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Should I Add my Child as a Joint Owner on my Bank Account?

The short answer is that you probably should not add your child as a joint owner on your bank account. I am frequently asked if it is advisable to add an adult child as a joint owner on a bank account, sometimes because a family member or financial institution has suggested this as a good option for, in my opinion, a “short cut” to getting your affairs in order. In summary, you definitely should not add an adult child as a joint owner on a bank account without first getting legal advice about the risks and benefits of doing so, as well as the many other (and usually better) options available to accomplish your wishes in your situation.

People usually contemplate this action for one of two reasons. The first reason is to make sure that someone else can manage their finances for them if they become incapacitated at some point in the future. Although planning for incapacity is a vitally important goal, adding a child as a joint owner to a bank account is a risky and incomplete strategy. It is risky because the funds in the joint account are vulnerable to being withdrawn by the child or paid to that child’s creditors, regardless of who contributed the funds to that account because, legally, you both own 100% of the funds in that joint account. It is incomplete because it does not provide anyone with the legal access to receive information about or manage your other assets. For that reason, I recommend that you talk with an experienced estate planning or elder law attorney about better alternatives to accomplish your goals such as Powers of Attorney.

The second reason is to avoid the probate process. However, when you add a child as a joint owner on a bank account, you run the risk of unintentionally disinheriting your other children or loved ones because the presumption under Minnesota law is that the surviving joint account holder inherits all of the amounts remaining in that joint account. Which means that the child does not have to use those funds to pay your bills or share those funds with any other person. And the child may also face adverse tax consequences. To avoid these and other associated risks, I recommend that you talk with an experienced estate planning attorney about better strategies to avoid probate.

Contact me, Heidi Van De Berg, or any of the other estate planners at Gries Lenhardt Allen P.L.L.P., Jill Adkins, Jill Presseller, or Greg Van Heest, to discuss your situation and goals for creating or updating key estate-planning documents.