own the account to close it and take out the money. The court found in favor of James for $52,000.
Wasniewski v. Quick and Reilly, Inc., 940 A.2d 811 (Conn. App. Ct. 2008)
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The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.