Should you put an adult child’s name on your bank account?

On Behalf of | Dec 27, 2023 | Estate Planning |

A lot of people who find themselves without a spouse in their senior years decide that they should add an adult child to their bank accounts. However, that can turn out to be a bad move.

When you add an adult child to an account, they become the co-owner of whatever funds are in there – with the same right as you to take that money and use it however they please.

If you trust your adult child, why is that a problem?

You may know that your child would never take any money from your account without asking permission, but that doesn’t negate the other potential risks you face. Once your child becomes the co-owner of those funds, they can be:

  • Counted as marital funds and subject to division if your child gets divorced
  • Garnished to meet your child’s unpaid support obligations
  • Used to repay your child’s creditors if your child goes bankrupt

In other words, you cannot count on a court to treat the money as if it really belongs to you once your adult child’s name is on the account.

Are there any other options?

If your goal is to make certain that your child has access to funds to take care of your needs and pay your bills if you become incapacitated, you can likely accomplish this with a financial power of attorney designation. If your goal is simply to make sure the money transfers to your adult child with minimum hassle once you pass away, then a survivorship or beneficiary designation on the account may be enough.

Lots of well-intended mistakes happen when people try to develop an estate plan without the appropriate legal guidance. If you’re concerned about the future, it may be time to seek more information.


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