Generally, putting a non-spouse’s name on an account won’t trigger a gift if assets aren’t withdrawn by the new co-owner.
Suppose, for example, Jane Kennedy puts her nephew Lou’s name on her checking account so that Lou can pay her bills, if she becomes incapacitated. As long as Lou leaves the account alone, no gift is incurred.
However, if Lou takes $25,000 from Jane’s checking account, a gift tax return may have to be filed and gift tax might be owed. To prevent such problems, Lou should keep careful track of his use of Jane’s assets. If Lou writes a $25,000 check to a nursing home, for example, to provide care for Jane, no gift will have occurred.
On the other hand, if Lou writes that $25,000 check to buy a car for himself, that would be a gift from Jane unless Lou can show that the car was used solely for Jane’s care.
