Justin, My sister says I should add my son’s name to my bank account to make things easier if something happens to me. I’m not sure if that’s the best idea. What do you think? – Mary
Mary, Thank you for your question—you’re wise to think this through. While adding your child’s name to your bank account might seem like a simple solution, it can create more problems than it solves.
Here’s why:
- Ownership and Liability: When you add your son’s name to your bank account, he becomes a joint owner, not just a backup. This means your money legally belongs to both of you. If your son were to face financial difficulties, such as bankruptcy or a lawsuit, creditors could claim the funds in your account, even if the money is entirely yours.
- Estate Planning Conflicts: Adding your son’s name can unintentionally disrupt your estate plan. If you want your assets divided equally among your children, a joint account bypasses your will or trust. The entire balance would go to your son upon your death, leaving your other children without a share of those funds.
- Better Alternatives: The good news is there are safer ways to ensure your son can manage your finances if needed. A financial power of attorney allows your son to access and manage your accounts without giving him joint ownership. Adding a POD designation to your account ensures the funds go directly to your chosen beneficiary upon your death, bypassing probate, without giving them control during your lifetime.
Mary, adding your son’s name to your account may seem convenient, but it’s risky and often unnecessary. A little planning with the right tools can accomplish your goals while keeping your finances secure.
If you’d like to explore these options further, the attorneys at my firm would love to help. Visit our website, ElrodFirm.com, or call to schedule a no-charge strategy session