Joint Bank Accounts Offer No Protection From Medicaid

Many times when I meet with clients to discuss Medicaid, their children come along with them. One of the most frequent questions I get asked by children is, “Well, mom put me on her checking account, so half of that is protected because it’s a joint account, right?”

That’s actually a common misconception. The general rule with Medicaid is that, regardless of how many people’s names are on an account, if one of them is applying for Medicaid, then Medicaid presumes that 100% of the money in the account belongs to that person. Simply adding somebody’s name to a bank account doesn’t protect half of the money. In fact, it doesn’t protect any of the money.

For example, if you and I have a joint bank account, either one of us can go into it and take the money out any time we want. If it’s your account and you add my name to it as your son, I can go in and take all the money out tomorrow without your permission, even though it’s your money.

The rule gets a little trickier for stocks or a brokerage account. In those cases, we could make the argument that it is 50/50 if two signatures are required for transactions on the account. This is true even if one of the account holders has contributed nothing to the account.

It is important to understand that joint bank accounts, in and of themselves, don’t necessarily protect half of the money if one of the joint owners needs to apply for Medicaid benefits—but there are exceptions to that, and it’s important to speak to an attorney who is experienced in this area.

If you have questions regarding Medicaid or need guidance with Medicaid planning, please contact us.