I have two bank accounts. One of my sons is listed as joint owner on both accounts. The amounts are $100k in a CD account and another $100k in a checking account. Is it necessary to set up a trust to avoid inheritance
taxes if I were to die ? I would think not, as I understand that he would simply take over ownership of the accounts, in my death, and not owe any type of tax (even if my son did not contribute into the original accounts). This is in the state of California.
2 Answers from Attorneys
Depends on how you want the money distributed on your death. Your set up will avoid Probate, but leaves everything to one son and if your goal was to have the money divided equally then you are simply going on faith that the one son will do the right thing. You did not mention any real estate so presumably these two bank accounts are pretty much everything you own. Again, yes this will avoid Probate, but it might create uncertainty regarding division of Estate upon your death. A Trust would avoid that uncertainty,
Agree with above. Your estate will certainly not be subject to inheritance taxes! But your have a good plan only if you want to disinherit your other children.