What is the better solution to dispersing joint checking account funds upon death of my mother?

A gift of money from one person to another is not counted as taxable income to the recipient. Assuming the amounts are not subject to any gift tax (only applies to very large amounts of money), it is simple just to divvy up the money after your mother's death. There is no reason to increase the probate estate by putting the money back into your mother's sole name.

A better arrangement is to have the account in your mother's sole name, with all three children as Pay On Death (POD) beneficiaries, and then give just you a power of attorney to access the account via check, etc.

I would empty the account & open a new one in your name only. Once all expenses are paid, the home is sold, etc. etc. then I would share whatever is left with my siblings. Don't be too quick to cut them a check - you never know what fees and expenses will be lurking in the meantime.

To the original poster: Just to throw something else out there that hasn't been mentioned - even if she has a prepaid funeral plan, there will be extra costs associated with her funeral and burial. Be sure you save enough money back to cover those, such as flowers, payments to officiants, limo rental, programs, certified copies of death certificate, opening and closing of the grave, newspaper death notices, thank you cards, postage, headstone and engraving and others I haven't even mentioned. Storage or transfer of her personal items from the house while you prepare it for sale. Closing costs after the sale. Keep the checking account open until the very last - you'll be surprised what unexpected fees there will be. There may even be last minute doctor or hospital bills. Good for you for planning ahead, not enough people do that and are overwhelmed.

If you gift before death, she will not get Medicaid because gifts trigger a penalty. Bear in mind there are costs with selling the house, the realtor often suggests some improvements to increase marketability. You will also have to pay the upkeep,taxes,utilities until the property sells and it can be a long time. For example in my city the house has to have a sump pump and hardwired smoke detectors prior to sale. $$$$$

Oh another couple of ideas….. after the house is transferred, you can sell it with the proceeds from the sale to go into the bank account you kept open. As psteg. said there will be costs to sell a property. Then once the property sells, everybody goes to a nice long lunch which toast mom & you pay for from the bank account, and then you divide the bank balance out equally and everybody is kum-ba-ya and all is documented. It is wonderful that mom set this up so you could do.

Debra - when you go to sell a house, you need to have a clear title to be able to do so. Like if you have a mortgage, then the mortgage is paid off (cancelled) and this releases the title so the new person buying the house can get title. When they die and still own the home, the title is still in their name. So since they are dead, they can't sign anything, it needs to go through probate for this to happen. It's in probate court, where the judge will give an order or decree as to ownership of the property.

So say the Mary's will gives her home to her two kids which Mary owns outright, the probate judge will award the property so that the title is release to them 50-50. Then the kids can sell the house but they both have to sign off to do so. If there is still a mortgage, then the mortgage will have to be paid off before the title to the property is released. Probate has all sorts of requirements and costs. If there is a good bit of an estate, it will take months or years to close out probate properly. Really you do need an attorney to do this for you as it can get complicated.

But some states allow for an alternative to doing probate. Some states allows for a "small estates affidavit" and others allow for a "muniment of title" and some have other actions or multiple other ways to divest of assets without doing full probate.
Muniment of Title - if your state allows for this action - is an easy and relatively simpler way to legally transfer the ownership of the owned-outright home to whomever is named in their will to get the property. For some elderly, their only asset is their home and if there is no outstanding debt, then their executrix can do a MUNIMENT rather than going full probate. Muniment costs maybe $ 700.00 to 1K which is loads cheaper than full probate. You have to still do filings @ the courthouse but usually no hearings (and courtroom time & cost) and at the end you get whatever is legally needed to own the property so you can sell it or keep it.

I would suggest that you continue to keep the account(s) open, you are on the account and a signature and this will come in VERY handy over time.

About the house, if it is the only asset (which it sounds like) look into IF your state allows for "MUNIMENT OF TITLE". A muniment action is kinda like probate "lite" or low-cal version of full probate. If they have a valid will, and their only real asset for probate is the house (or a house & a car) and you are indicated as the executrix in the valid will and the will specifically names who gets the property and they are all still alive, you can file for a muniment to be able to legally have the property released and transfer the title of the property to whomever is indicated as per the will. Maybe 3 visits to the courthouse to file documents (usually no hearings) and if you reside in the county where the property is, you likely can do this yourself if you are comfortable in dealing with courthouse, and understand how property needs to be filed, etc. Muniment has a time frame in which to do, 6 months seems to be the norm and you have to have it all done within this short time frame too otherwise you have to go back and do full probate. Now some states do require an attorney to do anything probate, so find out if that is the case for you.

i'm assuming mom was NOT on Medicaid. If she was, that is a whole other set of issues to get past to be able to transfer the property. Medicaid, yes or no?

Medicaid is not a factor at this time. Not sure what a Muniment of Title is. The house will be sold and remaining preceeds will go to the heirs. Will be using a lawyer to assist with helping me probate the will.

If there is no Trust, this estate will go to Probate. Better to get it into an irrevocable Trust now before she dies, then when she does, equal shares will be dispersed from the proceeds of the sale of the house and any remaining assets in the checking account. Don't do more work than necessary. Just make sure you have documents to back up all expenses and show where the money has gone and will be going. If you put this inheritance in a Trust, then there will be no Probate, court fees. Do it NOW!

Debralee, I have had the same question. I am on my mother's checking and savings accounts, so they should not have to go to probate. I plan to divide the money according to my parents' wishes. I have wondered if I just write checks to the heirs when my mother dies, would the money be seen as income. I don't know if there will be any money left, but I wouldn't want anyone to have to pay taxes on it because I didn't do things right. But I wouldn't want to put it in an estate account where money would be lost to probate.