My mom wanted to avoid probate at all costs and had all 4 of us as beneficiaries on everything including a TOD deed on her house. When I pointed out that getting all 4 of us to chip in to pay her funeral costs and the bills at her house, she open the account I am on and put enough in there to cover those things. Yes, I could be dishonest and keep that money for myself, but I would never, ever do something like that and she knows it.LdiJ,
In our family the person placed on the accounts (one valued at over $200K) used the parents' funds to do home improvements and kept the residual rather than distributing it according to the original distribution pre-change. The person placed on the account gifted to charities without regard to the Medicaid look back consequences, refused to prepay funeral and burial expenses, paid household expenses when the elderly person did not live in the household, etc.
That person already had POA and signature authority on the account. This action also gave the second person's POA access to the account via the POA. This was done contrary to
On the other side of the family, a living trust solved the after death bill problem. BTW, beneficiaries had the resources to advance the estate the funds to pay the bills while the estate was being settled. The estate also had incoming funds that would/should have gone to an estate account that were sufficient to pay the bills coming in after death. There were also insurance policies that should have been used for immidiate after death expenses. The original plan was well conceived by an experienced, financially astute person who happened to predecease the elderly person in question. That person had left very detailed instructions as to the use of the accounts which was not followed by the person holding the checkbook.
While it may be a common practice, it does not protect the original account owner or their desired beneficiaries if the person placed on the account is dishonest - or just plain irresponsible and using the elderly person's funds to live beyond their means.