This is a common question and there are a lot of misconceptions out there
regarding jointly held property.
First off, a jointly-held account with rights of survivorship (hereinafter
referred to as "jointly-held account") will not be included
in the probate estate at the first death (e.g. If Mom and Dad have a joint
account, and Mom passes, the property passes to Dad outside of probate).
BUT, as a side-note, this does not mean that a portion of the account
will not be included in the taxable estate when completing a Connecticut
estate tax return, and the taxable estate is the basis for which probate
fees are calculated...but the full explanation of how probate fees are
calculated is for another post at a later date.
Often times during the probate process, the deceased parent's creditors
can submit claims against the estate to the Executor. The Executor then
determines whether or not the claims are valid or invalid, and pays valid
claims in accordance with the estate administration process.
Since jointly-held accounts are not included in the probate estate, many
individuals assume that their parent's creditors cannot access the
assets after their parent's death if they are added to the account
prior to the death of their parents, but this is not necessarily the case.
Generally, Connecticut law currently provides that subject to certain limitations
on liability, the surviving account holder(s) can be liable for valid
claims of: funeral expenses, the expenses of settling the estate, and
debts owed for the last sickness of the deceased account owner if there
are insufficient funds in the estate to pay these claims.
This can result in major issues for the surviving account owners if there
are insufficient funds to pay creditors from the estate.
If you have questions about how these rules work in your particular situation,
or if you would like our help with probate in Connecticut, or Connecticut
estate planning, please feel free to contact us at (203) 651-5521 or visit
our website for more general information.