Is It a Good Idea to Add My Son or Daughter to My Bank Account?
As a Peachtree City Estate Planning Attorney I often meet with clients who want their adult children to be able to access their bank accounts to help them out with writing checks or paying bills for them. However, this good intention can create a very serious risk of liability if carried out incorrectly.
Many times, a parent will go to the bank and ask the teller to add the child onto the account. When this happens, the adult child is now a co-owner of this account. This action may create problems for the parent. For example, if the child gets into an automobile accidents, has creditors, later files for divorce, has a failed business or files for bankruptcy, then the jointly owned asset may be vulnerable to the claims against the child, putting the parents money at risk. This could force the parent to lose some or all of that account to pay the child’s debt.
Instead of adding the child as a co-owner on bank accounts, your child could use a properly drafted Durable Power of Attorney (DPOA) to help you deal with your finances should the circumstance arise. A Durable Power of Attorney is a legal document in which you designate who you want to make legal and financial decisions for you if you cannot make them for yourself.
I recommend an extremely comprehensive DPOA that allows your agent to handle virtually all legal and financial matters for you. I also usually recommend a DPOA that goes into effect the moment it is signed (rather than one that springs into effect upon the principal’s incapacity–called a springing power). This means your agent can use it even if you are not disabled. This is often necessary for the DPOA to be accepted at many financial institutions. Therefore, it is very important that you pick only people you trust to be your agent on your Durable Power of Attorney. Every Durable Power of Attorney should have a primary agent and an alternate agent who would act only if the primary agent is unable to act for you.
Designating the adult child as a Power of Attorney allows the child to access the account, write checks, pay bills and do everything the parent needs without connecting them personally to the account or exposing assets to the child’s creditors, predators, or divorcing spouses.
At Goldberg & Associates, we specialize in handling elder law and elder law cases. All of our resources are at your fingertips when you work with Goldberg & Associates. We will do everything in our power to ensure the maximum amount that can be saved, will be saved for your retirement. No stone goes unturned at Goldberg & Associates; we are prepared to make sure you do everything you need to in order to max out those savings options, and make way for the time when you will get to retire.
