Convenience Or Problems: Adding Adult Children to Your Bank Account


Do you plan to add your adult child (or children) to your bank accounts as you age? This can be convenient but may cause issues and create complications within families during your lifetime and after your pass.

Why Adding Your Adult Child or Children to Your Accounts Can Be Helpful

Susie a 78-year-old widow, has one son, Kevin. When Susie passes away, she wants her assets, including her bank accounts to go to Kevin. She added Kevin, who is trustworthy, to her bank accounts years ago after her husband passed away. This way “someone can get to her money if she ever needs help.” Susie is still independent, but her late husband handled all their finances, so Kevin is now helping manage her accounts.

By adding Kevin to her accounts as a joint owner, Susie has given Kevin full authority to act on her accounts. This means Kevin can write checks, make transfers, and even withdraw the full balance of the accounts without his mother’s consent. This works well for Susie and Kevin. When Susie passes, Kevin will be able to withdraw the funds from the accounts, without having to go through the probate process.

But…what if you have multiple children?

If you have multiple children, adding a child to your bank account, and determining which child to include, can be problematic. This may cause animosity among your children and create possible power struggles. More importantly, when you pass, the child named as the joint owner of the account is entitled to the full amount in the accounts. This means, if your Will and estate plan leave everything to your children equally, your estate plan may not be carried out to the full extent. The child who is the joint owner would be on the “honor system” to distribute the funds to the other children and would have no legal obligation to do so.

What’s mine is yours!

By adding a child to your account as a joint owner, you may be exposing your assets to claims by their creditors.

In Susie’s case, Kevin was added as a joint owner on all Susie’s accounts. Now, Kevin is going through a nasty divorce from his wife, Karen. While Kevin was added to Susie’s accounts for convenience, Karen may claim it is Kevin’s money and gain access to some portion of those funds. This is certainly not what Susie intended!

It’s important to understand the pros and cons of including children on your accounts and can be a crucial part of creating your estate plan and an effective asset protection plan.

For guidance on estate planning and asset protection planning for long-term care, call Hurley Elder Care Law today at (404) 843-0121.

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